- Dora the Explorer is singing about cocaine. Is that why my kids have so much energy? #
- RT @prosperousfool: Be the Friendly Financial “Stop” Sign http://bit.ly/67NZFH #
- RT @tferriss: Aldous Huxley’s ‘Brave New World’ in a one-page cartoon: http://su.pr/2PAuup #
- RT @BSimple: Shallow men believe in Luck, Strong men believe in cause and effect. Ralph Waldo Emerson #
- 5am finally pays off. 800 word post finished. Reading to the kids has been more consistent,too. Not req’ing bedtime, just reading daily. #
- Titty Mouse and Tatty Mouse: morbid story from my childhood. Still enthralling. #
- RT @MoneyCrashers: Money Crashers 2010 New Year Giveaway Bash – $7,400 in Cash and Amazing Prizes http://bt.io/DDPy #
- [Read more…] about Twitter Weekly Updates for 2010-01-16
Budgeting Sucks
Budgeting kind of sucks.
Filling out a budgeting spreadsheet, putting in all of your expenses, listing all of your income, tracking all of your spending. Yuck.
Balancing the fact that you may have $200 to spare, but if your gas bill is a bit lower one month then you have a some more money, but if your electric bill’s a little bit high, then you have a little bit less. It’s too much work.
Here’s the new plan:
I just opened up a new credit card. This credit card’s got a fairly high limit, not that I care since I’m never going to come close to the limit. It’s got an okay interest rate, not that I care–it’s going to be paid off every month. It also has a good travel rewards plan, so our family vacations can, to a large extent, be paid for.
Now, with this card, I’m taking all of my regular bills, and setting them up to be automatically paid by the credit card. It’ll get automatically charged every month. I won’t have to think about it. Once a month, I’ll just log on and pay off the card. All I have to do is make sure the balance stays under my monthly budgeted amount. I already know what I have to be paying each month, so, no problem.
This will make it easier to budget and track my actual spending. It’ll even make it easier to balance my checkbook, since right now, I’m logging into my bank account a couple of times a month to compare it to Quicken. Any budget helper is nice.
After this plan takes effect, my bank account will only have any ATM withdrawals that I need to make–which shouldn’t happen more than once or twice a month–and my checks to day care. There should be just six manual transactions every month plus all of my miscellaneous transfers to and from INGDirect, which should also be minimal– there should only be two of those each month.
This will simplify everything while at the same time giving me the maximum amount of travel rewards I’ve been able to find. Hopefully, it will work as well as I think it will.
Things to teach your kids about money
As parents, it is our job to teach our kids about a lot of things: driving, reading, manners, sex, ethics, and much, much more. How many of us spend the time and effort to teach our kids about money? A basic financial education would make money in early(and even late) adulthood easier to deal with. Unfortunately, money is considered taboo, even among the people we are closest to.
It’s time to shatter the taboo, at least at home. Our kids need a financial education at least as much as they need a sex education, and—properly done—both educations take place at home.
How do you know what to teach? One method is to look back at all of the things you’ve struggled with and make sure your kids know more than you did. If that won’t work, you can use this list.
- Balance a checkbook. This is the most basic of financial skills. The easiest way to teach this is to help him open a checking account and demand he keeps the register current and reconciled. Make him use a paper register. Quicken or an alternative may handle the work, but your kid will never learn the underlying principles if he doesn’t have to sit down with a pen and calculator to do the work. The cheat can come later, when he is capable of handling the task himself. It’s the same reason schools don’t let kids use calculators until the basics are thoroughly mastered.
- Calculate paid interest. Understanding how much something costs after accounting for interest should be enough to scare anyone away from credit cards. I believe that the reason it doesn’t is because most people don’t understand how to figure out what interest is costing them. In case you don’t know yourself, the math is simple: balance X interest rate(as a decimal) / 12. That will show you how much you are paying each month for the privilege of borrowing money.
