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Karate Guess So
“Walk on road, hm? Walk left side, safe. Walk right side, safe. Walk middle, sooner or later, [makes squish gesture] get squish just like grape. Here, karate, same thing. Either you karate do “yes”, or karate do “no”. You karate do “guess so”, [makes squish gesture] just like grape. Understand?” -Mr. Miyagi
It occurred to me that lately, I’ve changed my day-to-day cash flow plans a couple of times.
A year ago, I was running on a fairly strict cash-only plan.
A month ago, I was running on a strict budget, but doing it entirely out of my checking account.
Now, I’m loosening the budget reins, and moving all of my payments and day-to-day spending to a credit card, including a new balance that I can’t immediately pay off.
The thing is, changing plans too often scares me. Like the quote at the beginning of this post, I start worrying about being squished like a grape.
The simple fact is that any plan will work.
If you want to get out of debt, just pick a plan and run with it. If that means you follow Dave Ramsey and do the low-balance-first debt snowball, good for you. Do it. If you follow Suze Ormann and do a high-interest first repayment plan, great. Do it. If you follow Bach and pay based on a complicated DOLP formula to repay in the quickest manner, wonderful! Do it!
Just don’t switch plans every month. If you do that, you’ll lose momentum and motivation. Squish like grape! Just pick a plan and go. It really, truly does not matter which plan you are following as long as you are following through.
This applies to other parts of your life, too. For example, there are a thousand fad diets out there. Here’s a secret: they all work. Every single one of them, whether it’s Weight Watchers, slow carb, or the beer-only diet. The only thing that matters is that you stick to the diet. If you manage that, you will lose weight on any diet out there. Except for the jelly bean and lard diet. That one will make you extra soft.
Another secret: the productivity gurus are right. Every single one of them. David Allen, Stephen Covey, Steve Pavlina, and the rest. They all have the One True Secret to getting the most out of your day. Really. Pick a guru and go! But don’t try to Get Things Done in the morning and do 7 Habits at night. Changing systems, changing plans, changing your mind will make you sabotage yourself.
The real secret to accomplishing great things, whether it’s paying off $100,000 of debt, dropping 40 pounds in 3 months, or tripling your productivity is to do it. Just get started and, once you’ve started, don’t stop. If you keep going and stay consistent, you’ll accomplish more than anyone who hops from system to system every few weeks.
Credit Cards: How to Pick a Winner
We live in a decidedly credit-centric culture. Whip out cash to pay for $200 in groceries and watch the funny looks from the other customers and the disgust from the clerk. It’s almost like they are upset they have to know how to count to run a cash register.
If someone doesn’t have a credit card, everyone wonders what’s wrong, and assumes they have terrible credit. That’s a lousy assumption to make, but it happens. For most of the last two years, I shunned credit cards as much as possible, preferring cash for my daily spending. Spending two years changing my spending habits has made me comfortable enough to use my cards again, both for the convenience and the rewards.
Having a decent card brings some advantages.
Credit cards legally provide fraud protection to consumers. Under U.S. federal law, you are not responsible for more than $50 of fraudulent charges. many card issuers have extended this to $0 liability, meaning you don’t pay a cent if your card is stolen. Trying getting that protection with a wallet full of cash.
The fraud protection makes it easier to shop online, which more people are doing every day. At this point, there is no product you can buy in person that you can’t get online, often cheaper. How would you order something without a credit card? Even the prepaid cards you can buy and fill at a store will often fail during an online transaction because there is no actual person or account associated with the card. The “name as it appears on the card” is a protective feature for the credit card processors and they dislike accepting cards without it.
If you’re going to use a credit card, you need to make a good choice on which credit card to get. There are a few things to check before you apply for a card.
Annual fee. Generally, I am opposed to getting any card with an annual fee, but sometimes, it’s worth it. If, for example, a card provides travel discounts and roadside assistance with its $65 annual fee, you can cancel AAA and save $75 per year. A good rewards plan can balance out the fee, too. I’m using a travel rewards card that has a 2% rewards plan. That’s 2% on every dollar spent, plus discounts on some travel purchases. In a few months, I’ve accumulated $500 of travel rewards for the $65 fee that was waived for the first year. The math works. A card that charges an annual fee without providing services worth several times that fee isn’t worth getting.
Interest rate. This should be a non-issue. You should be paying off you card completely every month. In a perfect world. In the real world, sometimes things come up. In my case, I was surprised with a medical bill for my son that was 4 times larger than my emergency fund. It went on the card. So far, I’ve only had to pay one month’s interest, and I don’t see the balance surviving another month, but it’s nice that I’m not paying a 20% interest rate. Unfortunately, as a response the CARD Act, the days of fixed rate 9.9% cards seems to be over.
Grace period. This is the amount of time you have when the credit card company isn’t charging you interest. Most cards offer a 20-25 day grace period, but still bill monthly. That means that you’ll be paying interest, even if you pay your bill on time. To be safe, you’ll need to either find a card that has a 30 day grace period, or pay your balance off every 15-20 days. Some of the horrible cards don’t offer a grace period of any length. Avoid those.
Activation fees. Avoid these. Always. There’s no card that charges an activation fee that’s worth getting. An activation fee is an early warning sign that you’ll be paying a $200 annual fee and 30% interest in addition to the $150 activation fee.
