Monday, March 29, 2010

8 Ways to Reduce Your Electric Bill

  1. CFLs—You can (and probably have) read all about these bulbs across the internet. They save money by burning less power and doing it for longer. Make sure you contact your trash collection or city to find out the proper way to dispose of them though!
  2. Unplug appliances not in use (vampire energy)—Just Google “vampire energy.” If you don’t know what it is, it is sucking the money out of your pocket. Unplug appliances not in use.
  3. Ceiling Fans—Being raised in the Southeast without central heat or air, I know the importance of a ceiling fan. In the summer you can use it to circulate the air. Even warm air is more refreshing when it is moving rather than stagnant. In the winter you can turn it the opposite direction to redirect the hot air that has risen to the ceiling back towards the floor.
  4. Hot Water Heater Blankets or better yet—tankless hot water heaters—We spend a lot of power (electric or gas depending on your set up) to heat water that sits in a tank and waits for us to use it. Buying a water heater blanket can prevent loss of heat from your water heater. Just touch the outside of the water heater. If you can feel warmth, you are losing heat and therefore, paying to heat water that is not even in use yet! Buy a blanket for it at any home improvement store. If you have a little more money to spend, remove it altogether and replace it with an inline or tankless water heater. We have a couple of these at work and they are AMAZING! Instant hot water…very hot hot water.
  5. Turn off the TV—How often is your television on for background noise? While you are reading or on the computer? While you are watching dinner? While you are in another room? If you are specifically sitting down watching a show/movie purposefully, turn it off.
  6. Natural Light/ Turn off the lights!—I always turn off lights when I leave a room. It was something I was taught throughout childhood. It has followed me to adulthood obviously, as it is second nature to me. I also use natural light throughout the day to prevent having to turn on the electrical lights.
  7. Use non-peak hours—Contact your power company and find out if they have peak and non-peak hours. If you use high-energy items, such as a dryer or dishwasher, during off peak hours, you can save on your bill.
  8. Change air filters—Change the AC/return air filters once every 30 days or buy washable ones. The reusable ones are cheap and regardless of what they say, are only good for about 30 days at a time. The dirtier your filters, the harder your unit has to work. So spend a tiny bit more a month and change your filters often.

As a side note, most power companies and co-ops will come out to your house and do an “energy audit” for free. Just call and request a free audit and they can look and suggest other improvements for your specific home

Photo credit: vancanjay

Thursday, March 25, 2010

Introductions...Ninja from Punch Debt in the Face

In this new series of interviews, my plan is to introduce you to bloggers whose stories and/or advice I have enjoyed or found most helpful.

Punch Debt in the Face is a blog that I've been reading for about 3 months now. I really enjoy his take on finances as well as reading about his personal life. And as a bonus, each post comes with its very own original stick figure artwork. I recently spoke with Ninja, the author and illustrator of this blog, about his life, blog, and financial advice:

Me: Please tell my readers a little about your personal life.
Well, I do blog anonymously (out of fear some crazy blog reader will stalk me, cut my skin off, and wear it) I am open to sharing a few things about myself. I'm a 24 year old dude, living in San Diego. I've worked for the federal government as an investigator for a little over two years now. I'm newly engaged, and look forward to my wedding this August. Besides that I love Dr. Pepper, personal finance blogs, playing tennis, and Dove cucumber and green tea body soap. I hate cats (sorry cat lovers), chocolate, and negative people. If you want to know more, check out my "About Me" page.

Me: So why the name "Ninja"?
That is a really good question. One that I don't have the answer to. Ninjas are pretty awesome though and I guess I just wanted to be a little awesome!

Me: You're very financially wise for your age. Where did you learn financial responsibility at such a young age?
Honestly, I learned it from a friend. He is a financial analyst for a major bank and has his stuff together. We had a conversation about compound interest one day and how awesome it is. I don't ever plan to have a uber-high paying job, so I needed to figure out how to get rich on a blue collar salary. I decided to start reading some PF books and blogs. After a few months of taking in all that I could, I figured I wanted to join on the fun and start my own blog that caters to the twenty something crowd.

