EXCITING NEWS: I was selected to deliver a national training in San Francisco this November entitled: Personal Finance Solutions for Busy Mental Health Professionals. This 3 hour workshop includes material from my upcoming eBook. Stay tuned to get first crack at the NEW EBOOK. And it’s FREE to my readers.

“Fun is good.” Theodore Geisel

If anyone knows fun it is the author of The Cat in the Hat, Green Eggs and Ham, and countless other classics. Just thinking about his books makes me smile. Think about it, don’t you just FEEL BETTER smiling and thinking about something fun?

FUN

MAIN TOPIC: SPEND MINDFULLY

I was asked to guest post at Budgeting in the Fun Stuff (BFS). Before agreeing on a topic, I decided to write about her blog name. So away I went writing about how to pay for fun stuff in addition to the necessities.  After a couple of emails, Crystal at BFS requested an article about investing, so lucky for me (and you); I get to publish this “FUN” article at BarbaraFriedbergPersonalFinance.

In the mental health/psychology field there is movement towards mindful living. Mindfulness is simply living in the NOW and focusing on whatever you are doing presently. This premise works great with money; spend on activities and expenses that you deliberately choose.

Spend mindfully and enjoy completely.

Much of your spending was decided a long time ago; your mortgage/rent, insurance, car payment, savings (if you’re smart) etc. Next you pay a certain amount for food, utilities, charity etc. Yet life is more than just the necessities.

A lot is written about saving and cutting expenses (especially by me). Check out Saving without Sacrifice for some helpful tips in this area. Unfortunately, much less focus is placed on paying for fun and pleasure activities. These rejuvenating activities have very real importance in life. Without time for fun and relaxation you have less energy and focus for work activities. Furthermore, if all you do is work, then what is the point?

 Life is about balance and on the flip side of work is leisure and fun!

 PRACTICAL APPLICATION; BUDGET IN THE FUN STUFF

Step 1: Brainstorm-What activities do you do for fun and recreation?  After all, you don’t want to spend your hard earned cash on “fun” activities that don’t really give you A LOT of pleasure!

For example, El Carino (my hubby) and I LOVE TO TRAVEL. When we were just married with no cash (and lived in California) we satisfied our lust for travel with a CHEAP VACATION to Las Vegas. Back in the olden days, you could have a terrific week-end for 2, complete with buffets, souvenirs, a couple of blackjack hands at the $1.00 table, and souvenirs for under $250.00. We milked the coupon books, sat through timeshare presentations for free show tickets, & visited the incredible lobbies of the exclusive hotels. The memories are still with us! And we will never forget cooling ourselves with ice cubes as we drove through the desert without air-conditioning in the summer.

Here are some ideas to get you started, most are low cost, but don’t hesitate to include passions that cost a bit more:

• Lots of folks love hiking, picnics, and outdoor activities; low cost & beautiful.
• Museums frequently have FREE days.
• Discount movies are a fun evening.
• I love television and we budget in the complete cable package (it’s worth the cost for us).
• Don’t skip eating out, if you enjoy it. Try lunch on the week-end instead of dinner! (2 for 1 coupons are everywhere)
• Board games are hours of fun. Or what about a family videogame night. Make it a competition with prizes (from the dollar store) and popcorn!
• Like to entertain-host a pot luck with a theme. Guests love it because they have ownership in the evening.
• Wiffle ball, frisbee, soccer, tennis, mini putt are all great family fun and LOW COST. Why not get the neighborhood involved?
• Like to ski? Skip the downhill and try cross country.
• For you crafters out there, forget the expensive supplies, use your creativity to pick up remnants in the fabric store, supplies in the bargain bin at the craft store, or make something from stuff you already have.
• Rent a canoe and go boating one week end.
• Take the kids to laser tag or paint ball; everyone gets out their hostility!
• Visit a local small town and enjoy a new experience.
• Enjoy the thrill of the hunt while shopping at garage sales (see what you can snare for $5–$10)
• Help-I can’t stop myself…. There are so many fun activities!!!

Step 2: Look over the “fun list” and put a DOLLAR AMOUNT next to each activity.

Step 3: Next to the cost of the activity, give it a FUN RANKING from 1 (not much) to 10 (most fun ever).

Step 4: Mindfully choose your FUN activities. Next month make sure your “SPENDING PLAN” includes activities with the best value for the FUN. That way, you deliberately spend your cash on the HIGHEST VALUE leisure FUN!

Give it a try and let me know how it works out for you! Mix it up, include some low cost fun along with a bit higher priced fun-just make sure that you choose activities with a high FUN RANKING.

ACTION STEP:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.  

Gather the family around and list ALL THE FUN ACTIVITIES YOU CAN THINK OF. Go wild, don’t hold back. Then go through and price and label each one with a FUN RANKING.

image credit: Cuba Gallery

YAKEZIE PERSONAL FINANCE BLOGS 

After every article for the next several weeks, you will be introduced to several Personal Finance web sites in the Yakezie network. Each one has their own unique voice and style. The consistency in all is their desire to help others. Consider visiting a few each day! 

Saving Money Today
Single Guy Money
Single Mom, Rich Mom
Smart On Money
Smarter Spend
Squirrelers

EXCITING NEWS: I was selected to deliver a national training in San Francisco this November entitled: Personal Finance Solutions for Busy Mental Health Professionals. This 3 hour workshop includes material from my upcoming eBook. Stay tuned to get first crack at the NEW EBOOK. And it’s FREE to my readers.

“Life consists not in holding good cards but in playing those you hold well.” Josh Billings

Build skills in all areas. Set goals. Success will follow.

MAIN TOPIC: Pay attention to your Spending

Esmerelda  is a college student with lots of money trouble; ATM fees, overdrawn account fees, credit card late and interest fees, rescinded credit card, late fee on tuition account, and overspending in general. Hundreds of dollars in fees and interest ate up her meager savings and caused her LOTS OF STRESS!!

