Archive for the ‘Uncategorized’ Category

Save to the Future Update

For the past two weeks updates have been slow to none.  I want to apologize to all the readers, but unfortunately my work schedule has made it difficult to sit in front of the computer and type.  It looks like I will be able to get back in two writing at least 3 articles a week again.  Thanks again for your support and readership.


Carnival of Financial Planning-May 24 2008 Edition

The Skilled Investor has just published a carnival with great posts from all over the web.  Make sure to check them out.

He was also kind enough to include my previous post:  To Commute or Not Commute.  I discuss how commuting can affect your pocket book, your health, and your personal life.

Top Money Pitfalls

Back in 2007, I started my crusade on becoming better informed in the world of personal financing.  As I began to read personal finance books, I started to notice that many of this authors had different ideas and solutions for retirement, savings, spending etc.  At the same time though, you can still find many similarities.  Here are some of the four most common mistakes people can make financially:

  • Car payments.  In my opinion, this is one of the biggest money pitfalls people can fall into.  Usually, this becomes the largest monthly expense an individual has other than their house payment.  Imagine what you could invest your money in if you didn’t have to give $300 a month($3600 a year) to a car that is depreciating every time you drive it.  Instead of spending money on a new car, your best bet is to save cash and buy a reliable used car.
  • Rent/House payments.  Many people make the mistake of getting”too much house”.  What I mean by that is that they buy a house that they really can’t afford (Hmm sounds like mortgage crisis).  Basic rule of thumb is that your house payment shouldn’t be any more than 1/4 of your take home pay.
  • Not Saving Long Term.  Start saving now!  It is never too early or too late to start investing in your future.  The power of compound interest is in our sides, especially for those starting off early.  If you don’t have any car payments, you have a reasonable house payment, and you are watching your spending, there should be no reason why you are not saving a little a very month for your future.
  • Not Budgeting.  Having an understanding and a plan of where your money is going is considered one of the simplest, yet most important things you can do with your finances.  It doesn’t matter if you do it monthly or yearly, with software or by pen and paper, the important thing is that you do it.

Knowing what mistakes to avoid financially is very important when trying to gain your financial freedom.  Many times we are told what we need to do to reach our goals, just remember to watch out for those pitfalls that might occur around the way.

I’m curious of finding out what do you consider to be money pitfalls?  Do you agree with the ones I’ve chosen?  How can you avoid them? 

The Little Redbox

Me and my fiancee are big movie watchers. We don’t like going to the movie theatre due to the bad customer service, annoying movie watchers, and more importantly the cost. Going to the local Blockbuster is not that cheap either. We had started using the local library which has been great. You just can’t beat the unveliable price of free. But there is a problem. The movies in our library are not the most recent movies out. So if there is a certain new movie we want to see, we are out of luck. Not if you use a Redbox kiosk.

Redbox kiosks are popping all over the place. You probably have seen it around McDonald’s or a grocery store. They are basically vending machines for movies. You swipe a credit/debit card, enter your pin if you have one, zip code and email address(optional) and you are ready to rent a movie.

Quick info:

  • The price is $1.00 plus tax for a 1 day rental
  • You are charged an additional $1.00 for every day extra
  • The rental period ends the following evening at 9pm
  • Redbox focus mostly on new dvd releases
  • Only regular DVDs. No Blue Ray or High Def.

At Friday, I drove to the McDonald’s by my house, rented two movies for a whopping $2.00 and enjoyed a relaxing movie night at home. Sure beats spending $20 for two at the movies or $10 at blockbuster. And if $1.00 still sounds like too much money. Go to Redbox and sign up for a free rental. If you search around the web, you will find many of this free rental promo codes passing around. (I have only tried using the promo code you get directly from Redbox).

A note of caution: While researching Redbox I stumbled around this article talking about possible identity theft in Redbox kiosks. just like going to an atm, watch your surroundings. If anything looks suspicious, stop and go somewhere else. Better to be safe than sorry.

The 151st Edition of the Carnival of Personal Finance

As I try to increase my readership, I have begun entering posts into blog carnivals. The latest entry I have given is Money Management in Marriage.

Here is the link to where my post is being showcased:

The 151st Edition of the Carnival of Personal Finance hosted by Kimberly Palmer at Alpha Consumer.

I have been given the editors choice, which I feel very honored for getting.  In the mean time, take a look at some of the other great articles that are been showcased.

The Simplest Guide to a 401K-Part 2

Here are some details one should know about a 401K:

  • In 2008, there is a limit of $15000 that an employee can put into his 401k account. This is a before-tax amount. For example, say you earn $50,000 a year. You can therefore allocate $15000 from this 50,000 and put it into the 401k account. What’s your taxable income? $50,000 – $15000 = $35000
  • Every year after you initially contribute an amount, you are allowed $500 more per year. This accounts for inflation.
  • Employees who are over 50 years old are allowed what’s called “catch-up contributions.” On top of the original $15000, >50 years old employees can allocate an additional $5000 per year into their 401k accounts.
  • This $5000 is also subject to an increase of $500 per year (to account for inflation).
  • If you contribute more than the set limit ($15000), the excess amount must be withdrawn by April of the following year. If you do not do so, you will have to pay a certain penalty as well as taxes on the excess amount.