Me: Being so far "ahead" of other people your age financially, when do you hope/plan to retire and just enjoy the fruits of your savings?
I don't know if I'll ever retire. I'm too darn active to just sit on my butt all day. After all, one can only play so much golf before they want to do something else...right? That said, I would like to have the ability to "retire" at 50. I put retire in quotes because I won't necessarily stop working, I'll just have the ability to do something else, like work part time, or work for a non-profit. I have laid out my plan to being filthy stinkin' rich here.

Me: If only I'd been as knowledgable at your age (but I guess you hear that all of the time).... What advice would you give those younger than you to help them see the importance of getting a good start financially?
Quit waiting for tomorrow. Most of my friends don't contribute to retirement, they don't pay down their debt, and they don't live within a budget. They think that they can wait until "tomorrow" to do that. Sad thing is, tomorrow never comes for them. They keep living outside of their means. When they are 60 years old and realize they only have $20 in their retirement accounts, they will realize the mistake they made. Ask anyone over the age of 40, if they wish they would have saved more when they were 20 and see what they say. The time to get your financial act together was yesterday, yeah that's right yesterday. Quit reading this stinkin' interview and go put some money in your savings account.

Me: Do you consider any debt "good" (or worthwhile) debt?
Umm, I actually wrote a post about this called "Good debt is for dumb people". So to answer your question. No. While I can understand why people would take out student loans to get an education or take on a mortgage to buy a house, I wouldn't call that debt "good". I prefer to think of it as "less bad." I plan to take out a loan when I buy my first house, but I'd be lying if I said I was super excited about taking on hundreds of thousands of dollars of so-called "good" debt. People often forget that a degree does not guarantee a higher income, or that their house will not ALWAYS increase in value. So please don't go in to debt, just because some bank has convinced you school loans/mortgages are good.

Me: Would you consider taking some money from savings (not retirement) and paying a huge chunk of it as a down payment? Living in CA, I doubt you would probably 100% pay for it up front, but was curious how much you'd be willing to put down on a house?
Ya know, I've done a lot of thinking about how much I want to be able to put down when I purchase my first home. I don't really have a set amount or percentage that I will actually put down as that will depend on the market, interest rates, location, etc. Ideally, I'd be have $100K in the bank come time to purchase a home, but I don't know if that means I'd put $10K down or $50k down. One thing is for sure, I don't plan to rent forever.

Me: What is your thinking in keeping student loans while you have enough cash to cover them (even before the engagement!)?
Ah, the student loan dilemma. I have blogged numerous times about this issue. On November 18th, 2009 I finally had the ability to pay my $15K student loans off in full. I outlined why I decided to hold on to the loans for a bit longer in this article. Basically I'm in a period of transition and am waiting for things to settle down a bit more before I deplete the majority of my savings account. In my defense, I would like to mention that, even though I haven't paid the loans off, I have still reduced them greatly. I brought them down over $10,000 last year. Had I paid only minimum payments, I would have only contributed about $2,000 towards them. I have made a resolution to pay them off by the end of the calendar year.

Me: I love reading the various topics (including, but not limited to financial topics) on your blog. What topics usually get the most feedback on your blog?
I've found that I tend to get the most feedback when I come up with an article that everyone can contribute to. I wrote an article asking people to share their Financial Secrets and it was wildly popular. People also seem to enjoy when I rant about something like my honeymoon or the role of men and women in a relationship. Stirring a little personal finance controversy definitely gets people to chime in with their two cents. People don't really respond when I write about investing, saving, or debt. Nope, they want my engagement story or why I think being a girl is worst than being a boy (financially speaking of course).

Me: Congrats on the engagement! What is your biggest fear about combining finances with Girl Ninja when you two are married?
For those that don't know, Girl Ninja is my fiance. I honestly am not scared at all about combining my finances with her. In fact, I can't wait. She is debt free which is super sexy. She is a teacher and makes a decent living. I'll be 25, she will be 23 when we marry. Our combined income will be between $80,000 and $100,000 (depending on if she gets a teaching contract). I'm pretty excited about sharing all of my life with her, including my money. She wouldn't be debt free if she had bad spending habits, so I have nothing to worry about.

Me: Who are your favorite bloggers to read?
I basically read any personal finance blog I can find. I don't have a favorite as enjoy reading multiple points of view. Before I started my blog though, I was consistently reading Budgets Are Sexy and The Simple Dollar. If you (the reader) have a personal finance blog, drop me a line 'cause I would love to check it out.

