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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.
First Steps – Ramsey was Wrong
Baby Steps” width=”180″ height=”240″ />- Image by bonnie-brown via Flickr
Fixing a lifetime of financial mistakes can be an intimidating process. Scratch that. It’s always an intimidating process. Where do you start? You’ve got a pile of bills, a dozen messages from bill collectors and two bi-weekly paystubs. What next?
Traditionally, and according to Dave Ramsey, the first step to fixing your finances is to make a budget, but he and tradition are wrong. The first step is to get everybody involved in your finances on the same page. If your spouse isn’t on board with paying off the debt and spending responsibly, nothing else will work.
Once you have that out of the way, you can move on to the traditional first step, making a budget. I’ve gone over my process to build a personal financial plan in quite a bit of detail, so I’ll just hit the highlights this time.
First, make a list of all of your expenses. Include all of your utilities, debt payments, tax payments and absolutely everything else. You need to know the amount of the payment and the frequency. If a bill is due quarterly, divide it by three and you’ll know what you need to set aside each month. Round up in all cases so you can build an automatic cushion.
Next, make a list of your income sources. For most people, this is far easier than tracking their expenses. Figure out your monthly income. If you get paid weekly, that that amount times 52, then divide by 12 to get your monthly income.
Finally, subtract your expenses from your income. If your total is a positive number then you are golden. If you total is negative, you have been a bad monkey. You need to make some cuts, and they may be painful. If your outgoing money is more than your incoming money, it is not possible to get ahead.
Once you have your income and expenses recorded, and you have made the cuts necessary to have a positive balance at the end of the month, you have a successful budget. Congratulations!
Budgeting tips – sticking to your budget
If you are looking to get out of debt, or you are currently debt-free and want to stay that way, then it is important that you get a grip of your financial situation and live within your means.
A good way to do this is to create a budget as this gives you a clear indication of how much money is coming in, how much is going out and also highlights any areas where you may need to make cut backs should you be falling short each month.
Once you have sorted out the figures and made necessary amendments, for example paying bills by direct debit in order to make savings or cutting existing debts by carrying out a balance transfer to a lower rate credit card, it is time to start focussing on the lifestyle changes.
As you will find, it is one thing to create a budget and quite another to stick to it, but by adhering to the following steps and exercising a certain amount of will power, you should be able to ensure that you live within your means and resist the urge to reach for that credit card.
Keep focussed
Before you start to look at how you can stick to your budget you need to clarify why you need to stick to your budget!
A budget can initially seem like something that has been devised with the sole intention of stopping you having fun and buying or doing the things that you want. So it is important to remember that, though some cutbacks may be necessary in the short term, a budget is a long-term strategy that will allow you to take control of your finances and, all being well, live a happy life that is free from the worry of excessive debt.
Change your habits
Unfortunately, a successful budget can require a change in lifestyle and this can be one of the most difficult things to adhere to.
For example, if you have previously enjoyed eating out regularly then you may have to make cut backs in this area to ensure that you are living within your means. But, instead of seeing this as a negative, try to focus on the positives and remember the reasons why you are budgeting.
And a change in habits doesn’t necessarily mean that you have to cut back on your enjoyment of life and it may actually open your eyes to other pursuits you may not have previously considered.
For example, instead of eating out try preparing a meal at home and turn your dining room into a restaurant. This means that you can still have the fine dining experience but at a fraction of the price and without the worry of making a reservation!
Shop smarter
Lists figure heavily when creating a personal budget and list-making is a habit that you should get used to when trying to stick to your budget.
When budgeting it is vitally important to avoid impulse buying and a great way to do this is to always make a list of things you need before you go shopping.
This means that you will have a clear idea of what you need and you will be less inclined to make random purchases that may just turn out to be an unnecessary drain on your finances. It’s also worth mentioning at this point that you should always differentiate and prioritise the things you need over the things you simply want.
If you are unsure how to make the distinction then put off making the purchase for a couple of days and then reconsider if you actually need it. This cooling off period will often convince you that you can do without it and save you money.
In addition, savings can be made on your shopping by simply swapping big name brands for supermarket own varieties, using discount coupons and looking for any special offers.
Overall, it is important to be fully focussed and committed to your budget plan and to be aware that a change in finances may require a change in lifestyle. But a few short term changes may well add up to better finances in the long term.
Article written by Les Roberts, budget reporter at Moneysupermarket.com.
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!
Money Problems: Day 11 – Extended Warranties
Today, I am continuing the series, Money Problems: 30 Days to Perfect Finances. The series will consist of 30 things you can do in one setting to perfect your finances. It’s not a system to magically make your debt disappear. Instead, it is a path to understanding where you are, where you want to be, and–most importantly–how to bridge the gap.
I’m not running the series in 30 consecutive days. That’s not my schedule. Also, I think that talking about the same thing for 30 days straight will bore both of us. Instead, it will run roughly once a week. To make sure you don’t miss a post, please take a moment to subscribe, either by email or rss.
On this, Day 11, we’re going to talk about extended warranties.
You’ve been there. You walk into a big box electronics store to buy a $10 cable for your DVD player and the boy in blue at the register tries to pressure you into spending $4 on an extended warranty in case the cable dies due to too much adult video…or something.
The same nameless blue and yellow store is currently selling a laptop for $349 with a 2 year extended warranty for $89. The sales pitch usually goes something along the line of “These things have a tendency to break. You need a warranty to make it worth purchasing.” Thanks, jerk. You just sent me to a competitor since your sales pitch involves telling me you’re selling garbage.
Seriously, getting an extended warranty on electronics is almost always a bad deal. Yes, almost 30% of laptops fail within three years. Most of those fail in the 3rd year. What’s a 2 year warranty going to do for you then? New laptops generally come with a 1 year warranty from the factory. That leaves you volunteering for a 25% markup in exchange for protecting your device for a year that is not statistically likely to include a laptop failure.
A much better idea is to create a warranty/repair fund. When you buy something and have a warranty offered, turn it down and put that money in a special savings account. That money will get set aside to repair your stuff when it breaks. If you do that with everything you buy, you’ll soon have a fund that can pay for most repairs, without stressing your budget. I’ve got $25 going into my repair fund every month, so I’ll never have to worry about an extended warranty again.
It’s called a self-warranty.
But what about a car warranty you ask?
This is where I differ from most people. I’m a fan of extended warranties on cars, with 2 caveats.
1. Use it. If you car has started shaking, knocking, or almost anything else, bring it in. You have a warranty, so get your dang car fixed. When you’re getting close to the end of your warranty, make up an excuse and get that car into the dealer. “My car’s making an intermittent knocking sound. Can you fix it? While you’re at it, please do your 90,000 point inspection and fix whatever you find.” There’s no reason that you can’t get your car running like new when it kicks over the 70,000 mile mark.
2. Negotiate it. The charge you see is typically twice the dealer’s cost. Let them make some profit, since that’s what makes the world go round, but don’t let them take advantage of you. If they offer you a warranty for $2000, counter with $1200.
If you can get a decent price and are willing to make sure you use the auto warranty, get it.
How do you feel about extended warranties? Please leave a comment below and let me know.
