The latest Personal Finance Carnival was posted yesterday at The Financial Blogger. These are just a few of my favorite posts from the carnival. Stop by The Financial Blogger and find your favorites.
Get Rich Slowly says that it is more important to be happy than it is to be rich. I so agree with this statement. I also believe that if we were happier with what we have it would be easier to save money. I try to spend some time each day thinking about all the things that I am thankful for and when I think about it, I am thankful for quite a bit.
J at Budgets Are Sexy writes about left over money. He is pretty candid about what he used to do in a financial crisis. Do you even know if you have any left over money?? Do you know what you spend your money on?
Building Credit Without Credit Cards is another one of my favorites because I often hear that used as an excuse to get credit cards. It’s wrong. You can also get a small personal loan at your local bank. Make the payments on time and you will be so much better off.
It is the time of year for receiving gift cards. Sweating the Big Stuff has some great tips for getting the most out of gift cards.
And finally, it’s time to start thinking about taxes again. Here are some end of the year tax tips from Christian PF.
I hope you enjoy these articles and will stop by the Carnival of Personal Finance to find your favorites.
Cash
I was reading an article at Fire Finance about the number of people who live without a bank account. Fire Finance was stunned to find that 17 million Americans have no bank accounts. I was not so surprised. Having worked in various situations with low income people, it is common among them not to have a bank account.
With 13 to 17 percent of the population living at or below the Federal Poverty guidelines, it’s not surprising that few of them have checking or savings accounts. They generally have income once a month or no regular income at all. They cash their checks at the closest available place and what cash doesn’t go to pay the monthly living expenses, they keep the little remaining cash close at hand.
Life on A Cash Basis
While I am not one of the 17 million Americans without a bank account, we do live life on primarily a cash basis. We have a checking account and a savings account. Our checking account is used solely for paying monthly bills. We do not use it for shopping at the grocery store or for gas or daily incidentals. Our savings account is online and it is used solely for an emergency fund. It is linked to the bank account for easy transfers in and out of checking. We ordinarily keep a $5 balance in the checking account.
I know that we are not the norm for Americans because we pay for most things with cash, good old American greenbacks! We don’t use credit cards as a matter of fact, neither of us even own a credit card. We also do not routinely use our debit card. We do own one of those but generally, it is only used to check the balance if necessary when the bank is closed.
Like most Americans that Fire Finance classifies as underbanked, we don’t have a great deal of income. We generally are living off of less than a thousand dollars a month. While this is well below the poverty level, it doesn’t feel like we are ‘poor’. I can’t think of a many things that we want that we don’t have. I can’t actually think of many things that I had when I was earning over sixty thousand per year that I don’t have now except for bills.
While many people will find this a shockingly low income, we live quite comfortably on it most of the time. We don’t have any real debt other than a small loan on the farm so what cash we have goes to the daily essentials of living. Neither of us want to go into debt so we don’t even consider buying and financing a car. Quite simply if we can’t pay for it, we don’t get it.
If there is something that we want which we can’t afford to pay for with cash, we do one of two things; we either save up for it or we make a plan to make enough money to pay for it. For example, we seriously need a tractor. There are just some things that it is difficult for two people to do on a farm without one such as moving 800 lb hay bales or plowing our large garden and mowing 19 acres of pasture.
Even a small tractor is a large expense usually costing between 5,000 and 10,000 dollars so we do not have the cash on hand to purchase even a used one. Our plan is two fold rather than getting a loan, we will save as much money as we can to put towards the tractor and we will also start selling some things to pay for the rest of it. The final and probably hardest part is being patient. We will wait until we have saved up enough money and then wait to find a really good deal on a used tractor before we purchase it. While we wait, I will research the prices so that when we find one, we will know what it is worth. I expect that it will take us a year to save enough money but if we financed it, we would be paying for it for five to seven years.
In the past we would have borrowed the money without a second thought and because of that we would have ended up not getting a very good deal. We would not only have paid too much for the tractor, we also would have been paying interest on it for years. Now we are forced to do our homework and so will get a better deal. We will also have the bargaining chip of paying cash when we find it.
