- RT @ScottATaylor: The Guys on "Pickers" should just follow the "Hoarders" teams around- perfect mashup #
- PI/PNK test: http://su.pr/2umNRQ #
- RT @punchdebt: When I get married this will be my marital slogan "Unity through Nudity" #
- http://su.pr/79idLn #
- RT @jeffrosecfp: Wow! RT @DanielLiterary:Stats show 80% of Americns want to write a book yet only 57% have read at least 1 bk in the last yr #
- @jeffrosecfp That's because everyone thinks their lives are unique and interesting. in reply to jeffrosecfp #
- @CarrieCheap Congrats! #CPA in reply to CarrieCheap #
- @prosperousfool I subscribe to my own feed in google reader. Auto backup for in between routine backups. Saved me when I got hacked. in reply to prosperousfool #
- @SuzeOrmanShow No more benefits? I bet the real unemployment rate goes down shortly thereafter. in reply to SuzeOrmanShow #
- Losing power really make me appreciate living in the future. #
Best of Money Carnival #68
Today, it is my privilege to host the 68th Best of Money Carnival. I’ve hosted a few carnivals over the last 10 months, but winnowing the choices from 60 to 10 is quite possibly the most difficult I’ve had to do. There were lots of excellent posts this week. Next time, I’ll have to make my job easier by soliciting bribes. I am always on the lookout for a new income stream.
Without further ado, here is the best of the best:
10. Mike Piper presents Do You Have an Investment Backup Plan? posted at Oblivious Investor. What would you do if your investment portfolio suddenly tanks?
9. Tim Chen presents Calm Down, the Poor Are Not Paying for the Rewards of the Rich posted at NerdWallet Blog – Credit Card Watch. I always get a little bit irritated when people accuse the “rich” of only being rich at the expense of the poor. After all, the richest 20% of the U.S. includes household incomes of just $90,000. If you think that’s a lot, remember that $25,000 still puts you in the richest 10% wordwide.
8. FMF presents How to Pick a Great Mutual Fund posted at Free Money Finance. What’s more important, cost or performance?
7. Madison DuPaix presents Marriage Tax Penalty Returns in 2011 posted at My Dollar Plan. This is another example of the flaws in the “tax the rich” policies. When we lose the “tax cuts on the rich”, almost everyone will pay more taxes.
6. Silicon Valley Blogger presents How College Students Can Save Money posted at The Digerati Life. If I knew then what I know now….
5. Kristina presents A DINK Sandwich posted at DINKS Finance. Life gets easier when you can find a simple yet reliable set of rules to cover most situations.
4. freefrombroke presents It’s Still A Good Idea To Buy A House In This Economy posted at Free From Broke. I was lucky enough to buy my house shortly before the bubble grew. If we would have waited, I’d still be renting.
3. PT presents Credit Card Default: 7 Things You Should Know posted at PT Money. If you are working your way into debt, it’s good to know the what’s in store for you.
2. Joe Plemon presents Three New Car Purchases to Steer Away From posted at Personal Finance By The Book. I’m a few months away from my last car payment. Ever. These are more reasons to avoid a new car.
And finally, the best of the best of the best, sir:
1. Craig Ford presents Make Money Blogging | A Guide for Beginners on How to Make Money Online posted at Money Help For Christians. As I was compiling this list, I kept getting distracted here. I’d reread a section, follow the links, and find I had lost an hour. Read this post.
If you want to be included in the next Best of Money Carnival, don’t forget to submit your best post and follow the guidelines. Next week, it will be hosted by Green Panda Treehouse.
Making the Sale: How to Alienate Your Customers
Have you ever walked into a store only to be instantly surrounded by salespeople trying to sell you whatever their corporate office has decided is the most important thing for them to sell this week?
I remember walking into a big blue electronics store to buy a TV. The beautiful corner-unit entertainment center that perfectly matches my living room will fit–at most–a 32″ screen. Unfortunately, any questions I asked were answered with an attempted upsell to a big screen. I don’t want a fancy TV. I don’t have room for it. It doesn’t fit my needs.
Why do the salespeople persist in strong-arming me into something I can’t use?
Later, I’ll be visiting a couple of potential customers. I know from talking to them that they are expecting a hard sell and a push to sign a contract today.
I don’t do that. I can’t do that.
My goal for these meetings is to find out what these people want, and–more important–what they need. How can I know what they need before I have a chance to sit down and ask them? Even bringing a proposal to the meeting would show that I cared less about them than I do about their checkbooks.
Here’s my checklist of items to bring:
- Notebook
- Pen
- Spare pen
- Business card
- My winning personality
That’s it.
I can accomplish more with “How can I help you succeed?” than I can with “You really need to buy this from me, today.”
If the high-pressure sales-weasels at the big blue electronics store had been taught that lesson, I may have gone home with a high-end (though smaller) TV, rather than going home to buy online.