You can find Ninja and his artwork over at his blog, Punch Debt in the Face or on Twitter at @punchdebt. Go pay him a visit. You will be entertained by his writing and his commenters (including his mom, Mom Ninja). If you're really smart, you'll add him to your blogroll, reader, or however you keep up with the blogs you read. Personal finance really is fun around his site.

Monday, March 22, 2010

8 Friends to Have

  1. Mom Figure—Someone who has “been there.” Someone who mothers you at times. Someone who offers advice not from formal education, but from life experience. Maybe it actually is your mother, but maybe it isn’t. Either way, she’s invaluable.
  2. Someone from Childhood—It’s nice to have a friend who has known you “all your life.” Seriously…someone to remember the good ole’ days with. Someone who can giggle over silly memories with. Someone who understands why you once were in love with the school jock. Someone who used to braid your hair. Someone who was with you when you got your first speeding ticket. Someone who celebrated when you got your driver’s license. It’s nice to have someone who truly knows where you’ve come from.
  3. Someone just like you—You need someone to agree with you. You need someone to let you know that you’re not crazy (at least not by yourself). You need someone to validate your feelings. You need a friends who is on the same page as you.
  4. Someone who is your polar opposite—But you also need someone to challenge you. You need someone who doesn’t enable you. You need someone who gives you new perspective. You need someone with a different viewpoint. You need someone who isn’t afraid to argue with you.
  5. Mentor—It’s wonderful to have someone to look up to. To see someone who is in a position that you would like to be in one day. You can emulate them. You can question them about their successes and failures. You can find out how they came to be who/where they are. You can learn so much from them!
  6. Mentee—It’s humbling and self-esteem building to have someone look at you as you look up to your mentor. You can teach them, as teaching often makes us better learners. You can influence them. You can watch them grow. They can bring new perspective and ideas when you are set in your ways. They can question your motives and provide insight just out of their curiosity.
  7. Accountability Partner—You need someone that will hold you to your own beliefs. You need someone who is not afraid to hold you accountable for your actions. You need someone who knows your weaknesses and can coach you through them. You need someone who is firm, yet non-judgmental. You need someone who will tell you the truth when you lie to yourself.
  8. Neighbor—Sometimes you don’t even have to know them well. Sometimes it is good just to have someone to shoot the breeze with. It’s okay to have someone to just talk the surface things with (as long as that is not what ALL of your acquaintances are). It’s good to have someone you can share your tools with. It’s good to have someone that has nothing in common with you but a property line. You can learn from one another, as you likely came from different walks of life. You need someone close who knows you and your routines in case something is someday awry, someone will notice. You need someone to smile at you as you pull into your driveway or speak to you as you get the mail. You need a neighbor.

Photo credit: lhumble

Thursday, March 18, 2010

Introductions...Brad Chaffee from Enemy of Debt

In this new series of interviews, my plan is to introduce you to bloggers whose stories and/or advice I have enjoyed or found most helpful.

One of the blogs that I have really enjoyed reading recently is
Enemy of Debt. I recently spoke with Brad Chaffee, the brains behind this blog, about his life, blog, and his financial advice. This is how it went down:

Me: Please tell my readers a little about your personal life.
Brad: I'm a 35 year old husband and father of three beautiful children. I recently quit my job so that I could be a SAHD/WAHD and work on starting my financial counseling business. I love being a father and take every chance I can to spend time with my kids. We are also debt free (except for the house), after paying off just over $26k of debt in 20 months.

Me: How awesome to be debt free! What inspired you personally to get out of debt?
Brad: One man inspired me, but what he really did was help us understand why it was so important to get out of debt. It all started with Dave Ramsey's book The Total Money Makeover. The book just made complete sense and made us feel like we could do it after all. after that Financial Peace University kept us motivated and taught us a lot about ourselves in the process. It was the very best decision we have ever made and THE only New Years Resolution we ever completed.