We got our truck the same way. I spent months researching prices and searching online for a truck that we could both afford and that would meet our needs. While I searched, we sold our old truck and saved enough money to purchase the newer truck. When I found the truck of our dreams on craigslist, it was about 200 miles away and we bargained over the phone for a lower cash price. We saved $500 off of his advertised price because we could come that same afternoon and we were bringing cash. We saved an additional $1000 over what we had found the same truck priced for locally. We saved 8 percent by not having to pay interest on a loan.
Even smaller purchases sometimes come with a savings if you pay cash. Several of the local gas stations give a discount on gas if you pay in cash. It makes sense for them since merchants pay 1 – 3 percent on credit card transactions. It’s nice of them to pass the savings along to their customers.
Even though we don’t have a lot of income, we live a pretty good life. We grow most of our own food and we generally have enough to share with friends and family. We don’t go out to the movies often but then we do spend quite a bit of time with our extended families playing cards or just socializing. The food we eat is generally homegrown and fresher than store bought. It doesn’t contain all of the pesticides and chemicals of processed foods.
There are some sacrifices when dealing only with cash. There are times when we do without some things because we don’t have the cash to pay for them right then. There are times when we miss a really good deal on something because we are unwilling to borrow money but overall, the money we might have saved by buying it right then we would have spent on interest on the debt.
For me, our lifestyle is based on cash. I can see it, touch it, count it and know exactly how much we have and what we need to spend it on. It is more of a different mindset than putting all of it in the bank and using my debit card to pay for things. It is much more difficult for me to visualize and keep track of our finances when I used my debit card and checks to pay for things. I have always been a visual learner but I can tell you that watching our cash dwindle physically is the best way that I have found to stay on a budget. For the most part, we are pretty happy with what we have and don’t miss too much of what we don’t have.
Happy New Year!! It seems that many of our traditions here in the south are marked by food but none more so than the traditional New Year’s dinner. While many holiday dinners are made up of foods to show that we have plenty, the New Year’s meal is made up of foods that are traditionally thought to bring luck, prosperity and wisdom.
Black Eyed Peas - There are several different opinions on why these dried beans are a New Year’s staple. I have heard that the eye in the pea looks ahead and will give you wisdom in the coming year. I have also read that the dried beans are used because they swell during cooking which symbolizes the swelling of your purse through the year. Whichever reason you believe, I cook a pot of these with fat back and onions. We purchase a bag of dried peas and I put them in water to soak on New Year’s eve. This morning I rinsed and added the smoked fat back and onions to the pot for seasoning and will simmer them all day. They really are delicious.
Greens – Greens are another food that symbolizes prosperity. Most believe that it is because they resemble folded money. I can’t really see the resemblance myself but they are green so I suppose they will do. We barter for collard greens and I think we get the best part of the deal. We have a man who comes and cleans out our barn for the manure to put on his garden. He brings us collards a couple times a year. We not only get fresh collards but we also get the barn cleaned out for free. He gets free fertilizer for his garden. It’s a win win situation.
The collards are also cooked with a piece of fat back for flavoring. They are washed, chopped and cooked most of the day along with the black eyed peas. Collards are one of the cold weather vegetables that grow on into the winter here in Virginia.
Hog Jowl - This seasoned bacon like meat also symbolizes prosperity in the coming year. There are many opinions on why hog jowl symbolizes prosperity. Some believe that it’s because the pig roots for it’s food and so it’s nose is always pointed to the future. There is also a belief that the pig grows fat from eating the leftover scraps of food from the family. When everyone had a family pig, all leftovers were put into a slop bucket and fed to the pig daily. When it was butchered, every part of the pig is used for something, even the feet and tail are traditionally cooked or pickled. I must admit that I have never tried either and don’t really plan on it.
R fries the hog jowl like bacon and I must admit that it is delicious. I will most likely make biscuits to eat it. Hopefully with all this New Year’s luck, 2010 will be a bountiful year and our finances will take a turn for the better. Maybe we can bring the country and economy along with us.
What are your New Year’s Traditions?