I want to save you from Esmerelda’s troubles.

At the beginning of the school year, you college students are on your own for the first time with worries about friends, school and MONEY. I’ll leave the friends and school worries to someone else. But I CAN TEACH YOU WHAT YOU NEED TO KNOW ABOUT MONEY MATTERS while you are in college.

IT IS YOUR RESPONSIBILITY TO HANDLE YOUR OWN MONEY whether you get cash from mom & dad, loans, jobs, or any combination. Follow these steps and you’ll have LESS MONEY STRESS NOW & LATER.

PRACTICAL APPLICATION: Get Control of your Cash

1. Open a checking account and savings account with NO FEES, for college students.

2. Arrange with employer to have check AUTOMATICALLY deposited in your savings account.

3. Use an on line account or bricks and mortar bank or credit union.

4. Ask these questions and only open if they say NO FEES in writing:

Do you have an account for college students with no fees at all?

Does this account offer free ATM withdrawals?

5. If you need a loan for school expenses, go straight to the Financial Aid office for HELP. Work with them as long as it takes to get the money you need. That’s what they’re there for!

6. TOTAL ALL YOUR INCOME- Estimate income from job, loans, parents, scholarship, and aid. WRITE DOWN YOUR INCOME IN A NOTEBOOK or chart like this one. Categorize by month or lump sum.

7. Complete a chart like the following and write down every expense you are responsible for; cell phone, tuition, rent, utilities, car payment etc.; include amount; date due; how paid. These are charges that are FIXED and don’t have much flexibility.

8. Add up your expenses write in the last line of the chart.

9. Next, add any expenses that you control; beer, restaurants, entertainment, etc. These are your DISCRETIONARY EXPENSES. These are the easiest places to cut spending.

10. TOTAL ALL YOUR EXPENSES.

11. If you have a credit card, use only for emergencies. If you don’t have the cash, don’t spend it!

12.  If you have a credit card, PAY THE BALANCE DUE IN FULL AT THE END OF EVERY MONTH.

13.  The money that is not due monthly, like your tuition or insurance, should be in your savings account. Make sure that the amount you will need for these infrequent payments stays in the savings account until you need it.

14.  Pay every bill early. At least a week before the bill is due, pay it.

15.  Bunch up bill paying into 2 times per month.

16.  Look at your income and expenses-Are you spending on things or experiences that are worthwhile to you? REALLY THINK ABOUT THIS ONE. If not, curb your spending.

17.  Read The Secret to Saving without Sacrifice here.

18.  Studies come first, but if you have extra time, consider partying less and get a part time job.

19.  Every month, put your discretionary money from each category in an ENVELOPE and label it. For example, $80.00 cash goes in an envelope at the beginning of the month. After you spend that $80.00 you are done with entertainment for the month!!!

20.  At the end of the month, analyze your income and spending. Complete another Income and expense tracking sheet. Make changes according to the info from the prior month.

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

1. Read the entire article again.
2. Choose one or two steps to begin immediately.
3. Write in your planner the steps to take.
4. After completing the first steps, repeat until all are completed.

Write in with your questions and experiences.

YAKEZIE PERSONAL FINANCE BLOGS

After every article for the next several weeks, you will be introduced to several Personal Finance web sites in the Yakezie network. Each one has their own unique voice and style. The consistency in all is their desire to help others. Consider visiting a few each day!

 The Debt Hawk
The Millionaire Nurse Blog
The Saved Quarter
The Wealth Artisan
Ultimate Money Blog
Watson Inc

BarbaraFriedbergPersonalFinance instructs and motivates you to become wealthy by teaching basic personal finance principles with engaging stories and understandable examples. Learn to become rich and happy from a real Portfolio Manager

“KNOWLEDGE IS POWER.” Sir Francis Bacon

Who would have thought this quote, from the 1500’s would still ring true today?

Many years ago I read a letter written to Dear Abbey. (Yes, I read Dear Abbey, please don’t laugh.) The gist of it was this, a 38 year old guy writes that he wants to be a doctor, but is worried that he’s too old to go to medical.  He complains that he will be 42 years old when he finishes med school. Dear Abbey writes back, if you go to medical school now, in 4 years you will be a doctor, if you don’t go to medical school, then in 4 years you will just be 4 years older.

That letter stuck with me when I was deciding to return to school for a second graduate degree in mid life. It stuck with me when I began writing a book. And it was a factor in spurring me on to start a blog. In fact, my life is characterized by taking risks and moving forward no matter what. In the past, I was a huge procrastinator, insecure, and afraid of failure; I am proof of the power of stepping forward in spite of fear, age, obstacles, and criticisms of others.

On that note, I want to share my 6 month anniversary celebration as a personal finance blogger with you. My success in readership has far surpassed my expectations. I began with an Alexa ranking in the 1,000,000 range and have dropped to an impressive level of less than 160,000. I owe a large amount of that success to the YAKEZIE PERSONAL FINANCE NETWORK and Len Penzo dot com  who encouraged me to join. The Yakezie mission is in alignment with my own; selflessly  promote financial literacy and personal finance.  El Carino, my biggest cheerleader, promotes my blog both to those interested as well as the uninterested and loves me no matter what. In fact his support has given me the confidence to “try anything.” My daughter is my social media consultant extraordinaire, offering many ideas, strategies, and tips to touch her generation.  Additionally, she constantly provides insight into the GEN Y mind. Finally, my outstanding MBA professor, Dr.  Oranee  T.  encouraged me to start the blog and continue with my book.

On this 6 month anniversary I want to share the links that “Google Analytics” the blog analyzer, said are your favorites. Some surprised me, others not so much. The TOP articles cover a variety of topics from investing, to mental money problems, and the financial challenges of the poor.  If you haven’t read them before, please check them out and let me know what you think.

 I am honored by your support and look forward to offering you quality PERSONAL FINANCE information to help you become wealthy.