Me: That book was our inspiration to really ramp up our efforts as well. Do you still read/listen to Dave Ramsey to stay on track or are you pretty self-motivated now?
Brad: Actually I do. I have his audio book The Total Money Makeover, and I listen to it regularly, but the main thing is I coordinate and lead Financial Peace University at my church. When you throw my God given passion, those classes, and my wonderful readers into the mix, it definitely helps me to stay motivated. That's not to say I do not have my occasional mishaps, because I do, but they tend to be more controlled these days. ;)

Me: What was the biggest change in your life that made getting out of debt possible?
Intensity and focus made it possible but first we had to address the very problem that caused us to be where we were at the time. Our behaviors needed to change, and once we did that, it was all she wrote. We started a budget, stopped borrowing money, sold our "stuff", and became intensely focused on saving money and paying off our debt. We learned a lot about contentment during that time, which was what gave us the strength to get rid of our beloved "stuff".

Me: Clutter is such a stress for me. Do you find your home (and life) less cluttered now after selling all your "stuff" and better evaluating purchases?
Brad: Well, we did sell all of our expensive stuff but the rest of the clutter we have, we just now started to get rid of. Just like with our debt, it took us a while to realize we were collectors of stuff, even if it was cheap stuff. The problem for us isn't buying a lot of things anymore, as much as it is not getting rid of the things once they lose their usefulness. Baby clothes, toddler clothes, our clothes, you name it, we had extras. We are seeking to become minimalist in every way, even if it is not to the extreme of others. I'm looking forward to it.

Me: What was the most extreme measure that you and your wife took in paying off debt?
Brad: We sold everything we could! Our car, big screen tv, my XBOX 360, and anything else we could get our hands on. Probably the most extreme thing, at least in most people's eyes was that we did not go on vacation, buy each other gifts, and we cut up the credit cards for good. This year was the first time we bought each other birthday presents in 2 years. We made them good ones too, because we earned them. The sacrifice was worth it!

Me: Did people think you had lost your mind? Did you find any unexpected support in the process?
Brad: I of course had my non-believers, but for the most part they were co-workers and friends. My boss for example said he didn't need a Total Money Makeover at first, but after hearing me tirelessly rant about it, he became convinced he was wrong. Now he's paying off debt like a champion. Best part is, he's getting married soon, and him and his fiancee are on the same page. I have more than a hunch, that they will end being very successful in life. I'm very proud of them both!

There were people that said I was crazy for cutting up my credit cards to never borrow again, and I did receive some emotionally confused looks from others during that process. My dad for instance said that you just can't live without a car payment, or credit cards. He's of course got the mindset that he "is" his credit score. I'm financially responsible and I use cash, but my credit score is not calculable. I'll live. :)

Me: What is your personal spending weakness?
Brad: It used to be video games, electronics, books and eating out. Since becoming debt free we have slipped a little in the eating out department but we are still maintaining our plan to save our Fully Funded Emergency Fund of $15,000 by the end of 2010. We are almost half way there already so we should reach that goal. We ask ourselves a lot more questions before we buy anything these days. Do we need it? Can we wait? How will it affect our plan if we buy it?

Me: Those are all great questions for any purchases. What did you find to motivate you when you got sick of living meagerly in order to knock out your debt?
Brad: We took a break for one month. All the money we could have thrown at our debt snowball went to doing something nice. we took a small weekend trip to Washington D.C. (Free zoo, and museums made that trip nicer, but we still spent a pretty penny on hotels. was it worth it? Absolutely! We were refreshed and ready to get back on the train when we returned to the plan the following month. I would say that month saved us because we were close to getting burned out. Usually when that happens to people they never return, so I recommend a ONE MONTH break. Then it's back to business!

Me: Taking a month off is a great tip...especially if it is going to be a long haul. I would expect that it takes a lot of discipline to get back rolling though.
Brad: You can't just take a month off and go wild, there still needs to be self control and the understanding that you still have goals. Spend a few hundred dollars on a 2-3 day trip somewhere, enjoy yourself and get back to it. I would be very careful when putting a specific time frame on it though because then it makes your attempt to get back on more challenging. I say just be realistic. when I talk about taking a month off I just mean for you to take a month's worth debt repayment money, and spend it on some frugal family fun. We didn't spend quite all of our debt snowball for that month, but we did blow about $500.

Me: What inspires you to want to help others become debt free?
Brad: Hope! I want to inspire and motivate people to find the hope that being in debt steals from people. That hope is hard to find when you have tons of debt, no savings, and someone waiting for your each and every one of your paychecks. Debt has a funny way of making you believe you cannot do better for yourself. Inspiring people to become debt free is my passion and my purpose, and I intend on changing lives a little each day.