Tags: traditions
The ancient Babylonians are thought to be the first to make New Years Resolutions. They made them to find favor with the gods and breaking them was supposed to bring bad luck. Many of us continue to make New Years Resolutions every year and most of us fail to keep them. The Babylonians were careful to pick resolutions that they could keep through the year and we should be just as careful.
Every year I make the same New Year’s Resolutions and every year I fail to keep them. I might make some effort to keep them for a week or two but then other things become more important. I have really spent some time this year determining what I want to accomplish in the next year.
The Most Common Mistake
Most of us make a very common mistake when we are making our resolution. We make a resolution to do something to improve ourselves such as losing weight, quitting smoking, saving money, etc but we never really make a plan on how to do it. We think about it for a week or so but then just flounder because the reason we haven’t done it in the past is because we really don’t know how to go about it.
Making a plan to support our resolutions
One of my New Years resolutions is to put and keep money in my emergency fund. Well, that’s a pretty good resolution but it is non specific. I have to ask myself how much money should I have? How long should it stay there? Or even more important why haven’t I been able to keep money in the fund in the past? The easy answer is that I keep having emergencies but if I look closer, I really haven’t had but one emergency this year and that was when my father got sick in April. I have taken money out of the fund for groceries, to pay bills, and to do car repairs. All of these things should have been covered in my regular budget but our income for the month did not support the budget.
So if I make the resolution to keep money in my emergency fund, I am already setting myself up to fail if I don’t make some adjustments to my budget. This year, instead of putting all my savings into my emergency fund, I am going to start a second account to use as an operating account. Because our income varies drastically from month to month, I am going to start putting money aside specifically to be used to cover those months where our income is low. In the past, we have just tightened our belts and done without and then dipped into the emergency fund to cover the essentials.
My plan this year is simple, specific and measurable. I cannot take money out of our regular income for our emergency fund. We just don’t have enough income to support it unless the economy does a drastic turnaround. I do have irregular income that comes from my blog, some ebay and craigslist sales. This income is going to go into my emergency fund. Any boon in our regular income will go into a separate account to be used in the lean months.
Another Common Mistake
Another mistake I make every year is not looking at what didn’t work over the last year. The answer this year is easy, I didn’t work. I have made very few posts over the last 12 months. My focus has been on other things and I have made less than a decent effort to write or promote my websites or internet business. This is going to change this year and I am making a committment to write daily on this blog and several others that I maintain. I am going to set aside time each day to accomplish this.
My Plan
Increase my internet income to $100 per month for the first quarter.
For the second quarter, I would like to double that to $200 per month.
For the third and fourth quarter, I would like to be making $500 per month.
My How
eBay - I am going to start selling on eBay again. I pick up knick knacks and collectibles at thrift stores and yard sales and resell them on eBay. Historically, I have done pretty well at this, usually doubling my investment.
Blogs - I need to double my traffic on all of my blogs. It has dropped off simply because I have not been writing and I have lost quite a few of my readers. I have also not been promoting them. I will be writing at least three articles per week on each blog and promoting each article. I actually enjoy this because so much of blog promotion is just getting out and visiting other blogs. I learn quite a bit and make some great friends this way.
Guest Posts - I am going to be accepting guest posts on all my blogs on a weekly basis. I am also going to try to write some guest posts for other sites.
Results
My resolutions this year and goals are rather ambitious. It will take time and hard work to accomplish them but it is a labor of love and I will enjoy both the process and the results. I will keep you updated on how my financial goal is going over the months.
I have to admit that I hate to shop. I hate the holiday crowds, fighting for a parking space, standing in long check out lines. All of this is why I love shopping on online. I have found that I can save hundreds of dollars a year even with my limited holiday budget just by shopping online and this doesn’t include the gas to drive all over town.
Used Books
I read a lot. Most of my family reads as well so books are always a good choice for gift ideas. I purchase most of my books from Amazon. I buy the majority of them in good as new used condition from private sellers at a drastically reduced price.