# 1 ALL TIME FAVORITE: GET RICH WHILE YOU SLEEP WITH THE MAGIC OF COMPOUNDING

“Everyone has the brainpower to follow the stock market. If you made it through fifth-grade math, you can do it.”
Peter Lynch   

One of the greatest investors of our time attests to the simplicity of investing in the stock market. Read this post and find out why. Following is the “Cliff Notes” version of why you need to put part of your long term investment dollars in the stock market. 

Main Topic; Stocks  

The historical long term growth of American business is amazing. American business is frequently represented by the Standard and Poor’s 500 Stock Index (S & P 500). This index of 500 stocks is considered a barometer for the complete US Stock Market. 

Forget about the recent recession and downfall of the stock markets for a minute and take a peek at some historical returns of the S & P 500. Although historical returns do not guarantee future returns, take a look anyhow. When looking at these returns, think about the stock market as a collection of U.S. businesses, not mutual fund or brokerage account statements. Then ask yourself if you think U.S. businesses and the economy will grow over the next 20, 30, or 40 years?

Click here to read more.

# 2 RUNNER UP: HOW TO AVOID LIVING PAYCHECK TO PAYCHECK

“Have compassion for all beings, rich and poor alike; each has their suffering. Some suffer too much, others too little.” Buddha

Wealth requires a commitment and responsibility to those with less. Offer your knowledge and expertise to those without.

MAIN TOPIC: The Problem with Check Cashing Services

I just returned from a quick trip to Wal Mart to pick up some groceries. It’s Friday afternoon and my check out lane was directly across from the “Money Center.” This “Money Center” is a place where you can cash checks; for a fee, buy money orders; for a fee, and do a lot of other financial tasks; FOR A FEE. It is not a bank.

Because at a bank, if you have the right type of account, you can get your paycheck deposited FOR FREE!

The line was really long at the money center. In fact, there were people trailing out into the main part of the store. Many lower income people DO NOT HAVE A BANK ACCOUNT.

I remember back to my first full time job as an invoice clerk; I was amazed on payday when my co-worker and I went to the bank. She CASHED HER ENTIRE CHECK AND TOOK ALL OF THE MONEY! I thought it was quite odd that she didn’t put any of it into the bank.

But I digress, back to the Wal Mart Money Center. I got very despondent after seeing the enormous line-because I knew most individuals were there because they didn’t have a bank account. And they were lower income and paying a fee that higher income people didn’t pay, just to gain access to their money.

 I was struck by several things:

1. How can one save, if he/she has NO BANK ACCOUNT?
2. How can one move out of living “paycheck to paycheck” without a BANK account?
3. Where are those individuals in the Money Center line going to learn the principles of Financial Literacy?

Click here to read more.

#3 THIRD PLACE (it was a tie): REDUCE STRESS-GET RID OF DYSFNCTIONAL FMONEY BEHAVIORS-part 3

Money & Relationships-Make it Work!

“I’d marry again if I found a man (or woman) who had fifteen million dollars, would sign over half to me, and guarantee that he’d be dead within a year.” Bette Davis

 You gotta take relationships with a bit of levity or you’ll never make it through! This quote is the perfect solution for money and relationship problems. Unfortunately, it’s a bit unrealistic. Maybe a million or two is more doable.

No really, read on and find out how to handle money stress in a relationship.

MAIN TOPIC: She’s a Saver, He’s a Spender

This article is the 3rd in a series relating poor money behaviors with stress (#1-Shopping to Solve your Problems & #2 Procrastinating Dealing with Financial Matters). The topics are inspired by an article entitled Emotions, Money, & Financial Stress by Nancy Losinno, published at the US Department of Energy, Brookhaven National Laboratory website . 

You know who I’m talking about. Bluetooth came out, he got it. Iphone, Ipad, flat screen TV, etc. he bought them all. New car every few years was required by him. Meanwhile the debt piled up. She tried to save, but his spending counteracted all of her efforts. 

I’m hesitant to continue, as the story is so familiar. We all know how it turns out…… fighting, stress, anger, depression, marital discord and DEBT.

Overspending in a relationship is unhealthy whether practiced by one or both partners.

Losinno clearly stated, that in a relationship the partners have the choice of creating WEALTH or a “FINANCIAL HELL ON EARTH.” Money secrets are devastating. Unhealthy family money attitudes can be disastrous. Money problems in a relationship can be the beginning of the end.

Click here to read more.

#3 THIRD PLACE (it was a tie): WHEN NOT TO SPLURGE

“If I splurge on anything, it’s cologne. I love smelling good.” Zac Efron

This quote suggests that Zac Efron, the wealthy movie star sensation from High School Musical and many more projects, is so financially savvy that his one indulgence is cologne. If that’s his lone indulgence, then this guy is on a path of financial strength.

Personal disclosure: I have never met nor spoken to Zac Efron. (Although I wouldn’t turn down an invitation to meet him!)

MAIN TOPIC: I am ALL FOR SPLURGING

I carefully plan my our family splurges:

• El carino (my hubby) indulges in his hobby of collecting sports memorabilia.
• I go out to work at a coffee shop once or twice a week and buy a coffee.
• Special occasions find me at the COACH outlet for a nice bag.
• Travel is planned and a big priority for our family. This week-end it’s a quick family get away to Atlantic City! (No gambling for us!)

I do not covet expensive jewelry, cars, fine dining (my birthday dinner was at Applebee’s this year). In fact, when el carino wants to tease me, he goads me with the offer to buy me jewelry (because he KNOWS I don’t value spending our money on expensive jewelry). In fact, I totally don’t get the women who want a huge diamond (bought on credit). Give me the cash any day to stick in the investment account.

Please don’t think this is a condemnation of cars, jewelry, or fine dining; it’s not. It is a recommendation to spend on those activities that YOU value, not what your neighbors, TV, or society tells you to value.

Click here to read more.

ACTION STEP:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

Commit, write down, and take one step towards financial responsibility today.