Me: What an awesome goal. What is your favorite success story that has been shared with you?
Brad: There really is not one single story that stands out the most, because to me success no matter what, is something to celebrate. But I would have to say that the best debt free stories are the ones where the person loved debt, credit cards, and everything else that made them broke, only to do a complete turn-around after realizing they were doing it wrong. The stubborn ones make for the best stories!!

Me: Now we want to know what you are reading. Who are your favorite bloggers to read?
I enjoy reading Budgets Are Sexy, Punch Debt in the Face, Deliver Away Debt, Out of Your Rut, and Engaged Marriage. Those are the ones I most consistently read each week, but there are tons more I make sure to check up on from time to time. .

You can find Brad anytime at his blog, Enemy of Debt. He also contributes to the Self Reliance Exchange and can create some custom graphics for you at Logos4You. Go pay him a visit. Better yet...add him to your blogroll, reader, or however you keep up with the blogs you read. I guarantee that you'll learn something while you're there.

Thanks again, Brad! I'll be there (debt free) with you one day...soon!

Monday, March 15, 2010

8 Ways to Save Money on Baby

  1. Don’t buy the gadgets/bottles/pacifiers until they are born—You have no idea what they are going to like. Wait and see if they take a pacifier. See what type of bottle works for them, see if you will actually use the gadget.
  2. Breastfeed—This saves a LOT of money just on food. You can spend anywhere from $25-$60 a week on powdered formula. Breastfeeding eliminates this need. Even if you are a working mom as I am. The purchase of a $250 pump has paid for itself in just 2 months or so when weighing it against the cost of formula. Breastfed babies also do not get sick as often, so you might be saving big on doctor’s visits as well!
  3. Don’t Overbuy Clothes/Take Hand-me Downs/Leave Tags On—For clothing, do not overbuy. I know they are cute. But both of our children have had clothes that they never wore because they grow SO FAST when they are tiny! That’s why there are six possible sizes of clothing before they are 1 year old! Take any hand-me-downs you are offered. Even if they are stained or look “loved,” you will need those types of clothes for your child as well, so take them. We have saved HUNDREDS if not thousands of dollars because we have family and friends that gives us lots of hand-me-downs. Leave the tags on when you do buy or someone gifts them to you. You can return them. I promise.
  4. Request Samples—We have an entire can of formula in our pantry in case we even need it for Abigail. It’s a retail value of $30. We paid nothing. It was a free sample. You can also get lots of diaper rash cream, lotion, shampoo, diapers, etc for free just by requesting them. Signing up for some baby clubs online who send out loads of free samples. Take the samples offered from most hospitals in a free diaper bag (usually with the name of a major formula maker on it somewhere). Just google “Free baby samples.” You’ll get more than you bargained for.
  5. Buy gender-neutral items—This helps greatly if you end up having more children later. You can always reuse clothes, toys, bedding, blankets, etc if they are not too gender specific with the first one!
  6. Ignore Baby Registry Suggestions—Don’t depend on a store to tell you what to register for…they are trying to sell you things, remember? Get the bare minimum. The rest you will figure out if you need later.
  7. Freecycle—Join your local freecycle (google it). There are people just wanting to give stuff away to avoid the hassle of trying to sell it. You also can ask for baby items on there. You’d be amazed what people are willing to part with once they know someone else needs it!
  8. Swap Childcare with Friends—You keep all the kids one night. They keep all the kids one night. You both get a night out, you both get free childcare, and both sets of kids get a playdate.

Bonus: If you can spend money to save, buy lifetime furniture—Yes, it is a bigger investment up front, but both of our children have “lifetime” furniture. Their cribs become toddler beds, then they can become daybeds. Or we can skip right to a full-size bed. All with just adding a rail that you can purchase with the bed. Easy. The changing table is actually a full-sized dresser. This is furniture that they can take with them to college. We’re done.

