Saving Money

Free Home Phone with Google Hangouts

Free Home Phone with Google HangoutsWith our kids getting older we felt we needed a home phone. Being who I am I wanted a free home phone.  We don’t want a landline , but we don’t want to buy cell phones for our kids either.

We thought about adding another line to our Ting.com plan.  That would only cost us $6 a month plus usage.  Then I realized I could get a free home phone.

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What’s good on paper is not always what is best for you.

Personal finance is a strange space.  The people who are really into it are normally numbers people. They are really good at working out the numbers to find the one right way to do things.  Every personal finance writer knows the right way to create a budget, the right amounts for an emergency account, and the right order to pay off your debt.  The problem is all those things that look good on paper don’t work in real life nearly as well.

For example, there is a debate that rages among personal finance geeks over whether you should pay off your highest interest rate debt or your lowest balance debt firststruggle.  The logic being that paying off the higher interest rate saves you interest in the long run, but paying off the lower balance builds emotional momentum.  Most PF people including myself will argue for the mathematical advantage of paying off the higher interest rate.  But, if you never get over that first hump and give up along the way it doesn’t matter if it is mathematically advantageous; doing it inefficiently is still better than not doing it at all.

I think it is also best to give yourself a raise and reduce your tax return at the end of the year.  After all I am sure you can use that money better than the government can.  There is no reason to give them an interest free loan all year.  Or is there?  If you are the kind of person who may not use the extra money wisely and the only way you can save money is by forcing yourself to do it through your tax return, then it is the right thing for your; even if it isn’t mathematically (or politically) the best.

Personal finance is personal.  Just because it is good on paper or in theory does not mean it is the best thing for you.  As you begin your own personal finance journey don’t assume your life has to fit into the mold of anyone.  Try what ever you need to do in order to be successful.  That may mean throwing out the rules we personal finance geeks write.  It may mean doing it your own way, and if you are successful you win.

 

Image by superfantastic

Good Guy Discount

Good guy discountThis goes along with other articles I have written about negotiation.  This American Life had a act in one of their shows where a man discussed is “Good guy discount.”  I have always loved the concept he discussed, but this gave me a great method to ask for a discount without coming off like a jerk.

I ask for the “Good guy” discount.  It has worked 100% of the time so far.  Granted I have only tried it twice, but that doesn’t change the success rate.

At the Cincinnati aquarium I learned that our local Zoo was no longer part of their reciprocal discount program.  They used to be but had neglected to sign up this year.  So, I said “OK, just give me the good guy discount then.”  The girl behind the glass laughed and asked if I was an alum from any of the local universities.  Which I wasn’t.  Then she moved onto other organizations; she must have gone though 10 or 15 until she finally found a way to give us a 20% discount on our 4 tickets.

Asking for the “Good guy” discount disarms the person you are talking to with humor.  Obviously, they won’t have a “Good guy” discount but I find they will do what they can because you ask.  A lot of places have a plethora of discounts available and even if you don’t qualify for one you may get it just for asking.

Plus as an added bonus you don’t have to feel embarrassed if you are asking for the “Good guy” discount because you can always laugh it off if it gets awkward, but it never hurts to ask.

 

Image courtesy of Cubmundo

9 ways to save money with kids.

Here are 9 great ways to save money with kids.9 easy ways to save money with kids

  1. Create a Babysitting Co-Op No not like those books from such a long time ago but if you and another couple can exchange babysitting services it will give both of you a free night out.  You watch their kids this week they watch yours next week.  Now you can have date night without paying cash for a sitter.  This is great for your marriage as well as your wallet.
  2. Hand me arounds  There is no reason to buy all new clothes for your child, especially when they can only where the same thing for a few months before they grow out of it. When you are done pass them along and find someone else to do the same with. My wife has a Mothers group at church that constantly passes clothes around and saves everyone a ton.
  3. Play at the Public Park Why not just go to the park and play with other kids, you already paid for it.
  4. Watch the local parks for educational programs Take your kids to these and they may have so much fun they won’t even realize they are learning.
  5. Public Libraries There is so much that can be had at public libraries from internet access to the books and learning programs.
  6. Use city services There are plenty of free (already paid for through taxes) activities for children around our city, between Metro parks and libraries there is plenty to keep them entertained.
  7. Watch local churches Especially in the summer there are tons of Vacations Bible Schools for kids’ activities.
  8. Stop spending so much on your kids  Really they want your time and love more than anything. Make up games you can play at home all the time or just play tag.
  9. Buy in bulk and pack your own snacks.  Our kids know if we are gong to the museum or the Zoo they are carrying their own food and we don’t buy it there.  We taught them how much things cost and now our kids see prices and ask “Who would pay for that?”