Image credit: Kazeee

YAKEZIE PERSONAL FINANCE BLOGS

After every article for the next several weeks, you will be introduced to several Personal Finance web sites in the Yakezie network. Each one has their own unique voice and style. The consistency in all is their desire to help others. Consider visiting a few each day!

Zordane.com

Yes I am Cheap; Digging my Way Out of Some Serious Debt

Young and Thrifty; Saving Generation Y

Well Heeled Blog; Savvy Living through Personal Finance

Wealth Pilgrim; A Journey to Self, Wealth, & Health

Wealth Informatics; Financial Freedom through Education

EXCITING NEWS: I was selected to deliver a national training in San Francisco this November entitled: Personal Finance Solutions for Busy Mental Health Professionals. This 3 hour workshop includes material from my upcoming eBook about Investing. Stay tuned to get first crack at the NEW EBOOK; and it’s FREE to my readers.

“If I splurge on anything, it’s cologne. I love smelling good.” Zac Efron

This quote suggests that Zac Efron, the wealthy movie star sensation from High School Musical and many more projects, is so financially savvy that his one indulgence is cologne. If that’s his lone indulgence, then this guy is on a path of financial strength.

Personal disclosure: I have never met nor spoken to Zac Efron. (Although I wouldn’t turn down an invitation to meet him!)

MAIN TOPIC: I am ALL FOR SPLURGING

I carefully plan my our family splurges:

• El carino (my hubby) indulges in his hobby of collecting sports memorabilia.
• I go out to work at a coffee shop once or twice a week and buy a coffee.
• Special occasions find me at the COACH outlet for a nice bag.
• Travel is planned and a big priority for our family. This week-end it’s a quick family get away to Atlantic City! (No gambling for us!)

I do not covet expensive jewelry, cars, fine dining (my birthday dinner was at Applebee’s this year). In fact, when el carino wants to tease me, he goads me with the offer to buy me jewelry (because he KNOWS I don’t value spending our money on expensive jewelry). In fact, I totally don’t get the women who want a huge diamond (bought on credit). Give me the cash any day to stick in the investment account.

Please don’t think this is a condemnation of cars, jewelry, or fine dining; it’s not. It is a recommendation to spend on those activities that YOU value, not what your neighbors, TV, or society tells you to value.

PRACTICAL APPLICATION: When not to Splurge

Do not splurge if these are your reasons:

• I really really want it
• I deserve it
• I owe it to myself
• I feel like getting it
• Why not, you only live once
• It will make me happy or important

These reasons to splurge are usually justifications to overspend; just thinly veiled self deceptions.

Look, if you can afford it, pay for it this month, and it’s in your budget, then why not.

But, if you just “WANT IT” but don’t have the cash to pay for it, even if you work hard….. you will regret the IMPULSE PURCHASE.

The August 2010 issue of Money magazine includes 7 Secrets of Super Savers. And although some of the strategies were a bit over the top, many included quite a few luxuries. Delay purchases over a certain amount was a sensible option. After all, the Elovitz family didn’t say “NO” to any purchase, but just to think about it and delay. Another family did not buy anything until they could pay for it in cash. No credit for them. Live below your means is a “no brainer;” but what about living on one spouse’s salary and banking the other?

On the flip side….it is IMPORTANT TO SPLURGE ONCE IN A WHILE. After all, if all you do in life is restrict yourself, you will feel deprived and be more likely to go on a spending binge.

How to make the decision to SPLURGE? Plan a splurge and consider your own personal splurging guidelines.

These are the FRIEDBERG SPLURGE GUIDELINES:

1. Plan , the purchase, not an impulse buy.
2. It is something we will enjoy for a while; either thinking about, watching, remembering, or using. Vacations and Broadway shows fit this category. For our splurge, el carino and I budget in trips to NYC to see Broadway Shows (frequently purchasing half price tickets).
3. Never buy on credit.
4. Consider whether it is worth the cost, TO US. On a recent trip to visit my parents, my mom offered to take us to a really fancy restaurant to celebrate my birthday. Even though my parents were treating, the cost of an extravagant restaurant is not worth the expense. I value eating out, in fact, I love to eat out…. But really upscale restaurants are not of value for me. I chose a nice seafood restaurant; healthy and tasty!!!
5. Pays lasting dividends: Education!

Splurging is important! Who wants to live a life of total deprivation? Wealth in life is actually more important than wealth in money. Of course, the irony is that you need a certain amount of financial wealth in order to splurge without debt.  Although, a bubble bath is a great (cheap) splurge,  it isn’t the same as a trip to Puerto Rico! Choose your splurges to fit into your own budget!

ACTION STEP:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.  

Write out a list of your personal SPLURGE GUIDELINES.

What do you splurge on? How do you plan for it?

 Check out what other personal finance bloggers are saying about Splurges.

Cool to be Frugal asks: Is it ok to Splurge when you are in Debt?

Well Heeled Blog wonders if Abnormal Penny Pinching Justifies Splurges?

Money Reasons discusses Losing Control to Lifestyle Inflation

Mea Culpa, I just Spent $1,450 at Apple said the Financial Samurai

Money Funk bemoans her Emotional Spending

Ramit Sethi at I Will Teach you to be Rich shares The Money Diaries of a 25 year old Single Mom who Writes Bad Checks

Image credit: Swamibu

Summer’s a time when you can kick back, relax and read a bit more. In that vein, I’d like to recommend some enjoyable and informative articles I’ve come across recently. Get a taste here, and stop by the authors’ sites for the full versions.

Could the Free Market have Ended Racism?

Let me state, I am not a fan of racism (As a matter of fact, some might call me a “liberal.”)! I don’t think the free market is enough to end racism but read on to hear a fascinating discussion at The Amateur Financier:

“ ‘The free market, as usual, will address the problem.  It punishes racists.  A business that doesn’t hire blacks will lose customers and good employees.  It will atrophy while its more inclusive competitors thrive.’ (John) Stossel raises an interesting point: could the free market have ended discrimination without government intervention?  Or were the government actions like the Civil Rights Act and its prohibitions on employment discrimination a needed remedy to the segregation era?”