Photo credit: nbphotogfy

Monday, March 8, 2010

8 Items to Carry in Your Wallet

  1. Identification—Whatever picture ID you have needs to be on you at all times. For so many reasons. This is a no-brainer.
  2. Insurance Cards (Auto/Medical)—You need all insurance info on you as well. Usually when you need this information it is not a “let me run home and get it” situation. Be prepared.
  3. Cash—For emergencies. Although it is rare to come upon some place that does not take a credit or debit card, they do still exist.
  4. Credit Card—For emergencies that your cash or possibly your bank account cannot handle.
  5. Blood Donor Card—This is great to have on hand so a hospital knows your blood type. Don’t make them use of the “universal” supply when you could get the stuff that matches you exactly. Leave the universal stuff to someone who is actually unknown.
  6. Medical Emergency Info—Do you have some type of disease or disorder that might need to be known in an emergency if you were not able to communicate this? Diabetes, allergies, epilepsy, heart disease, etc…so many things could go wrong if medics are not aware of existing conditions.
  7. AAA Card—Whether a belt broke, you ran out of gas, or you have a flat, make sure you have someone to call that can help. Also helps to have when checking into a hotel, renting a car, or dining in some restaurants.
  8. Family Photos—I’ve read that a wallet is more likely to be returned if it has family photos in it. And who doesn’t want to stare at their loved ones from time to time. I don’t know a single parent who doesn’t like to brag on little Timmy. Might as well have a picture to go along with the story.
Photo credit: lusi

Wednesday, March 3, 2010

WFMW - Need Financial Opinion this may be the wrong forum in which to ask this, but I'm going to anyway.

I need as many opinions as I can gather on a personal financial decision.

Chip and I are undergoing a Total Money Makeover via Dave Ramsey's book of the same title. We have made a lot of headway on our debt (see tomorrow's update if you want to celebrate with us), but still have a way a go.

We have our baby emergency fund of $1000 in place.

We are knee deep in paying off our debt. We have tackled two smaller credit cards and eliminated them from our lives (happy dance!). We are about to pay off some medical debt and start in on one of our two remaining credit cards...both of which are enormous, I'm ashamed to say.

So part of Ramsey's teachings are that all retirement contributions should stop until debt is paid off. I currently contribute the equivalent of $450 a month into my 401k at work which is matched at 50% (in other words...along with my $450, work will put in $225 for me). I'm 30 years old, so this has a LOT of time to grow still.

We estimate that we can have our debt paid off in approximately 1 year at the rate we are planning to move. We hope to make it sooner, but 1 year is aggressively realistic.

I get that once we are debt free I can contribute even MORE to my 401k (which will pick up again as soon as debt is gone), and therefore get more matched, but the thought of losing 1 year of contributions makes me wary.

What would you do? Would you throw that $450 a month at the debt and knock it out more quickly or would you leave it alone and use what you have now in take-home pay to knock out debt while continuing to fund retirement? Am I just being too careful or am I being smart to want to keep funding retirement?

Asking for help will hopefully work for me. If you want to see what works for everyone else, head over to Rocks in my Dryer, who is guest hosting this week!

Monday, March 1, 2010

8 Ways to Prepare for the Worst

Welcome new comers via the Carnival of Personal Finance. Please feel free to kick off your shoes and stay a while if you would like. For my regular readers, please go check out some other great posts at Four Pillars' posting of the Carnival.

  1. Set up Life Insurance—Talk with your spouse and insurance agent and decide what you want it to cover. Do you want to set them up for life? Do you want them to be able to just pay off the debts? Do you want them to be covered until retirement age? You decide and purchase a policy that works for your budget and your needs.
  2. Will—This is vitally important…especially if you have children. Don’t have your children be wards of the state until everything can be sorted out. Have this in place to know how your possessions will be handled in an untimely demise. Most people don’t get a chance to plan their death.
  3. Living Will—Decide if you want a living will and get that set up if you do. Don’t make your family make this decision for you, as the result could lay heavy upon them for the rest of their lives.
  4. Power of Attorney—Decide who is authorized to make decisions for you and your estate if you are incapacitated in any way.
  5. Executor of estate—Someone needs to make sure business is taken care of properly when you aren’t around to see that it is.
  6. Guardianship for Children—Who do you trust to raise your children? Who has the means? Whose parenting style do you appreciate? Who is willing to take on the responsibility? This is not a decision to be taken lightly.
  7. Share Banking/Account Info—Make sure you share your account information with your spouse. If you are suddenly not able to make decisions about banking, bills, or accounts, make sure they are educated in how and what to do.
  8. Decide who controls children’s inheritance—Who controls the money you leave behind if the children are minors? This may or may not be the job of the person who gets guardianship. That is up to you and your spouse. Choose wisely.