Live Real, Now

The no-pants guide to spending, saving, and thriving in the real world.

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Saturday Roundup

Finance, Life, Misc

First, the shameless self-promotion:

If you want to see the glorious wisdom that is my Twitter feed, follow me on Twitter. I’m @LiveRealNow.

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And of course, there is always the wonderful RSS subscription.

The Best Posts of the Week:

Give the gift of kidneys so that Larry Correia can murder you for charity.  Larry is the author of Monster Hunter International and Monster Hunter: Vendetta.   Both books are excellent mind-candy, if you like explosions and monsters that, well, explode.  Save a life and get murdered at the same time.  Who could ask for more?

A V-8 only insinuates virility; multiple child seats prove it. With a title like this, and multiple car seats in my car, I have to include the post.

And finally, here are some tips to save time with email: Email Sucks.

Finally, a list of the carnivals and blogs I’ve participated in:

Dustin at Engaged Marriage was kind enough to run my guest post: Arguing Fairly with your Spouse.

I was included in the Carnival of Personal Finance with Check Your Bills.

Repair Plans, Appliances, and Rancid Meat…Oh, My! was included in the Carnival of Money Stories.

Selling Your Home: The Real Estate Agent was included in the Festival of Frugality.

If I missed a carnival, please let me know.  Thanks to those who have included me!

ING Direct – 2 Day Sale

Finance, Reviews

Today and tomorrow, ING Direct is having a “Financial Independence Days Sale”.

It’s a good sale. If you open a checking account or Sharebuilder account and you’ll get $76.  Apply for a mortgage and you’ll get $776 off of the closing costs.

I have accounts at 4 different banks.  Two of those were opened for specific debt-reduction purposes.  Of the others, one is used for most of my cash flow and bill payments, and the other is ING.   As of this moment, I have 15 accounts or sub-accounts with ING Direct.

Opening an account is painless and only takes a few minutes.   They are currently offering up to 1.25% in an interest-bearing checking account, though I’ve never qualified for more than .25%.  That account comes with overdraft protection, so you are charged interest instead of overdraft fees.

Once you have your first account set up, sub-accounts can be created in literally seconds.  Why would you want a bunch of sub-accounts?  I have a number of saving goals. Each of these goals has its own account at ING.  I can tell at a glance how much we have saved for our vacation next month and far away we are from affording my son’s braces.   My kids each have an account here because, currently, the interest rate is at 1.1%, which is miles ahead of most traditional banks.   Combined with the convenience of total online control, there’s no contest.

Money transfers are smooth.  I use one of my accounts as a transfer account to get money to and from two separate banks.

I also have a Sharebuilder account.  For those who aren’t familiar with it, it is a stock brokerage with low fees and a low barrier to entry.    If you set up an automatic investment, you get $4 stock trades with no minimum.  I’m not aware of any place cheaper.

That all sounds like a lot of ad copy and the links are affiliate links, but the truth is, I am just that happy with ING. I’ve never had an accounting error, or any problems at all.

The downside? Paper checks are verboten.  They will not accept paper checks, but you do have a check card to use.   You can hit 35,000 ATMS for free withdrawals, but any deposits are held for a few days before you have access to the funds.   It can also take 3-4 days to transfer money from ING to another bank.  I keep enough in the accounts that I’m always spending or transferring older deposits while I wait for the new ones to clear.

Even if you don’t like the bank, get a checking account, use it a few times and get $76 for very little trouble.   Open a Sharebuilder account, buy some stock and collect $76 for it.   Without an automatic payment, it will cost you less than $20 to buy, then sell the stock, netting you $56.

Who doesn’t like free money?

Money Problems – Day 6: Reducing Expenses

Finance

Lincoln memorial cent, with the S mintmark of ...
Image via Wikipedia

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 6, we’re going to talk about cutting your expenses.

Once you free up some income, you’ll get a lot of leeway in how you’re able to spend your money, but also important–possibly more important–is to cut out the crap you just don’t need.  Eliminate the expenses that aren’t providing any value in your life.  What you need to do is take a look at every individual piece of your budget, every line item, every expense you have and see what you can cut.  Some of it,  you really don’t need. Do you need a paid subscription to AmishDatingConnect.com?

