- 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
I just turned 2!
Update: Over $500 in prizes!
Yesterday was my second anniversary here. For the last two years, I have shared my thoughts, feelings, and finances three times a week and you have been there to watch and share as I figure out my financial future.
I appreciate it.
To show my appreciation, I’m giving stuff away.
Here are the prizes:
1 $100 prize
1 $75 prize
6 $25 prizes, courtesy of ThirtySixMonths, Budgeting in the Fun Stuff, Maximizing Money, Personal Finance Whiz, and Broke Professionals.
1 iPod Shuffle courtesy of Prairie Eco-Thrifter.
1 $25 Amazon gift card courtesy of Beating Broke.
A copy of each of the iPhone and iPad versions of the Pay Off Debt app from The Debt Myth
1 $20 Amazon gift card, courtesy of Money Crush.
1 $25 Starbuck’s gift card, courtesy of Mom’s Plans.
I’m also giving away some books, some of which have been lightly read.
Financial Peace Revisited by Dave Ramsey
Never Pay Retail by Sid Kirchheimer
Delivering Happiness (advanced reader copy) by Tony Hsieh
I Will Teach You To Be Rich by Ramit Sethi
The Art of Non-Conformity by Chris Guillebeau
CreditCards.com Book of Cartoons
Women & Money by Suze Orman
To enter:
Follow the instuctions in the widget below. Following me on Facebook, Twitter, RSS, or email will all earn entries. Following any of the sponsors on Twitter of Facebook will earn you entries. Tweeting about the giveaway as often as you like or linking to this page on your site will earn you entries.
There are lots of ways to enter and 16 prizes to win.
The drawing will be held on December 23rd, just in time to give you some cash before Christmas.
Good luck!
3 Simple Ways Keeping Your Spending Organized
- Image via Wikipedia
On of the biggest problems we had with controlling our finances was knowing where the money went. Have you ever said “Honey, do you realize we spent $900 eating out this month?” I have. The amount we spent on some categories was mind-blowing. Maybe some people don’t see $900 at restaurants, $400 on clothes, or $300 on books and movies as a problem, but I do and it was ridiculous! We’ve dialed back hard on the unnecessary spending and the first step was to understand our spending habits. That was a painful self-examination.
Here’s what we did:
- Have a Budget. This is quite simply the most basic step in organizing your finances. If you don’t have a budget, you don’t have a plan for where your money will go. Without a plan, your money goes on about its business without consulting you. Your money does not like you. It will do its level best to get as far away from you as fast as possible. A good budget is like shackles for your cash. Never underestimate the value of a good pair of shackles.
- Use a Spending Journal. Before we went cash-only, I was a no-cash spender. Every purchase was with my debit card and every receipt went into my wallet. That’s a disorganized, but effective spending journal. When it was time to balance the checkbook, I could look through my receipts and no exactly where the money went. It was nice to have a chance to wave good-bye and send it a postcard as it ran away from home. Other people use a small notebook or even–for the truly cutting-edge–the register that comes in a box of checks. Whatever system you choose, make sure you use it. If you don’t know where your money has gone in the past, how can you plan for the future?
- Use a Ledger. Most people call this the checkbook register. I use Quicken. About once per month, I sit down with any receipts we’ve generated and the list of transactions on the bank website and I balance the checkbook. I note everything we’ve spent, flag everything that has cleared the bank, and make sure all of the numbers match. This gives me a chance to review everything we’ve had incoming and outgoing and address any abnormalities while there is still a chance to get the bank to address problems.
[ad name=”inlineright”]
How do you track your spending?
Update: This post has been included in the Carnival of Personal Finance.
The Virtues of Blow Money
When we initially developed our budget, we built it tight. Every penny was accounted for and had a place to go. I was so proud.
Unfortunately, there were some problems with habitual–even compulsive–shopping in our house. The change from “whatever we wanted” to “it’s not budgeted” was too much, too fast.