Free Shipping
I get free two day shipping on quite a few items by signing up for Amazon Prime
Online Auctions
For those unique or hard to find gifts, you can often find them on ebay. I buy jeans for my son in law who wears a 40 inch inseam and they are almost impossible to find in stores. I have always been able to find them on ebay for a greatly reduced price. Other gifts I have found are new cowboy boots, some collector items for my mom, some gorgeous handmade wreaths for my daughter and of course, ebay is another outlet for books. I have purchased all of my laptops on eBay and always been happy with them. Be sure to check on the shipping price before you bid or buy on ebay as some shippers charge an exorbitant rate.
Comparison Shopping Sites
There are several websites that allow you to comparison shop by price.
Nextag
Shopzilla
Price Grabber
Smart Money rated different comparison shopping sites and Price Grabber came up on the top of the heap. You can see the whole list of comparison sites in their article.
Shop Locally
Ok, so what is shop local doing in an online shopping article? Some stores like Walmart and Sears offer the ability to purchase off of their website and have it delivered to the local store. This saves shipping on most items and you can stop off to pick them up when you are going by anyway.
Check for Coupon Codes
There are many online sites for coupon and discount codes for online shopping. Many of these codes are for major retailers such as Home Depot, Kohls, ToysRUs, etc. Here are just a few:
You can find more by googling coupon codes. Some sites have printable coupons that can be used at local retailers.
Holiday Sales
Just like brick and mortar stores, most online stores have holiday sales as well. Amazon is offering special Black Friday/Cyber Monday deals. You can also check to see if your favorite stores such as Walmart, Home Depot, or Target have a website and check it out for online sales. Many of the major retailers are offering free shipping.
Safety
Be sure to make sure that whatever site you order from has a secure order form. This means that your credit card information is encrypted in the same manner that banks use to send information. Do not send your credit card information through email. The safest way to shop online is to use prepaid credit cards as these are limited. In this way, you are not giving someone a link to your bank account or credit card.
Tags: Holiday, holiday shopping
Yesterday I wrote an article on prepaid debit cards, I wanted to highlight one of the best features of using a prepaid debit card, sticking to your budget!
I really like prepaid debit cards, because they’re “prepaid.” What that means is that you can auto-load your card each month with a set amount, and then you have to stick to that amount. There’s no cheating, because unlike a bank’s debit card, you can’t spend more than you actually have. The other benefit is you avoid ridiculous overdraft fees and you know exactly what your monthly fees will be.
Tips for Using A Prepaid Debit Card for Budgeting
In my budget I have categories and money for some categories has traditionally been put into my savings account. The problem is that this money often gets used for other things or it isn’t quickly available when I need it. This means that when the time comes to use the money for purchases in that category, it isn’t there and I end up blowing my budget.
With Christmas coming up, I am always looking for ways to stay in budget and a prepaid credit card that I could not only shop online with but also take with me so that when I see that perfect gift, I would have the means to purchase it.
Another budget category that I might use a prepaid card for is clothing purchases. I am definitely not a ‘clothes horse’ so my clothing purchases tend to be sporadic. If I put my clothing budget into my savings account, I either use it for something else or don’t have the funds immediately available when I see something that I really like.
Because we travel in our business, it is often inconvenient to use cash. I often have to make reservations at a hotel and without some kind of credit/debit card, it is almost impossible. I can put our budgeted amount onto our debit card and then make reservations with confidence. It’s also a true pain in the rear to have to prepay for gas. I have to estimate what it is going to cost to fill the tank, stand in line to pay the deposit and then stand in line again when I am done filling the tank. The prepaid card will make trips much easier.
You can also extend this to your family. For example, a prepaid debit card is perfect for a college student. Instead of giving them a credit card or cash for the entire semester, consider giving them a prepaid debit card that gets auto-loaded each month. That will force them to stay within their budget, and will also keep them from blowing through their money before the semester is over.
In short, prepaid cards are a tool that can be used to enhance your budget while forcing you to stay in a budget. You need to shop wisely for your card and be aware of any hidden charges and fees. As I have said before, I will never own another credit card so a prepaid card is very attractive to me.
I have to confess that not having a credit card is a MAJOR inconvenience. There are times when it is almost impossible to purchase something without it especially since I do so much business online. When I order bulk supplies, it is much less expensive to purchase online and many merchants do not accept Paypal. Over the last week, I have been researching prepaid credit cards.