- Use your money to make money, not to pay interest. The flip side of interest is earned interest. It’s always best to let your money work for you, building your wealth than to struggle to finance a bank’s payroll liabilities.
- Save 25%. My son is required to put a quarter of everything he earns in his bank account. He gets $20 for shoveling the neighbor’s driveway, so $5 goes in the bank. The money he gets for gifts is handled the same way. Everything he gets, whether it be from a gift, his allowance, or work he does—gets divided the same way. If I can establish that habit for him, and impress upon him the value of saving 25% enough that he continues into adulthood, he will never have money problems.
- Always contribute to retirement. At every opportunity, from every paycheck, make a contribution to retirement. At a minimum, a 401k contribution should be made at a level that takes full advantage of any company match. If there is no match, even $25 per paycheck will add up over time. Teach them to work towards the 401k contribution limits.
- Spend less than you earn. This is the shining, glorious foundational principle of successful finances. Not just individuals, but businesses and even governments should learn this lesson. If–at all times–you are spending less than you earn, you will have more options to handle the remaining bits. If you live on the wrong side of this equation, you will never be able to get ahead, no matter how hard you work.
Those are the lessons that I am working to instill in my children, a little at a time. Am I missing any?
What D&D Taught Me About Finance
I admit it: I’m a geek. I’m not a hobby geek who only geeks on the weekends. I’m a full-fledged, licensed and certified geek. I am a geek about so many wondrous things that it’s hard to list them all. My wife knows, my kids know. It’s not much of a secret. One of my many geek qualifications is my sordid history of gaming. Role-playing, tabletop only. If that’s gibberish, it’s okay. Nobody needs to understand my geekitude but me.
I started playing Dungeons and Dragons more than 15 years ago. There were no live chickens or human sacrifice. Just a small group of geeks, proto-geeks, pseudo-geeks, and the occasional nerd playing DnD in a poorly lit room for several hours. We laughed, we cried, we fought evil, saved the world, and raised the stock price of an assortment of caffeinated beverage companies.
As the man said, I told you that, so I could tell you this:
DnD taught me many things. It taught me THAC0 calculation, dice-identification, and the fact that no woman, anywhere, considers tabletop roleplaying to be an alpha-male trait. “I’m a level 73 kinder warrior-mage-thief” is not a pickup line anywhere in the world, even Gen-Con. Remember that. Also remember, the singular of dice is die. If your are talking about one, it’s a die. Get it wrong and I will throw a bag full of dice at you and make you dig out the purple, sparkles-like-a-vampire, 27-sided die from among the hundreds of other dice.
DnD also taught me some surprising things about the world of personal finance, which is not a part of a planar campaign.
All the best toys cost too much. At the current exchange rate of 10 silver pieces(sp) to 1 gold piece(gp), potions of extra healing will drive you into debtor’s prison. Just as a sword of extra-slaying +10 will cost you everything you earned raiding that castle for the last 6 Wednesday evenings, so will a big screen TV set you back a full month’s salary. Don’t risk your life or sell your life’s energy for something fleeting, just because it’s “the best” or the newest gadget, geegaw, or artifact.
Never sell your soul for a castle or a horse. When the Baatezu come to offer you a “no money down, 0% for a year, all-expenses-paid, surrender-your-first-born” deal for a castle or the prettiest horse in the park, take a cue from the former First Lady. Just say no. Spending money today that you have to pay for tomorrow is almost always a bad idea. Don’t spend your soul, spend your savings. Don’t buy something until you can afford it. A Lexus or an Arabian, a mansion or a rambler. Are any of them worth auctioning your future?
Your armor isn’t stronger just because it’s shiny. A suit of Full-Plate of Protection-From-the-Charms-of-Bar-Wenches +5 may look pretty, but it’s not going to help against the orcs, kobolds, or trolls unless, of course, they are wearing skirts and sitting on a bar-stool above a sawdust-covered floor. Does the shiny new iPod really provide a benefit, or is it just a shiny gadget to woo the ladies?