After a few months of arguments, we agreed to set up a “blow money” line item in the budget. That’s money that is absolutely unaccountable. When a purchase comes out of that fund, no questions are allowed. Whether it’s a new pair of shoes for her, or a new book for me, nobody gets to fight over it. Sometimes, it’s a nice dinner out, other times it’s another gadget for the entertainment center. It’s never a problem.
This provides two major benefits.
First, it balances the feeling of sacrifice. If my wife never gets to buy anything, while at the same time, she’s watching our friends and neighbors flaunt their rampant consumerism, it makes her feel like she is giving up the good life. We aren’t lacking for anything, but the trappings of middle-class “success” can be expensive. Having an opportunity to participate in that horrible rat-race lessens the feeling that we are missing out. Rationally, we know that the right thing is not to spend that money, but emotionally, it’s a necessity.
Second, it’s a safety valve. Our finances are under tight control, which can cause pressure. Finances are, after all, one of the leading causes of divorce. Having a way to release that pressure makes everyone happier. Habitual shoppers experience shopping the same way drug addicts experience their “high”. That includes withdrawal. The safety valve turns this from a “cold turkey” method of quitting to a weaning of the addiction.
Another minor benefit is that the blow money can serve as an opportunity fund to bridge the gap between the discretionary budget and a desired purchase. Last week, we ran across a curio cabinet that exactly matches our living room, but we didn’t have it budgeted. Out comes the blow money, which, combined a portion of the discretionary budget and some negotiating, made the new cabinet affordable, without busting the budget.
This isn’t a system that works for everybody, but it keeps us on track.
How do you handle the stresses of a household budget?
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.
5 Ways to Force Your Spouse to Get Frugal*
Communication is important in a marriage. If you can’t communicate, how are you going to get your way?** I’ve helpfully compiled the best possible ways to get your spouse on board with your budget plans.
- Don’t include her. When I absolutely, positively cannot afford to be working towards a different goal than my wife, I do my best to ignore her. I don’t tell her how much we’ve paid off, how much we have left, or what we can afford to spend on groceries. I think she enjoys not having to worry about the petty details like “Are we overdrawn?” or “Will we be eating Alpo next week?” I’ll do anything to make her life easier.
- Nag. Nothing convinces my wife to do things my way like unending scolding. If I just remind her, day and night, surely she’ll cooperate with my budgeting plans and ideas to save money, right? Every body loves the attention, and, since we got a text messaging plan, I can shoot her a message every five minutes while she’s at the store. In all seriousness, this is actually a problem and a source of friction at my house. Reminding her every time she goes to the store is not an effective strategy.
- Whine. If nagging fails, I always try to take the advice of my toddlers and whine until I get my way. “But Ho-uh-neee-eee! Why’d you buy tha-at?” It’s always been a big hit at my house. My wife appreciates the effort I put into getting the third, screechy syllable into simple words, just to try to convince her to give up or see things my way.
- Obsess. This goes hand-in-hand with both #2 and #3. If I never giver her the chance to forget about our goals, she can never stray from them. A memo in the morning, hourly text reminders, and a daily summary of our account balances and month-to-date budget compliance just keeps us working together. Everything we do can be tied back to our frugal choices and debt repayment, whether it’s a game of Sorry or a trip to a wrestling tournament.
- Yell. If all else fails, just turn up the volume. If there’s a problem, I nag at level 10. Whining loudly enough to wake the neighbors will convince her to comply with my wishes next time. This has the added benefit of allowing my kids to receive the wisdom of my experience, even if they are in the basement playing games with their friends.
*This obviously isn’t a gender-specific article, but, as a man, I write from a man’s perspective and my pronouns match my perspective.
**Sarcasm. Really. Following these rules should result in divorce, NOT happy agreement. If you are operating under this action plans, get therapy.
Update: This post has been included in the Carnival of Personal Finance.