2010 Tax Brackets; Which Income Tax Bracket am I in?

No one is enthusiastic about paying taxes, that being said…. the more you understand about the system, the more likely it is that you will KEEP MORE OF YOUR CASH! Read on about this important issue at The Oblivious Investor:

“The Federal income tax is referred to as a “progressive tax.” Of course, it’s not progressive in the same way that a social movement could be said to be progressive. What the term means in this case is that, as your taxable income increases, so does the rate at which you are taxed. People will often make statements such as “I’m in the 25% tax bracket.” For example, as you can see in the table below, a single person with a taxable income of $40,000 would be in the 25% tax bracket. People frequently misunderstand this to mean that all of the person’s income is taxed at a rate of 25%. In reality, the person’s overall tax rate will be much lower.”

The TAO of the Intellect

Loved the title, and the content gets you thinking… just not too much! Read more at Early Retirement Extreme:

“Another very human trait is to weigh recent information more than historical information or worse, weigh it higher than  “what is not seen”. The latter causes an enormous amount of confusion. One might almost say that the entire field of economics is dedicated to solve this problem (the broken window fallacy), at least after a couple of beers.”

Six Tips from Yorkshire’s Top Thriftiest Grannies

Who wouldn’t want to read this post? The grannies have the best tips; here’s a sneak peek, read more at Miss Thrifty:

“TOP TIP 4 – Pack junk mail into the empty cardboard toilet roll tubes and use them as firelighters.”

Good Debt vs. Bad Debt 

I agree with MOST of the content here… but read on and see what YOU think. Young and Thrifty has a great writing style, enjoy….. 

“Yes.. I mentioned the “D” word. Debt. Just letting that word roll off your tongue makes you feel like you have halitosis. Well, get that tongue scraper and Listerine out, because as surprising(and somewhat crazy) as this may sound, there is such thing good debt AND bad debt.”

Crank up your Savings Goals at Smarty Pig

Right now, get a (relatively) high yield at this unique goal-oriented savings site as discussed at Free From Broke.

“Whether you want to save up $500 for back to school shopping, or $5,000 for a family vacation, it is possible to use SmartyPig to reach that goal.  The concept is fairly straightforward, and works simply.”

Could you Give it all Away?

The uber-wealthy Bill Gates and Warren Buffett are doing just that? Join the discussion at Beating Broke:

“At the real bottom of this is a more important question.  Why do we build wealth?  What purpose do we give our lives that we strive to attain wealth.  In Warren Buffetts case, I think you could argue that he has always seen it as a challenge.”

Buying Blogs, Selling Blogs: How I Built my Blogging Business

Sam at the Financial Samurai is somewhat of a “rock star” in the personal finance blogging world as founder of the Yakezie Network. This guest post on his site is a real peak inside the “business of blogging.”

“This is a guest post written by Mike, a young financial planner / web entrepreneur who is pursuing his dream of running his online business. You can follow his progress at The Financial Blogger and read his other financial blogs at Green Panda Treehouse and Intelligent Speculator. 3 years ago, I was told by many bloggers: “You will never make money blogging. And if you do, $200/month will be your highest peak ever”. Three year ago, The Financial Blogger was averaging 500 visits per month and I was ecstatic when I made my first deal of $10 for a link. Three years later, I now run three financial websites, bought 2 of them and flipped a blog within a year.”

My Teen-age Son, the Cell Phone, & a Bill for $1,055.20

Len Penzo dot com is one of the most hilarious personal finance writers around. He DOES NOT DISAPPOINT with this uproarious post about his son’s adventures with texting & a new cell phone:

 ”I can’t remember the exact day he first requested his own cell phone, but I am quite certain the first letters he learned in school weren’t A-B-C.  They were A-T-(T). When Matthew turned 12 last year, we decided it was finally time to grant his wish.   The only condition was that he had to pay us $25 per month to maintain his account.  Knowing that he could easily earn $40 per month by simply mowing the lawn and doing chores around the house, Matthew readily agreed – and so we got him his phone.”

CARNIVAL of Money Stories 2 featured my article this week; Reduce Stress Get Rid of Dysfunctional Money Behaviors-Part 2. Read my article as well as other money stories at this informative round up.

“Overcome a Passion for Procrastination (in dealing with financial matters). ‘Procrastination is like a credit card: it’s a lot of fun until you get the bill.’ Christopher Parker

This young actor hit the nail on the head! Avoiding and procrastinating seem fine, for a while. Later- the price you pay for procrastination is quite HIGH. Charge away with the credit card; if you don’t have the cash to pay it off every month, you are walking on a treadmill of pain.”

ACTION STEP:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

Today, and every day, LEARN SOMETHING NEW!

What do you think about this summer reading? Agree, disagree, join the discussion……leave a comment.

Money & Relationships-Make it Work!

“I’d marry again if I found a man (or woman) who had fifteen million dollars, would sign over half to me, and guarantee that he’d be dead within a year.” Bette Davis

 You gotta take relationships with a bit of levity or you’ll never make it through! This quote is the perfect solution for money and relationship problems. Unfortunately, it’s a bit unrealistic. Maybe a million or two is more doable.

No really, read on and find out how to handle money stress in a relationship.

MAIN TOPIC: She’s a Saver, He’s a Spender

This article is the 3rd in a series relating poor money behaviors with stress (#1-Shopping to Solve your Problems & #2 Procrastinating Dealing with Financial Matters). The topics are inspired by an article entitled Emotions, Money, & Financial Stress by Nancy Losinno, published at the US Department of Energy, Brookhaven National Laboratory website. 

You know who I’m talking about. Bluetooth came out, he got it. Iphone, Ipad, flatscreen TV, etc. he bought them all. New car every few years was required by him. Meanwhile the debt piled up. She tried to save, but his spending counteracted all of her efforts. 