A good sword is necessary to keep your stuff. This is a not a call to self-defense, or mugger, err, orc-slaying–though why that’s ever viewed as a negative is beyond me. You need to be aggressive in defending your loot. Call your credit card companies and demand they turn over the booty, err, lower your rates. Tell your friends to step away from the Diamond Ray of Disappearance, err, expensive outings or you will chop off their heads, err…no wait, that one can stay. I think my friends may be scared of me.
[ad name=”inlineleft”]The promised reward for completing an adventure isn’t the only way to make money. Sure, the local duke(your boss), may be willing to pay you a chest of gems(your salary) for defending the town from the ravages of the Tarrasque(your job), but that isn’t the only way to make money. You could do your job, collect your pay, and go home at night, but why? Don’t forget to pick up the loot along the way. If you spot the shiny penny, grab it, whether it’s abandoned gold, a new idea for a niche-blog, or a chance to turn your leisure hobbies into money. There are thousands of ways to make money outside of your day job. Every one will help your bottom line.
It takes cunning to slay the dragon. When tackling your debt(dragon), wading in swinging your sword may be emotionally satisfying, in the short term, but long term, it’s just a painful method of reminding yourself that you are crunchy and taste good with ketchup. Make plans. Have a strategy. Come out a winner. Then, sit down for beer and dragon steak. Goal-less, plan-less attacks fail in the long-term.
Update: This post has been included in the Carnival of Personal Finance.
Make Extra Money, Part 5: Domains and Hosting
In this installment of the Make Extra Money series, I’m going to show you how to pick a domain and a host.
If you remember from the last installment, I’ve decided to promote The Master Wedding Planning Guide. Since then, I have bought the product and read enough to decide that’s it worth promoting. That is the secret to ethical internet product. Never promote a crap product. Now, when I bought the Guide, I used my own affiliate link, so the $37 product will have cost me about $13, once the commission check comes through. You can’t do that just to get a discount because Clickbank has measures in place to ensure that you are actually selling products.
Domain Name
The first thing we need is a domain name.
You can skip this if you want to host on blogger, but I wouldn’t do that, unless $10 is a major financial hardship. I dislike the idea of leaving everything in Google’s hands. Even if you use blogger for hosting(discussed later), pop for the domain name. That way, if you change your mind about hosting, you can move without losing everything.
Where should you go for your domain name? I use NameCheap and GoDaddy. I try to divide my domain names across each of the providers so all of my sites don’t look identical to Google. I may be paranoid, but it works for me.
Before you order, hit Google for a coupon code. Search for “namecheap coupon” or “godaddy coupon” and save some money. GoDaddy is offering $7.49 domains.
How do you pick a domain name?
I try to pick something that matches the product name, or the product’s site. In this case, the product’s site is http://www.masterweddingplanning.com and http://www.masterweddingplanning.net was available, so I grabbed it. I would have been happy with .com, .net, or .org. I won’t touch a .info domain. They are generally cheap, but they cost more to renew and people assume they are spam sites.
If the exact match domain isn’t available, I look for exact matches for the product. If that’s not available, I stick other words at the end that would be attractive to people looking to buy a product.
Acceptable domains would include:
- http://www.masterweddingplanning.org
- http://www.masterweddingplanningreview.com
- http://www.masterweddingplanningguide.net
- http://www.masterweddingplanningreviewed.org
Or nearly anything along those lines. Other good words to attach would be “revealed”, “exposed”, or something similar. Just put yourself in the shoes of a buyer. Would the domain name look like something that could help you decide whether or not to buy a product?
Hosting
Your host is where your website lives. Without a host, you can’t have a website.
When it comes to picking a host, you have some choices to make.
First, do you want to go free or paid? Free sounds great, and if money is tight, it’s not a bad choice, but it does limit your options.
If you’re going free, you’re going with Google’s Blogger. WordPress.com’s hosting eliminates your advertising options, as does almost every other free host. I do know of a couple of free WordPress hosts that will let you run ads and advertising campaigns, but the performance is horrible.