My Dream Card
I have made up the following wish list for my dream card. I don’t expect to get it free but I would like it to be reasonable:
- Reasonable activation fee of under $20
- No dormancy fees
- Pay some kind of interest on my money
- No fees for purchases
- Reasonable fees for atm withdrawals ($1 or less)
- Free Online Balance Check
- No monthly fees
Is this asking too much? There are a few cards that come close but none meet all of my requirements so I have been making comparisons. They are very confusing and the card that might be the best for my spending habits (occasional transactions) might not be best for everyone. If you plan on using the card several times per month, you might be better off choosing one that has a small monthly fee and free transactions.
Because Walmart has put their money card on sale I thought I would use it as an example. I honestly was somewhat skeptical about the monthly fees but after much research I have found that they are probably the best value. All transactions are free except atm transactions. The only way that I have found to get around atm transaction fees is to use your bank card at your own bank and that is not always free.
This is what is posted on Walmart’s cardholder agreement:
| Standard Fees |
|
| One-time Temporary Card Issuance Fee at Walmart Store | |
| - Standard Walmart MoneyCard | $3.00 |
| - Student Edition Walmart MoneyCard | $6.00 |
|
|
|
| Reload Personalized Card at Walmart (No Check Cashing) | $3.00 |
|
|
|
| Reload Personalized Card at Walmart (Check Cashing) | $0.00 |
|
|
|
| Reload Personalized Card at Green Dot | Varies by Retailer |
| Location (other than Walmart store) | |
|
|
|
| Additional Personalized Card Fee | |
| - Standard Walmart MoneyCard | $3.00 |
| - Student Edition Walmart MoneyCard | $0.00 |
| Standard Fees |
|
| - ATM Cash Transaction – Domestic | $2.00 |
|
|
|
| ATM Cash Transaction – International | $2.00 |
|
|
|
| ATM Balance Inquiry | $1.00 |
|
|
|
| POS Cash Back | $0.00 |
|
|
|
| Walmart POS Balance Inquiry | $0.00 |
|
|
|
| IVR (Automatic Telephone System) Balance Inquiry | $0.00 |
|
|
|
| Monthly Maintenance Fee | $3.00 |
|
|
|
| Operator Assisted Call | $0.00 |
|
|
|
| Teller Cash Transaction | $2.00 |
| Standard Fees |
|
| Lost/Stolen Replacement Personalized Card | $3.00 |
|
|
|
| PIN Debit Purchase | $0.00 |
|
|
|
| Signature Debit Purchase | $0.00 |
|
|
|
| Stop Payment Order Fee (see section 7) | $0.00 |
|
|
|
| Negative Balance Fee | $0.00 |
|
|
|
| Rush Delivery of Personalized Card | $20.00 |
|
|
|
| Foreign Transactions (see section 19) | 2% |
In contrast, here are some of the fees from another highly advertised prepaid credit card:
This is the NetSpend Prepaid Card as shown on another website:
|
|||||||||||||||||||||||||||||||||||||||||||||
Altogether though these fees may be considerably less than you are spending on your current credit card every month. These fees are subject to change so if you are considering a prepaid credit card make sure that you read the small print and search for the best deal.
If you have any better deals on prepaid cards, I’d love to hear from you. I am specifically searching for one that pays interest on the available balance.
Plans for our big family Thanksgiving dinner are well under way. As my daughter tells everyone, Thanksgiving is Mom’s holiday to cook and she is right. There is nothing I enjoy more than cooking turkey, stuffing and all the fixings. Of course, I enjoy the left over turkey just as much. I could eat turkey sandwiches every single day.
I bought the turkey well over a month ago when they were on sale. We have four different families who come to dinner for Thanksgiving and each person brings their favorite dish. It makes for a varied menu and means that all of the cooking and preparation doesn’t fall on Randy and I.
With Thanksgiving being so close, I have been thinking about Christmas presents. There are a few that I have bought throughout the year, just because it was something that I knew someone would enjoy. It takes some of the pressure off at the holiday season. I have always envied people who start Christmas shopping in January. I am not organized enough to do that. I also can’t stand having something here for someone for so long. Once I buy it for them, I want to give it to them.