What are other great ways you save money with your kids?

Everything can be a pre-tax deduction

Pre-tax deductionsA Pre-tax deduction refers to things done the governments preferred way that reduce the amount of income you pay taxes on.  For example if you make $50,000 a year and you put $10,000 into a 401(k) (one of the governments preferred savings methods) then you will only pay taxes on $40,000 a year.  This is a nice way to reduce the amount of taxes you pay at the end of the year and with things like a 401(k) the money is taken out of your paycheck before you see it, so you never even have the contributed money.  Not only does this prevent you from missing a deposit to your retirement it makes your taxes simpler because you employer tells the IRS that you only earned 40,000.

Post tax deductions are things like mortgage interest, IRA deductions etc that are tax deductible, which means (Normally) when you pay $5,000 of mortgage interest you will get the tax you paid on that $5000 back at the end of the year.  This is what we call a tax refund, it is money you over paid to the government throughout the year.  It is like getting change at the grocery store, only you have to wait months and fill out a lot of paperwork to get it.

Both post-tax and pre-tax deductions are tax deductible, which means you do not have to pay taxes on them.  The difference is that you don’t get all of your money from post-tax deductions up front.  The government still taxes the money and then gives it back to you when you file your taxes.  Maybe you don’t mind giving Uncle Sam an interest free loan or think he can spend your money better than you can but I don’t think so.

When I moved to my new job recently I was disappointed to learn that they did not do a matching 401(k) contribution.  In order to make up for my disappointment they offered me a signing bonus (read onetime bonus) I asked for that money as part of my salary(so I could have it every year), which they were happy to do. (Always negotiate your salary and benefits)  I had intended to roll over my old 401(k) to the new one for my company, but instead decided to roll it into a traditional IRA with my old friends over at Fisherwealth. (To the best of my knowledge no relation, but we have done business together for years).  I can now take the money I negotiated and deposit it to my new IRA.   But, what am I to do about the money being a post-tax deduction?  I am being taxed on that money even though it is tax deductible.

This is when I realized that if you know how things work you can make almost anything a pre-tax deduction.  When I started my new job they asked me to fill out a form to determine how much money the federal and state governments should take out of my income every paycheck.  To pay my taxes.  Now this isn’t a nice simple form like take out $100 per check, no it is a complicated formula so you most people don’t realize what is going on.  But, as I have written about here, you can get your tax refund all year long by filling out this form properly.

This way all your tax deductible expenses including your child credits etc, can be pre-tax.  The IRS has a handy little calculator to determine how to eliminate your federal refund and get the most out of your paycheck.  It is here if you want to check it  out.

Do you prefer to get a big refund or a bigger paycheck?

Image by irsein

Tracking Spending And Tracking Calories Are The Same In The End

Weighing decisionsOK before those of you who know me go all “What do you know about dieting skinny boy?”  Let me say a few things.  My wife wanted to change some things about the way she ate and the hardest part of it in the past was the fact that she did it alone, so I decided to do it with her, because I love my wife and maybe because I need it as well.  I have been blessed with the metabolism of a humming bird, I could eat fast food every day for a month and almost lose weight.  Or at least I could have before I turned 30.

Now, my body is turning against me.  I have what I call a programmers belly ( I don’t drink beer) and I wanted to support my wife so I signed up for myfitnesspal so we could both track our workouts and our calories.  She said that just having me like her updates on there was encouraging, and I love to help her so there you go.

Now, I am a data geek.  I do data analysis for a living and I love Excel and number crunching so this was  dream for me.  I am able to see everything I ate and track all the data with the results.  But, Something strange happened to me as I logged every thing I ate.  I started to notice that I was eating healthier.  I didn’t want to screw up my data, I didn’t want people to see that I went over.  It is a fact that simply recording your actions, what ever they may be, makes you behave differently.  It is called the Hawthorne effect.

This is why I tell people that tracking spending down to the penny will make a difference in how you spend your money.  If you have to write down that you spent $30 in coffee this week you may think twice about it.  Even if I really want a baconator (look it up it is wonderful) I won’t do it because I don’t want to mess up my data, or be out of calories for the day or whatever.  And I don’t want to screw up my budget so I will think twice about all the decisions that I am making with my money.

These types of commitment devices are something we all need to help us achieve the goals we want to achieve.  We make decisions and commitments when we are not emotionally involved and then when our emotions come in and try to convince us to do something crazy we need a good reason not to.