Have you ever had a sales-weasel try to convince you that you want something you don’t need or need something you don’t want?
Handling a Windfall
What would you do if you were handed $10,000 tomorrow? $20,000?
The easy default answer–if you spend time in the personal finance world–is to pay off debt and save the rest.
But is that the right answer?
When my mother-in-law died, we inherited a little bit of money, a house that hasn’t been updated since the 60s, and a new-ish car that still has an active loan.
We also have about $16,000 in credit card debt and a small mortgage.
The Dave Ramsey answer would be to pay off the card at all costs and worry about the inherited house later, but that seems off. If we modernize the house and fix the things that are broken, we have a mortgage-free rental property. Our local rental market is strong; we should be able to clear $800 per month after expenses.
Is the right answer to pay off our card and scrape to get the house ready or should we fix up the house and use that new income to pay off the card?
My wife has also inherited an IRA that–due to its status as a Beneficiary IRA and the fact that there have been disbursements–has to be drained within 5 years. It’s not huge. After taxes, it’s about the size of the car loan. Should we make the $200/month payments, or cash out the temporary IRA and make the car loan go away immediately? Should we cash out the IRA and open one for my wife?
Although the cause was sad, these are good problems to have. If we manage this right, we’ll be more financially stable than we would have been for decades, otherwise.
I want your opinion, please.
2 questions:
1. House or credit card?
2. What would you do with a $10,000 IRA that has to be cashed out over the next 5 years?
Delayed Gratification
I work daily to raise my kids to be more financially responsible than I have been. One of the most difficult pieces has been to explain the benefits of delayed gratification to my children. It’s hard enough, as an adult, to take delayed gratification to heart. For a child? It seems to be almost impossible.
My son wants an XBox 360 Elite. Good for him. He wants to renegotiate the terms of his allowance to get it faster. Currently, every other time he gets an allowance paid out, it goes into his bank account, to be mostly untouched. The other times he can do as he pleases with his money. We are enforcing a 50% long term savings plan. Now, with a medium-term goal in mind, he wants to keep all of his money, and only put gift money into the bank account.
Should we let him tap his bank account for a shiny new bauble? It’s been building for a while, so it’s delayed, right? I don’t think that would accomplish much. Like any other 10-year-old, his interests change often.
Should we let him change the terms of our agreement, speeding a medium-term goal at the expense of his long-term savings? My wife and I haven’t had a chance to discuss this, but my initial reaction is not to allow it. His savings has the potential to turn into a decent car in a few years, if he wants. That would be a car he knows he earned.
Last week, when we were at the store, he asked if he could borrow some money to buy a game. I don’t expect him to carry his money around everywhere, so I would have allowed it, if he would have had the money at home. He didn’t. His plan was to pay me what he did have as soon as we got home, then work his butt off for a few days to earn enough extra to pay it back. I won’t be a credit agency for my kids, so I said no. He was disappointed, but, by the time he had earned the money, he no longer wanted the game. I consider that a win, but I don’t know that he learned any lesson other than “Dad’s a jerk.”
Someday, when his life launch is smooth due to a lack of debt-dependence, he’ll look back on these lessons and smile.
I hope.
Saving Money: The Warranty Fund
Last weekend, my DVD player died.
No big deal, right? We watch a lot of movies. We get a lot of enjoyment out of watching a lot of movies. Movies are fun for us. We’ve got a projector and a movie screen in our living room. Movies are our biggest pastime. Naturally, losing the movie machine hurts.
The thing that hurts the most is that this hasn’t been a good month for us, financially. My wife gets paid hourly, with semi-monthly paychecks. This means that, in a short month(like February!), her second paycheck is small by a few hundred dollars. When her company switched to that nonsensical plan, I watched for a few months, then set our budget to match the smallest paycheck she received. They haven’t been using this ridiculous plan for a full year, yet.
February caught me by surprise.
I know, it shouldn’t have. According to my research, there has been a February in every single year since well before I was born. I should have been expecting it. Oops.
So, to recap: our favorite pastime was dead and money was a little bit tight. There was no money to shake out of the budget to cover a new DVD player and there was no way we’d hit our emergency fund for something as frivolous—if enjoyable—as movies.
What to do?
About a year ago, I decided to start a warranty fund. There are things we can’t easily afford to replace, so we pay for warranties on some of them. For example, our cell phones have a repair plan, and that plan has saved us more than it has cost us. We have a repair plan for some of our appliances, and that, too, has saved more than it has cost us. My goal was to self-warranty my stuff. I wanted an account that had money that served no purpoase but to help me avoid paying for warranties.
I set up another ING Direct savings account and scheduled an automatic deposit. It’s only set to deposit $25 per month, but over a year, it was enough to replace our home theater system, with some left over. It is, quite simply, money to use when our stuff breaks.
With no warning, and no time to prepare, we still had enough money socked aside to handle one of life’s little surprises, without wrecking our plans.
How do you prepare to replace the things that are going to break?