If you need to keep an expense, you can just try to lower it.  For example, cable companies regularly have promotions for new customers that will lower the cost  to $19 a month for high-speed internet.  Now, if you call up the cable company and ask for the retention department, tell them you are going to switch to a dish.  Ask, “What are you willing to do to keep my business?”  There is an incredibly good chance that they will offer you the same deal–$20 a month–for the next three or four months.  Poof, you save money.  You can call every bill you’ve got to ask them how you can save money.

I called my electric company and my gas company to get on their budget plans.  This doesn’t actually save me money but it does provide me with a consistent budget all year long, so instead of getting a $300 gas bill in the depths of January’s hellish cold,  I pay $60 a month.  It is averaged out over the course of the year. It feels like less and it lets me get a stable budget. Other bills are similar.  You can call your credit card companies and tell them everything you take your business to another card that gave you an offer of 5% under what ever you are currently paying. It doesn’t even have to be a real offer.  Just call them up and say you are going to transfer your balance away unless they can meet or beat the new interest rate.  If  you’ve been making on-time payments for any length of time–even six months or a year–they’re going to lower the interest rate business, no problem.  Start out by asking for at least a 5% drop.  In fact, demand no more than 9.9%.

Once you’ve gone through every single one of your bills, you’ll be surprised by how much money you’re no longer paying, whether it’s because somebody lowered the bill for you or you scratched it off the list completely.

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Debt Options

Finance

Debtor's Prison Historic Marker
Image by jimmywayne via Flickr

When you’re buried in debt, bankruptcy can seem like the only option.   When you get make ends meet, no matter how hard you pull on them.  When bill collectors interrupt every dinner.  When you have to choose between food and rent.   When there is always more month than money.  Do you have another choice?

Yes, you do.

Before you rush to file bankruptcy, take the time to understand your options.

Debt Settlement

Debt settlement is when you quit paying your bills and start sending the money to settlement company.  The settlement company does…nothing.  Really.   They take your money and drop it into investments or interest-bearing accounts.  You don’t get the interest, they do.  Eventually, when your creditors are howling, the settlement company offers to make a settlement on the account.   If the creditor accepts pennies on the dollar to kill your debt, the settlement company pays them.  If not, they get to howl louder and make you more miserable.

While this process is playing itself out over years, your credit is taking a beating.  You are doing nothing to dig yourself out of the hole you’ve dug.  Finally, when your creditors are so desperate that they accept the settlement offer, you get a huge additional hit to your credit.   “SETTLED IN FULL” is not a good status to have on your credit report.

Debt settlement companies do nothing you can’t do for yourself, and doing it for yourself at least lets you keep the interest your money is earning.

Debt Consolidation

Consolidating your debt comes in two varieties, a debt consolidation loan and a debt management plan.

A debt management plan is when you send one large payment to a debt consolidation company, and they pay your creditors for you each month.    The company will usually attempt to contact your creditors and negotiate your interest rate and payments to try to get you into a situation that precludes bankruptcy and will keep your creditors happy.   In the simplest terms, this is a debt payment consolidation.

A debt consolidation loan is generally done by taking out a line of credit against your home or other collateral and using that money to pay off all of your bills.   Then you make the payments to the bank, to pay off your line of credit.   The problem is that, if you can’t make the individual payments, can you make the payment to the line of credit?  If you can’t, you risk losing your house.

Repayment

This option is my personal favorite.    It involves taking responsibility for your decisions, cutting out the unnecessary expenses in your life, and paying your bills.  There are a few popular plans for accomplishing this, including Dave Ramsey‘s debt snowball.   The most important thing to remember are 1) debt it bad so stop using it; and 2) pay off as much as you can afford to each month.  It isn’t as sexy as making all of your debt disappear, but it’s still a good option.

Bankruptcy

Let’s see.  You borrow money on the promise to pay it all back.   After you borrow too much, you renege on your agreement.  You admit your word means nothing and you get all of your debt cancelled, forcing your creditors to raise the interest rates for all of the responsible debtors out there, as a way to balance the risk of those who will never pay.  In exchange you doom yourself to lousy credit for the next 10 years.  In extreme circumstances, bankruptcy may be the only option, but, I’m not a fan.

As you can see, there are almost always better options than bankruptcy.   Please, before you take that leap, look into the other choices.

This is a sponsored post written to provide some insight into the world of bankruptcy and debt consolidation.

 

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Selling Your Car

Finance

English: Jalopy car in Joshua Tree National Pa...