Now the novelty may wear off eventually but for now, I am having fun with it and I am finding myself already not eating as much or even being hungry.  But our kids happened to break our scale so I have no idea if this is even working as far as weight loss goes but I know the theory is sounds

 

Image by Gastonmag

1 Simple Trick to Save Money and Clean up Your Bookshelf – A Paperbackswap Review

Paperbackswap LogoPeople are always looking for different ways to save money and spend less, some of which are very creative.  I am one of those people and a new site I found not only allows me to save money and time, but also helps me keep in line with one of my decluttering rules: For everything that comes into the house I get rid of one.  Paperbackswap allows you to trade your used books for books from other users across the country.

The process is simple

  • You put books you don’t want any more on your list for other members of the site to view.
  • When someone requests a book from you, you send it to them at your expense although you can use Paperbackswap bulk discount if you so choose.
  • You then get a credit that you can use to request a book from the catalog.
  • When you request a book it is sent to you by a member who currently has it listed in their available books.
  • You are free to keep the book as long as you like, when you receive a book it isn’t a loan.  You are under no obligation to put it back on the list, you own it.

Paperbackswap currently lists just fewer than 4.6 million titles in their catalog which is ever changing.  You can even put in a request for a book that isn’t listed yet so you will be in line whenever someone posts it.

The idea was sound, so I had to try it for myself before I could recommend it.  I posted my first 10 books (to get my two free credits) and was shocked at how easy it was; I simply entered the ISBN numbers from the back of the book.  They are fairly particular about the books they accept as far as their quality goes, I like to highlight and make notes in my books occasionally and this isn’t allowed unless it was a text book then there are different rules.

I immediately got a personal message from my personal guide.  I immediately asked “Are you a real person?” I was assured she was although the first message was automated.  So, I do have a personal guide through my swapping needs, always a nice plus to have that kind of help.

Sending my first two books took some time to get used to but it is a very nice process once you understand it.  Paperbackswap has a very nice interface to walk you through sending your books.  If you want to use their best services, however, you will need to buy “PBS money”, which is used on things like postage, but it did make things much easier.  I printed the wrapper complete with postage and a delivery confirmation and wrapped my books

I still need to try just printing the address so I can simply put it in an envelope and send it. Which I think may be my least expensive method.

When I finally received my first book it was in excellent condition and arrived less than a week after I ordered it.  If you choose to do so, Paperbackswap tracks the books every step of the way using the USPS delivery confirmation service.  So, you shouldn’t have to wonder when your book will arrive.

It seems that the books I read are very popular but have a very specific market. So the books I have posted are going as quickly as I post them.

In fact using Paperbackswap‘s ”wish list” you can automatically request a book as soon as it is posted.  Apparently people were wishing for my books because they are flying out my door, it has created a little extra work but you only have to put up the books you are willing to send so the amount of work you have is up to you. However, since I want to read books in this same niche` there are a lot of people wishing for them but not a lot of people posting them.  So, I have some credits stacking up.

It seems if you just want fiction books they seem to be easier to come by than their non-fiction counterparts.

Have you tried it?  Does it sound like something you would try?  Let me know what you thought of the review so I can improve.

This article contains affiliate links.

 

6 Lazy Ways to Increase Savings

I like to be lazy and I like to save money so I have discovered a few easy lazy ways to increase savings rates.

  1. Use direct deposits – One of the foundational lazy ways to increase savings is only deposit what you require to meet your needs into your regular bank account.  This will help to prevent you from spending more than you have budgeted.  It will also prevent lifestyle creep (the tendency to spend more as you make more) because you will not see your raises when you get them, you won’t spend them.
  2. Automate your savings – I use Capital One 360 because it lets you have virtual envelope savings accounts.  I deposit money into my main accoLazy ways to increse savingsunt there and then it is automatically transferred into various savings accounts which are earmarked for various needs like Christmas, Insurance etc.
  3. Automate your investing – For this I use Betterment, money is again automatically transferred every paycheck into long term investment accounts.  I can’t forget to do it.  I would have to make an active decision to stop investing.  It helps keep you goals on track, and you don’t even have to think about it.
  4. Sign up for your 401(k) – Seriously, if you are not taking advantage of your 401(k) and any match your company may give you, start yesterday.  Any money your employer matches is a guaranteed gain.  Why would you turn that down?
  5. Consider a bi-weekly mortgage – If you may half of your mortgage payment every two weeks you will end up making 13 payments a year.  This small change can save you tens of thousands in interest over the course of a mortgage.  it will pay off your 30 year note in 25 years.  Some banks don’t accept partial payments, however, so you need to check with them.
  6. Coin jar – If you use cash at all at the end of the day drop your change in to a jar of some sort, or one of these nifty Coin Sorting Banks.  When you cash it in move the money immediately to savings.