I’m hesitant to continue, as the story is so familiar. We all know how it turns out…… fighting, stress, anger, depression, marital discord and DEBT.

Overspending in a relationship is unhealthy whether practiced by one or both partners.

Losinno clearly stated, that in a relationship the partners have the choice of creating WEALTH or a “FINANCIAL HELL ON EARTH.” Money secrets are devastating. Unhealthy family money attitudes can be disastrous. Money problems in a relationship can be the beginning of the end.

PRACTICAL APPLICATION: Get Real and Slam the Debt

It’s helpful to choose a partner whose money style is similar to yours. I am really lucky, el carino and I have very similar money habits. Neither of us is extravagant nor strives for extravagance. I probably shouldn’t tell you this, but…. since our 5^th month together, I have handled almost all of the financial matters (not all the decision-making of course) for the family, and that has worked out really well for us. Obviously, I am not recommending this alternative for others, but it’s suitable for our family.

PROBLEM 3: MONEY & RELATIONSHIP TROUBLES

Lack of communication in money matters is a big problem. So is a difference in money attitudes. The problems that arise from money secrets and mismatched money attitudes can be corrected.

SOLUTION:  

1. Discuss money issues with your potential or current partner.
2. Come clean. Lay it all out on the table.
3. Together, list your debts and spending secrets, even though it is hard. If you can’t do it alone, see a counselor or Employee Assistance Program (EAP) specialist (through work).
4. Schedule money talks regularly.
5. Make an agenda and list you financial issues.
6. Devise a plan to get rid of credit card debt.  Stick to the plan.
7. Make a budget or spending plan.
8. Find a middle ground for spending & saving that works for both of you.
9. Look for low cost alternatives for the spendaholic; a new CD instead of a new MP3 player.
10. Check out Oprah’s Debt Diet. After all, isn’t Oprah known for access to the best of everything?
11. Start small, make a small money goal to start. Then reward yourselves with a “free” prize. i.e. a picnic in the park, a TV night without the kids, listening to music together, use your imagination….

Compromise, compromise, compromise 

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

•  Continue to talk regularly and honestly about your money problems.
• Motivate each other to spend less and look for ways other than spending to enjoy life.

“When I chased after money, I never had enough. When I got my life on purpose and focused on giving of myself and everything that arrived into my life, then I was prosperous.”
Wayne Dyer

 Ironic isn’t it that a personal finance blog writes so much about non-financial matters. If one focuses on passion and service in life, practices discipline in all things, then money becomes less of a target and life becomes richer.

 MAIN TOPIC: Behavior is Everything

This article is the first in a series relating poor money behaviors with stress.

What you do and how you act determines the outcome of your life. We have a visiting college student, Juan, in our home for the summer. He is a bright, talented, and accomplished young man who has developed some unhelpful habits. Like many of us, he procrastinates which leads to distress. He has difficulty discerning the important from the unimportant. On top of that, this young man is graduating college soon and is defining his next career step. Recently, Juan realized that he is an adult and must behave as one. No more partying and spending with abandon, with no regard for the consequences.

Wow, it’s a lot for a young person today to contend with. Juan isn’t so different than many adults; he has difficulty managing his finances and paying his bills. We are attempting to help him focus on his future and learn the link between HEALTHY BEHAVIORS AND LIFE SUCCESS.

If I said it once, I said it 1000 times to my own daughter; your behavior defines who you are! It’s not what you say, but what you do that matters! This article will steal borrow some concepts from an article I came across called, “Emotions, Money & Financial Stress.”

Feel free to pass along these ideas to anyone who is looking to clean up their financial lives.

PRACTICAL APPLICATION: 1st Dysfunctional Money Behavior and How to Combat it

Depression, stress, and anxiety are all byproducts of money stress. Current “happiness” research shows that those individuals who experience more control over their lives are happier. Learn to recognize unhealthy money behaviors, control them, and reduce stress.

 PROBLEM 1: GO SHOPPING to solve your problems.

 In the same way that overeaters use food to solve emotional issues, over-shoppers go to the mall to “feel better.” In both cases, the relief is short lived, and creates more long lasting problems. If you use food to fill the emotional hole, you get fat and unhealthy. Use shopping the same way and you get debt, bills, & bad credit. Not to mention a home filled with stuff you don’t need!

SOLUTION:

1. Next time you feel the urge for emotional shopping-STOP.
2. Slow down, take a deep breath, and ask yourself what the real problem is.
3. Really examine what is bothering you, and then determine whether the BEST solution to this problem is shopping.
4. Is the solution to your stress and problems a trip to the mall? Will shopping offer a lasting answer to the problem?
5. If shopping will not provide a long term answer to the stress, then do not shop. First, accept the fact that life has its stressors and all successful individuals have learned to TOLERATE A CERTAIN DEGREE OF DISCOMFORT. Do not feel like it is imperative to immediately eliminate the anxiety.
6. Next, take a step to relax, take a walk, write in a journal, or talk to a friend. Find an activity that does not involve spending, to practice for a bit. Realize that the stress will not continue forever.
7. Finally, brainstorm possible solutions to the problem/stressor. Do it alone or with a friend. Write down any possible resolution you can think of.
8. Take a break and do nothing for a bit. Let your mind clear.
9. Come back later and plan your next step.

Work on this dysfunctional money behavior first. Recognize when ”the urge to splurge” happens and follow the steps to develop a healthy alternative.

 Stay tuned for part 2: Passion for Procrastination, in Dealing with Financial Matters 

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

• When the urge to spend, as a problem solving solution arises: DO NOT GIVE IN.
•  Make a list of relaxing activities.
•  Post your personal RELAXING ACTIVITIES prominently.
•  Practice one of these behaviors instead of shopping.

 RECENT FINDS IN THE PERSONAL FINANCE ARENA; No spending required!