Other fees. What else does the card charge for? International transactions? ATM fees? Know what you’ll be paying.
Service. Some cards provide some stellar services, include concierge service, roadside assistance, and free travel services. Some of that can more than balance out the fees they charge. My card adds a year to the warranty of any electronics I buy with it, which is great.
Credit cards aren’t always evil, if you use them responsibly. Just be sure you know what you’re paying and what you’re getting.
What’s in your wallet?
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.
5 Ways to Help Your Friends Stay Out of Debt
There’s a saying that you are the average of your 5 closest friends. Take a look at the people you hold dearest. Combined, they are you. If they are all in debt, chances are, so are you.
As a corollary, you are a part of your friends. If you become more financially responsible, it will rub off on the people who care about you.
Given these two rules, one way to improve yourself is to help those around you improve themselves. If your influence convinces your friends to move closer to your ideal, it will be easier, almost effortless to move closer to it, yourself.
It sound manipulative, but if you are manipulating your friends, you are doing it wrong. Don’t try to force or trick your friends, just be honest and sincere in your efforts to help. Nobody wants to be in debt. This is you being nice.
1. Suggest cheap activities.
While it is okay to splurge occasionally, don’t be afraid to suggest less expensive activities. If someone suggests going to a movie, mention the dollar theater. If they want to go out for dinner, offer to host a potluck. Trip to the casino? Game night at your house. There are almost always cheaper ways to have fun. As long as you are spending time with the people you love, you’ll have a good time. Do you really need to drop $100 to do that?
2. Don’t flaunt your toys.
If you buy an iPod and immediately run to show it off, you are going to trigger a case of “keeping up with the Joneses”. If your friends spend all of their time around people who are constantly buying expensive toys, buying expensive toys becomes normalized in their minds. Debt becomes the norm. Then extreme debt. Don’t reinforce the destructive debt cycle by showing off the expensive trophies of excessive, unnecessary consumerism.
3. Point out opportunities to save.
This is a fine line to walk. If mention how much money your friend is wasting on 13 shot venti soy hazelnut vanilla cinnamon white mochas with extra white mocha and caramel every single morning, you’re going to get annoying fast. In fact, you are already annoying me, so knock it off. On the other hand, if Caribou is having a sale on the 13 shot monstrosity, speak up. Nobody is going to complain about getting a $15 coffee for less than $10.
4. Give them a side hustle.
If you’ve got a friend who’s into landscaping and you’ve got a neighbor who needs a landscaper, make the connection! If you know a web designer and a business in need of a website, get them together. Do what you can to match the needs of the people around with each other. They will all appreciate it, and everyone will be better off. Be the guy who helps everyone connect with the people they need.
5. Be encouraging.
Put another way, don’t be a dick. Nobody likes being nagged. Nobody likes being told they are doing everything wrong. Be encouraging, not mean.
If you can do all of that, it’s natural that your friends will start acting the way you want yourself to act. The less they want to waste on a trip into debt, the less tempted you will be to do the same.
Decision Making Made Easy
Have you ever had to make a difficult decision? Not necessarily a decision that’s difficult because it’s life-changing, but a decision that’s difficult because there are two phenomenally wonderful, yet mutually exclusive options?
For example:
- Should you put caramel or strawberry sauce on your ice cream?
- Should you go to Disney Land or Disney World?
- Should you subscribe to Live Real, Now by email or RSS?
- Should you take the job with the stellar benefits package or the higher salary?
These are all real decisions that you may be called on to make.
For most decisions, there are some alternatives that are easy to discard.
MadDog 20/20 isn’t a good alternative to caramel sauce on your ice cream. The local BDSM museum probably isn’t a great choice for a family vacation. Sending me hate mail is obviously worse than subscribing.
Then you’ve got some choices that are both okay, but one is clearly better. You’ve got free airfare and hotel. Do you go to Topeka, or Paris? Neither is horribly, but I think the choice is obvious. You’re going out to dinner. McDonald’s or…nevermind, this fits the first category.
After you’ve discarded the obvious bad choices and the okay-but-not-great choices, how can you decide between what’s left?
This is the point that starts to cause stress. What if you make the wrong choice? What if you regret it forever? What if you’re still not happy? Gridlock.
The reason your stuck is because it’s not apparent which is the better choice. All of your experiences and knowledge are telling you–on some level–that the options are identical in terms of your life, happiness, and goals. It truly does not matter which one you choose. You will probably be equally happy, either way.
Given that it doesn’t matter, you have two choices for making the final decision:
- Pick the one you want. The rational decision is a tie, so make it an emotional one. Does one job match your dreams, but with a bit more risk? Has one vacation destination been a goal since you were little? Do it!
- Flip a coin. If the decision doesn’t matter, leave it to fate. That way, if it doesn’t work out, you can always blame the quarter.
The one thing you don’t want to do is wait. Failing to decide is still a decision and one that is guaranteed to keep you from being satisfied with your choice. Don’t wait until you have all of the possible information, because that kind of perfect world doesn’t exist. Get to about 85% of fully informed and run with it. You’ll usually be happier making a decision–even the wrong one–than sitting back wondering “What if I had done that?”
How do you make hard decisions?