Another problem with using Google is that they can decide your site violates their Terms of Service and shut it down. It shouldn’t happen, but it’s not unheard of with affiliate marketing sites. If you go this route, plan to move to paid hosting when you start making money.
That leaves us with paid hosting.
There are a ton of hosts out there, but only three I have personal experience with.
I won’t use GoDaddy for hosting. I’ve never been happy with their technical support.
I have most of my domains on HostGator (c0upon code: HOSTINGBUDDY). I’m happy with them. Performance is good and the customer service is excellent. Their hosting packages start at $3.96 per month.
I also have a hosting account at HostTheName. I got that because, using coupon code “STARTUPWARRIOR”, hosting prices get down to $1 per month. At $36 for 3 years, I couldn’t turn it down. Initially performance was rocky, but they’ve upgraded and it’s good, now.
Once you’ve created your hosting account, you’ll need to go back to your domain name registrar and set the name servers. At NameCheap, after you log in, you’ll go to Domains > Manage Domains and click on the domain name. From there, click on “Domain Name Server Setup” on the left of the screen and enter the custom name server information listed on your hosting account.
When that’s done, go to your hosting account and add the domain. If you’re creating a new hosting account, this will be your main domain and the hosting company will ask you for the information during setup. If you’re adding this to an existing hosting account, log in, look for “Addon Domains” and follow the prompts.
At this point, you’ve chosen a product to promote and keywords/search terms to go with it. You’ve chosen and registered a domain name and you’ve set up a hosting account to hold your website. Next time, I’ll walk through setting up a WordPress site to make some money.
Any questions?
4 Ways to Change Your Finances for the Better
Finance is made out to be difficult, but it’s really not. All financial advice really boils down to 2 sentences: “Spend less than you earn. Save or invest the rest.” Everything else is an unnecessary complication, unless you need to be told that commemorative plates aren’t actually an investment. Unfortunately, we’re all people. (Except for you in the back. I see you, and you are not people.) People make mistakes. People sometimes need things spelled out, or at least explained in a way that makes it seem less intimidating to get started.
With that in mind, here are four steps that will get you out of debt and, over a long enough timeline, make you rich:
1. Lower your interest rates. If you’ve got debt, particularly credit card debt, you’re paying too much interest. It doesn’t matter what the interest rate is, it could be better. It’s time to pick up the phone and politely ask your credit card company to lower your interest rate. If they refuse, mention that their competitor is offering you 3% interest on a balance transfer with no transfer fee. Mention a competitor by name, but don’t worry about a specific offer. There are always offers being tossed about.
If they won’t lower your rate, find a company who will. 5% on a 10,000 balance is $500 per year. That’s 3 months of payments for free.
2. Lower your monthly payments. Do you have a cable bill? A phone bill? Any other bills? Put them in a stack and call them. Every. Single. One. Ask if there is any way you can lower your bill. Can you get put on a new customer promotion? My electric company offers a saver switch for my air conditioner that will lower my bill by 15% just for giving them the ability to toggle my AC on and off. When we had that installed, I never noticed it in use.
3. Save $1000. When you’ve got no money, every unexpected expense is an emergency. When you’ve got a little bit socked away, you can ride out the problems without much worry. $1000 may not be enough to ride out an extended bout of unemployment, but it does a pretty good job of taking the sting out of car repairs. Do whatever you have to do, but get some money in an emergency fund. Then, don’t touch it!
4. Categorize wants and needs. I want a vacation. My kid needs braces. I want a big screen TV. My gas bill needs to get paid. I want a new car. My family needs food. Are you sensing a theme? Pay attention to what you spend. Ask yourself if it’s something you need, or just something you really, really want. Just the act of categorizing it can make it easier to avoid buying whatever it is.
5. Use the savings from 1-4 to pay off whatever you owe. Don’t blow your new-found savings on spinner rims or soap made from rich-people tallow. Use it to finally get ahead of the game.