CARNIVAL: Please visit the Carnival of Personal Finance at Funny About Money, where I’m featured, for more personal finance articles.

Check out the FREE sites I’ve been visiting recently, and enjoy:

Watson, Inc.-Free giveaway edition

Monevator

Wealth Pilgrim

Little House in the Valley  

Frugal Confessions

The Saved Quarter

 Len Penzo dot Com

My Journey to Millions

Digging Out from our Mess

Categories: budget, life, saving, spending

Summary

Jacq at Single Mom Rich Mom had the audacity to challenge me to a spending challenge:

 Who can cut spending by the greatest percentage in “variable” spending categories?

Next Laura at Move to Portugal  joined in as well as Christine from Money Funk. Finally, Jacob from Early Retirement Extreme  decided to “keep the fight clean.” So, the month has passed and now it’s time to determine the WINNER!

We each had our own strategies, all very “hush hush” to nail the competition. Jacq was determined to win the grocery category by only bringing a $20 to the store. I was less systematic, although equally determined. My house was in chaos with the return from college of our daughter and I thought for sure I would be doomed. But not one to give up on a challenge, I decided to persevere and give the competition my best effort!

The variable expense categories for the challenge include:

• Auto
• Clothing
• Dining out
• Recreation/Entertainment
• Groceries/personal care/household items

The Methodology

I took the total spending in each of those categories for the past 12 months. Next, I divided by 12 for an average monthly spending. That was my baseline. Next, for the grand summation; I compared overall spending as well as individual category spending with the monthly average and calculated the difference.

AVERAGE MONTHLY VARIABLE SPENDING

7/1/2009- 6/30/2010 compared with June, 2010

Analysis

Auto-Down 76%, hooray! Got a $50 reward card from credit card company, walked more, and bunched errands.

Clothing-No one in the family bought any!! The $66 was for my hair, which I categorize in the clothing column. So now you know, I kind of splurge on my hair! You may wonder why I put it in the clothes column- but, it doesn’t really matter. What matters, is that I’m consistent, and every 8 weeks the hair salon cost goes in the SAME category.

As a side note, although I spend quite a bit at the hair salon, my husband, on the other hand, does not! In fact, he prefers that I cut his hair! Thus, we are saving 20 bucks a month on his hair care!

Dining out-Oops, up a bit over 2 ½%; included daughter home from college & FATHERS Day buffet!  But it was really worth it. The buffet was delicious, and I love to eat out!

Recreation & Entertainment-AMAAAAZING! In spite of my husband’s hobby, we are down 70%. As you may remember, we get the maximum enjoyment from our TV & cable.

And, incredible scenery, beautiful walking paths, and summer time gave us the opportunity to enjoy the FREE outdoors!

I TOOK A PAGE OUT OF Jacob’s Early Retirement Extreme strategy and put a 7 piece drum set and electric piano on Craig’s list to really slam the recreation/entertainment category….. Unfortunately, the only responses I got were from spammers. NO SALE!

Grocery etc.-Only fell  7.38 %, about 38 bucks. I confess, I am a fanatic about fresh fruits and vegetables and really healthy eating. Produce this year is very expensive. I think that’s what killed us here! But, all in all even with the food inflation over the year, we did spend $38 less than average. Hey, that’s more than enough for a nice dinner out!

Overall, we spent $866 in variable categories versus an average of $1,365 for an overall savings of $499, a decline of 37%. I AM THRILLED!! 

Summary and Conclusion

The competition pushed me to find low cost ways of living. I visited lower cost grocery stores, looked for inexpensive entertainment, still splurged on my hair-but didn’t buy any clothes in June and overall had a good month.

Did I feel deprived? Maybe a little…. but I made sure not to cut back too much, because then I would just go out and binge shop when the challenge was over, and that would totally defeat the purpose.

Was it fun? YES, it was great fun. I loved the camaraderie of the competition and the savings. Now our June spending was a bit slimmer than usual, which gives us a bit of a cushion. After all, with the recent drop in the stock market, our net worth took a bit of a hit in June. But after cutting spending back last month, the market decline is a bit less painful.

Try competing for your own goals with a partner or two and see if you find it as motivating as we did!

Image credit: Andriz 

Write in about your tricks to live large on a slim budget.

Categories: competition, life, saving, spending

“Americans love to fight. All real Americans love the sting of battle.” George S. Patton

I’m proof that Patton is right, because I LOVE A GOOD CHALLENGE.  But hey, wait a minute, he forgot about Canadians-my arch nemesis and competitor: Jacq at RichMomSingleMom is from Canada. OK, Patton MUST have been referring to North Americans.

MAIN TOPIC: What’s Going on with the Catfight?

OK, here’s the deal. I agreed to a spending reduction challenge with Jacq @ Rich Mom Single Mom, Christine @ Money Funk, and Laura @ Move to Portugal, back in the beginning of June. Jacob @ Early Retirement Extreme,  the king of spending reduction is our commentator/ moderator.

 At the time I thought it was a great idea. Now I’m wondering, WHAT WAS I THINKING?

Here is a summary of the challenge:

1. Competition categories:  Auto, clothes, eating out, entertainment/recreation, groceries, & household/personal care.
2. Methods: Get a personal baseline by averaging out spending in those categories.
3. Track spending in those categories for the month of June
4. Compare personal spending to baseline

Goal: Reduce spending in each category. Report to other competitors the percentage decrease.

Winner: Greatest percentage decrease vs. own benchmark.  Overall winner and category winners

Last week I wrote complained about my plight. My husband was not as committed to the challenge as I was. After hours minutes of thought about the wonderful advice from many of the spectators to this dramatic event, I accepted Sam @ Financial Samurai’s suggestion to motivate El Carino (my husband) for the competition with a PRIZE!! OK, that’s going pretty well. Now he is mindful of his spending and referencing the challenge too!