English: Jalopy car in Joshua Tree National Park in Hidden Valley Campground (Photo credit: Wikipedia)

When it’s time to replace your car, most people focus on the new car, instead of the old, but that is ignoring real money.  Your old car–unless it has disintegrated–still has value.  Sometimes, it’s just time to ask yourself, “When should I sell my car?”

When you’re looking to sell your car (like with We Will Buy Your Car), you generally have several options:

  1. Tow & crush. If your car has been wrecked, doesn’t run, or is just old and beat up, you may be stuck with calling a junkyard and accepting $50 for them to pick up your car and crush it for scrap.
  2. Trade it in. This is probably the least hassle, but–other than #1–doesn’t pay well.  Dealerships are willing to pay something under what they will get at a wholesale auction, which is quite a bit less than the blue book value.
  3. Sell it yourself. Now you’re thinking, “He’s going to buy my car! Oh, bother.”  It can be a pain, but it’s also the best way to get a decent price for your wheels.

When you sell your car, there are a few things to keep in mind, much like when you sell something on Craigslist.

  • Don’t be alone. There are bad people in the world, but they don’t like witnesses.  Bad things are much less likely to happen if you have company.
  • Know your price. Specifically, know three price: your dream price, the price that would make you happy, and the absolute lowest price you are willing to accept.  Make sure you figure these numbers out ahead of time.  Know what you are comfortable with before it comes time to close the deal.
  • Check IDs. The buyer is going to want to test-drive your car.  That’s fine, but you want to make sure you know who is driving off in your car.  “Officer, Sumdood took my car.  He was wearing jeans.”  That won’t get your car back.
  • Clean it up. Get the car detailed before you show it to a potential buyer.   A sparkling-clean car will almost always bring in a few hundred extra dollars.  It’s well worth the expense.

Following this plan should make the sale go as smoothly as possible and bring you the most possible money.

Readers, what have you done to dispose of an old car?

This is a sponsored post written to provide some insight into the world of used car retail.

 

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How to Live Happily Without a Budget

Finance

Three years ago, we sat down and built our budget. We spent 9 months adding the non-monthly bills that we forgot about when we created the budget.   Setbacks and shortfalls almost killed the budgeting plan completely. It took almost an entire year to get our budget right.

Unrelated Image

Now?  I refer to the budget once per month.   No more.   I don’t check it at bill-paying time. I don’t think about it daily.   It’s there as a reference when I need it, but it no longer drives our finances.  How did we get to that point?

First, we firmly established our budget.  We know exactly what we need to cover our expenses.   None of the predictable bills catch us by surprise any more.  This is important.

Once we had the budget established, the rest was easy.   I moved almost every bill to US Bank’s online bill-pay system and switched to electronic billing and automatic payments.   The automatic payments are all through US Bank.  I only allow my mortgage to be set up with the merchant. I want total, instant control over the rest.  I won’t call a merchant to ask them to change a payment if something comes up.   The bank sends me an email when a payment is automatically scheduled, and again when it is paid.

Once I got comfortable with the automatic payments, I switched to electronic billing. I don’t need to see the bill or waste the paper if I know it is being handled for me which is why I encourage you to manage all your finances online.  I do check the few bills that may change, like the credit card and cell phone.  Now, I see few of my bills.  They are all sent electronically to my bank, automatically paid, and scheduled in Quicken–all without intervention from me.

[ad name=”inlineleft”]We also use an envelope system.  I know how much we need for groceries, baby crap, clothes, etc.   At the beginning of the month, I take out all of that money in cash and put it into the appropriate envelopes.   Other than this money, almost everything else takes care of itself. I don’t need to pay attention to by bills on a day-t0-day basis.   Any extra money that comes in gets divided among our debt repayment and savings goals, which only takes a few minutes to arrange.

I glance over my budget at the beginning of every month, but I only review it when something changes. If we change our cell phone, or our budgeted gas bill changes, I make the change to our budget.  Other than that, it’s not even an afterthought.

That’s how we do it.

Another option includes the Sloppy Math System. This consists simply of rounding deposits down and rounding expenses up.  The more you round, the better the system works.    If you round every deposit down $50, and round every expense up to the next $10, you are naturally building more room for error.  Given enough time, you will have enough of a slush fund to handle emergencies and the occasional impulse purchase.