Just a few lazy ways to increase savings.  These  methods will improve the rate you are saving money with only a little up front work on your end.  They pay remarkable dividends down the line.

This article contains affiliate links
Image by 401(K) 2013

5 Easy Ways to Save and Recycle Around the House

There are always people selling products that you can make yourself.  I have found some easy ways to save and recycle around my own garden that you may help you.

A simple trickle watering system is an easy way to save

A simple trickle watering system is an easy way to save money and water.

Plastic Milk Jugs as Watering System — I have used these to help me save time while I water my plants and water more effectively.  I put a few small holes in the bottom of the bottle and fill it with water and then set it at the base of my berry bushes.  The water seeps out slowly allowing the water to sink in and water deeply instead of just on the surface forcing the roots deeper in to the ground for a healthier plant.  If you use just one small hole at the bottom and one at the top it is a great homemade drip irrigation method. You don’t lose water to evaporation like you can with sprinklers and you don’t water where you don’t want plants so weeds have a tougher time growing.

I have also buried half gallon jugs in the ground again with holes poked in the side beside the plant and then filled it up with water and capped it.  The water seeps out slowly again watering the roots of the plants and making for stronger plants.

Homemade Mulch — We have a large mulched area in our back yard and we also had a bad ice storm tear through our area that took down a lot of our trees.  So we rented a chipper and went to town, in just an hour we had a lot of mulch to help cover our garden.  I wouldn’t recommend putting it near the house because of insects but this is at the back of our property.  The money I spent on the chipper was less than the cost to have the waste hauled away, or to buy enough mulch to cover the space.

Compost – If you have houseplants or a garden you probably already know the value of compost, but did you know there are ways to compost that don’t involve large piles of waste and that smell?  There are plenty of plans on the Internet to build a worm compost bin.  Worms eat your food scraps and produce great compost.  I recycled two plastic storage bins to build my compost bin.  As we were cleaning our out our house and eliminating junk we had extra bins.

Plastic Containers — A lot of cold cuts not come in clear plastic containers that are perfect for washing and using again.  In fact they look exactly like a name brand storage container.  Why pay for new plastic storage containers when you already have some in your meat drawer.

Newspaper pots – If you still actually get a newspaper, I pick up a few just for this tip now,  you can make biodegradable seedling pots from them.  Here is a great instruction over at instructables.

7 Stewardship Principles

7 Principles of StewardshipThere are certain stewardship principles that encompass all other tips we can express.  They are not sure fire paths to riches but principles that should guide any Christians view of money.

  1. Be generous first – Deuteronomy 26 calls for a sacrifice of the first fruits of the harvest as a sacrifice.  It is a principle of the Bible to give the first to God and not to wait to give your leftovers.  You will always have money for what you pay first.  People often say they can’t give any money to the Gospel but it is often because they wait until after they have spent it all to think about giving.
  2. Pay yourself second – Similar to #1 you should pay your self second.  If you wait until the end of the month to invest what is left then you will regularly find you have little or nothing left for yourself.
  3. Have a plan for your money – There is an old cliche that says “Failing to plan is, planing to fail.”  I say it this way, “Your money will be spent somehow; you can decide where or let it to chance”  You should create a plan on how all of your money is going to be spent.  That doesn’t mean just when going to the store, but where you will invest it.  Have a plan for all of your money.  Call it a budget, or a plan but you have to know where your money is going.
  4. Don’t leave money on the table – We do it all the time in many ways; here is how to avoid a few of them.  Negotiate on everything.  You never know when it could save you some money.  Make the most of your 401(k), make sure you are getting all the match you can.
  5. Spend less than you make – This should be obvious to anyone not in government but you can’t survive for long spending more money than you bring in.  Eventually those bills will come due.
  6. Have an emergency fund – Start with a baby fund of $1000 or so, because everything thing that goes wrong seem to cost around $1000.  And then move to having 3-6 months of expenses set aside in case you lose your job or have some other financial emergency.
  7. Understand your insurance needs– Insurance can be an important part of your financial plan.  Depending on your situation in life you may need more or less.  Insurance can prevent certain financial disasters.  A cheaper premium may be cheap for a reason, so research before you do business with any company.

These stewardship principles are crucial to getting off on the right foot.  In fact if you were able to stick to all 7 you would be better than 95% of people in America.

image by Dee’lite

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