 Please let me know if I missed any information or if something might be wrong.

Here is the link to part 1 of this topic:  The Simplest Guide to a 401K-Part 1


Frugality:Dating and Money

As one tries to start to embrace the frugal lifestyle, one of the questions that I get is “how can I go out in a date and not look cheap?”. At a glance, it can be hard finding places and activities that won’t hurt your pocket book. A movie and a dinner date can be somewhat expensive. On average, going to the cinema for two in the afternoon will cost you about $19. If you want popcorn and a couple of drinks that would be another $15. Later that night you go out to a restaurant. I’m not talking a five start restaurant-just a regular chain restaurant. That will be a minimum of another $25 dollars. Total=$59.

Now, if you are doing well financially, this wouldn’t be too much of a problem. But remember that if the date goes well, you will probably go out on a second, and maybe a third. Little by little, it will start adding up to a higher cost. If you are starting to pay of your debt, this could really tighten your pocket book and might cause a possible set back with your financial plans. Here are some ideas one should use when dating:

  • Budget. Look at how much you can actually spend when you go out on a date, and make sure you stick to the figure you came up with. I suggest adding a little more than what you think you are going to spend. This will give you some wiggle room for unexpected expenses.
  • Customize your date with her interests. If you know some of the things he/she likes before you go out on a date, make it tailored to her. Maybe he/she likes reading-take her to a book fair. Likes to travel-check to see if there is a cultural festival going on. Think outside the box when planning. Also, make sure to check that pricing is reasonable.
  • Have a dinner at home. We know that eating at home will always be cheaper than eating at a restaurant. Plus, you can show her your culinary skills. If this is a first date, she might not feel comfortable coming over to your home. Tell her to bring a friend over. Just make sure not to burn the food.
  • Discover your city or town. Here at Houston, we have many different festivals going on all the time. Reading your local newspaper will give you great places to go without breaking the bank to do so. My fiancee Crystal and l do this all the time. We get to go to new places, meet interesting people, eat cheep but good food, and best of all the entrance is usually free
  • Know your museums and zoo. If both of you like animals and/or museums, why not go on a date to one of these places? Usually these institutions run specials throughout the week. Learn when they are and take advantage of them.
  • Be honest. At some point, let the person know your financial plans. They don’t need to know the details. Just that at this point in your life you are trying to take control of your finances.

Dating can be awkward at times, specially in the beginning. Money can be a touchy subject to talk about. During the time that you get to know that person, the subject will probably come up. As I mentioned before, be honest with them. If you two are becoming more and more in sync, she will most likely understand your opinion. This does not mean that you should try and convince her that your way of thinking is right. Her opinion about handling money could be way different than yours. Just remember that dating is the time when you get to learn more about a person. Don’t let money get in the way.

Dealing With The High Cost of Food

It feels like Murphy’s Law is kicking in full effect and the cost of food has taking it’s beating. Basic food products such as rice and pasta have almost doubled in the past year. Corn and sugar have also seeing substantial increases. Most of our food has seen some type of upward price change and it is starting to affect our pocket books. What is the cause of this? Well, a little of everything. According to Katherine Corcoran with the Boston Globe the rise in the cost of food is a combination of things.

“Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves, and growing consumer demand in China and India.”

Kimberly Palmer with U.S. News offers 6 great tips to eat better for less:

  1. Plan ahead. Planning your meals for the week can make it easier when grocery shopping. Remember that some of the ingredients you buy can be used for tons of different recipes. The more you cook from scratch the more money you will usually save.
  2. Do it yourself. Instead of buying things that are pre-made, start making them yourself. The best example would be buying grated cheese. Why not buy a block a cheese which will be cheaper and grated at home. How about making your own mayonnaise. Not only will you save a little cash, but you can add some flavor of your own to some of your creations that you can’t do if it’s already made.
  3. Rediscover eggs and beans. Eggs and beans are extremely versatile food staples. Not only that, they are still relatively cheap compared with meat. How about a quiche, or some beans and rice. A dinner for two of this will run you about $5 to make.
  4. Go meatless. Not spending money on meat can substantially save you money while helping promote a healthier lifestyle. Just remember to include protein in your diet in some other form. I don’t think I could do this 100% but I could trim down my meat intake.
  5. Leftovers. I love them. Remember that you can take them to work, eat them the next night, or use them to create a new meal. Left over ground meat from hamburger night-use it for spaghetti night.
  6. Use what’s on the fridge. How many times do we look in the fridge and say “there’s nothing in here”. Look again. Get creative with your ingredients. Look in the Internet for ideas and you will find that you have way more dish choices than you thought. I recommend using FoodNetwork or AllRecipes for ideas on what to make with the ingredients you have at home.

Food prices are expecteted to stabilize in the future. Unfortunately the prices will not go down. Adjusting our budget and our lifestyles will help us combat the rising food prices. What are some ways that you save on food?