We have quite a few bachelor friends and close friends who we like to give something. I usually start baking cookies and breads right after Thanksgiving. Each one of our friends gets a box of cookies & breads for Christmas. Those who entertain during the holidays have some extra cookies to give away and our single friends really appreciate them.
I am also going to be giving some of the pickles and relish that I have made over the summer. I doubt that we can eat 20 pints of green tomato relish before next fall. It will be a nice and inexpensive way to let our friends know that we are thinking of them.
I still need to find some frugal ideas for some of the family and the children. What do you do for your family and friends at Christmas? Do you have any frugal ideas for children’s presents? Leave a comment and I will be using reader’s feedback for an upcoming post.
This is a guest post by Debbie Dragon who is a freelance writer providing articles for Billeater.com, a site that helps it’s readers compare insurance and discover tricks for saving money. She is also a single mother of two young boys and is currently working on eliminating her own credit card debt.
Credit card debt is unfortunately a way of life for the average American family. We’re enticed daily with the backwards motto to “buy today, pay eventually”. Many struggle to simply make the minimum monthly payment. For the many moms who are the family bill-payers, here’s some effective and easy ways you can eliminate credit card debt.
First and foremost, pay for your purchases in cash. You can prepare for this in advance, once you are determined to eliminate your debt, by setting aside at least $20 a week or more if possible, to start a petty cash fund. Commit to using your credit cards only in an emergency or a situation that requires a credit card, such as renting a car.
Review charges you consistently make on a monthly basis. These charges may include membership fees, subscriptions, automatic bill payments, gas for your car, prescriptions, sports equipment and uniforms, school tuition or orthodontist appointments. After listing them, determine how much money is to be allocated monthly for each payment. You may need to cancel the non-essentials. You can exercise at home for free; and if you don’t read half of the magazines you’re subscribed to then cancel them. Eliminating gym fees and subscriptions alone could save you hundreds of dollars per month.
One common sense method for moms to eliminate credit card debt is known as the Debt Reduction Pyramid. Basically, it’s a process of determining all debts owed starting with your smallest debt, and then pay off each one fully, working your way down to the largest debt. Predetermine to pay above the minimum payment for credit card debts. Once some of the smaller debts are paid, begin to pay full monthly payments. Continue this process until you successfully pay off all your debts in full.
Moms, a budget may sound too simple and over-rated but it can be the single most important tool for eliminating credit card debt. By creating a personalized budget and strictly adhering to it on a daily basis, you will reap the benefits and see your debt dwindle before your eyes. Remember to place your non-essential expenses at the bottom of the budget’s priority list.
Just by following these simple steps, you are well on your way to eliminating credit card debt. Reconsider those club memberships and pointless magazine subscriptions in order to organize expenses in priority-categories. With a debt as small as $10,000, if you’re only able to make minimum monthly payments it will take you 40 years to pay off that debt.
Tags: debt, debt reduction
I don’t have any credit cards currently but it never ceases to amaze me what people will pay to have one. Congress recently passed a bill that limits the banks from raising interest rates on existing balances. In reaction to this limit, banks are now starting to charge annual fees.
According to an article in USA, Today,
Citigroup, meanwhile, has started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 a year. Other banks are charging inactivity fees if customers don’t use their credit cards during a specific period of time. You heard that right: You could be spanked for staying out of debt.
These fees are the credit card industry’s response to credit card legislation that will, among other things, restrict credit card issuers’ ability to raise interest rates on existing balances. Credit card issuers are looking for ways to raise income before the new rules take effect in February. During the first quarter, 27% of credit card offers included annual fees, up from 18% a year earlier, according to Synovate Mail Monitor, a credit card direct-mail tracking service.
Other companies are just increasing or adding an annual fee for all credit cards. USA Today, suggests that you make a decision on whether to keep your card or not by deciding how much you are going to use it and whether you can find a better deal elsewhere. They suggest finding a credit union as they generally have lower rates and charges for their members.
Has your interest rate or annual fee changed on your credit cards in anticipation of the new legislation?
Comments