Next, my daughter returned from college last week. Although I considered recommending a family fast for the entire week to cut down on groceries and eating out, I knew I could not do that to myself!!! Fortunately, so far she isn’t eating too much!!! Of course both of them are wondering why there isn’t much food in the house!!!

 So what to do……. I really want to WIN!

PRACTICAL APPLICATION:  Here are the Secrets to Coping with Spending Cuts

At one time or another we all need to cut back our spending a bit. Sometimes it is for a time limited period; job loss, unexpected expenses, or some other unforeseen occurrence. Other times, the spending cutbacks need to be more permanent. Regardless of whether you need to cut back a little or a lot, for a short time, or a longer one, HERE ARE SOME WAYS TO COPE.

What not to do:

1. No cold turkey. Just like in dieting, if you cut back too much, you become too deprived and set yourself up for a spending BINGE.
2. Don’t bully your family-they will rebel (Take it from someone who has tried and failed). Enlist their participation and make it beneficial for them as well.
3. Do not spend your leisure time SHOPPING. That’s just stupid, like a dieter visiting a bakery. Reduce the temptation to spend.

What to do in Order to REDUCE SPENDING:

1. Reward yourself and your family with non monetary rewards; time, free activities, & experiences. Who knows, it may even improve your familial relationships.
2. Enjoy the challenge of the game. I happen to be competitive, so being in a COMPETITION makes cutting back on spending FUN! After all, I might WIN. You can adapt this to your own family, or set some goals and compete with yourself.
3. Ask yourself this question, “IS MORE BETTER?” Robin and Dominguez, authors’ of Your Money or Your Life stated, “If you live for having it all, what you have is never enough.”
4. Figure out for yourself when “enough is enough.”
5. Balance, moderation, and small changes lead to big results. Take your spending reduction “one day at a time” (Alcoholics Anonymous). You can do anything for one day.
6. Start today, don’t procrastinate.

What cost cutting strategies work for you? How do you keep motivated to spend smart?

ACTION STEPS:

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.  

1. Write down everything you spend for 1 week.
2. At the end of the week, spend a few minutes looking at those expenses.
3. Ask yourself these questions;  Would I buy it again? Did I get enough pleasure from my spending?
4. Summarize, where can you cut spending without excess pain?

Photo credit: Ourania2005

 

YAKEZIE SHORT CARNIVAL

The Cost of Your Car @ Sustainable Life Blog

Health Care for Kids when you can’t Afford it @ Eliminate  the Muda

How to Overcome the Pitfalls of Zero Based Budgeting @ Wealth Pilgrim 

Learn more personal finance from these excellent bloggers.    

Categories: values, spending

“Car designers are just going to have to come up with an automobile that outlasts the payments.” Erma Bombeck

The great humorist, Erma Bombeck said this in jest many years ago, but…… there is a lot of truth in her humor.  On the contrary, read about someone who isn’t at all concerned about how long his car lasts!

 MAIN TOPIC; A Story that Knocked me Over

I took the car in for maintenance and was relaxing in the waiting room, minding my own business. Before I realized it, I was chatting with one of the auto shop workers. I mentioned that I read  an article by Joe Plemon at Personal Finance by the Book recently which discussed how 200K miles was the new 100K mileage for a car. I expected a car shop worker to agree with that comment and back up my enthusiasm for the concept of keeping a car for 200K miles.

The worker at the auto shop mentioned that it didn’t really matter to him, because he traded his car in every 2 years or so because he likes to drive new cars.

I couldn’t keep my mouth shut! I began lecturing him about how he would be saving lots more money if he held his cars longer.

He had the PERFECT response to me: “I like driving a new car. I don’t go on vacations, buy expensive electronics, or live extravagantly. As a matter of fact, my condo is totally paid off.”

That totally SHUT ME UP.

This man was living his values.

He wasn’t trading in his car every 2 years because he was financially ignorant, but because he valued driving a new car and was willing to sacrifice other things in his life to drive a new car!

Who am I to argue with that?

I don’t know whether he went through a goals or values analysis and deliberately thought through his whole spending process. But, he is a wonderful example of living in accord with your own principles.

In sum, he works at an auto shop (in a dealership), so he can get a good price on his cars and maintenance. He paid off his home. And he professes not to take fancy vacations or spend lavishly! Who am I to disagree with someone else’s values?

PRACTICAL APPLIATION; What does it Mean to Live in Accord with your Values?

Living well is not always obvious from the outside. Don’t make the mistake that I did and judge someone by where they work, what they do, what they own, or any outside criteria.

Think about this: What do you really want in life? What is important to you? And what are you willing to trade for living in line with your own values?

Think about which of the following is really important to you?

• Lovely vacations
• Beautiful clothing
• Spare time to fish
• An expensive TV/Cable package
• An iphone and/or an ipad
• Expensive electronics
• Eating at fancy restaurants
• Buying original art
• Kayaking
• Camping and hiking
• Going to sporting events
• Hanging out with family and friends
• Add your own interests___________

There’s no right or wrong answer. Spend your valuable time and money on what counts for you! And don’t assume you know what anyone else considers important!

ACTION STEP

Get a notebook and label it: “(your name) Personal Finance” and keep it by the computer. Use it to keep all of your personal finance goals, thoughts, activities, and plans.

1. Play the Prosperity Game  to find out what you REALLY want. It goes like this, day one you get one hundred virtual dollars. You must spend it all (no giving it away). On day two, double the amount and spend it all. Continue for 30 days.
2. Jot down what you learned about your “wants” from this exercise. You may be surprised.

Photo courtesy of  Cars-photos.com  

Related Posts you Might Enjoy:

Are the Wealthy Really Happier?

How Television can Save you Money

Do you Need a Rolex Watch?

Why I’m Wealthy and my House is Dusty  

Yakezie Short Carnival: Candian ETF’s @ Canadian Finance Blog;  Slash your Monthly Car Payments in 10 Minutes @ Car Negotiation Coach-Find the Best Car Price;  3 Tips for a Couples Budget @ Financially Poor