You Might As Well Burn $5!

191st Carnival of Personal Finance

2009-02-09T09:54:00.000-08:00

I participated in the 191st Carnival of Personal Finance today, check it out at Dollar Frugal!

Fair Isaac is Changing the Rules, AGAIN!

2009-02-03T19:37:00.000-08:00

Just as soon as I understood how the magical elves calculate credit scores, they had to go change it up on me!

There's some good news and some bad news. No more adding a name to a credit card to boost the score of the person with crappier credit is the bad news. (Yes, this can be a good thing when done properly.) The good news is that one BIG BAD item, such as a repo or a default won't hurt you as much as long as everything else is in order.

Seriously, read more at Consumerism Commentary.

Why You Should at Least Learn to Bake:

2009-02-02T05:00:00.000-08:00

My quest for an amazing blueberry muffin recipe has been a thorn in my side for a year or two now. I try (emphasis on try) to bake something for my breakfasts every week. I don't really like cereal in the morning. I do like oatmeal and other hot cereals, but I prefer for my breakfast to be a grab and go affair. Buying pre-made breakfasts (bagels and the like) is a good plan, and when the price is right, totally affordable. But every time I buy bagels or muffins or another pre made breakfast food, I stare at the big jars of flour and sugar on my counter and sigh.

This week, I finally found an amazing blueberry muffin recipe. These are coffee shop caliber muffins. The only changes I made were to reduce the amount of sugar and flour in the topping (to 1/4 cup sugar and 1/3 cup flour) and to make 12 muffins instead of 8. If you follow this recipe, be sure to cube up the butter for the topping fairly small.

If you live in California and you step into your local Albertson's this week to purchase ingredients for blueberry muffins, here's how much this recipe would run you, per muffin. Except for the Barbie muffin wrappers part. I found those on manager's special at Food 4 Less. You could also jam aluminium foil or wax paper into the muffin pan cups. Or just forgo the wrappers completely.

40 cents a muffin! And that's assuming you haven't shopped around a little for the best ingredient prices. I did, and the batch I made last night probably came in at closer to 25 cents per muffin, meaning that a muffin and a cup of Starbucks coffee made at home runs me about 28 cents total. (We've got a friend who works at Starbucks, he sells/gives us his weekly pound of coffee.)

If I had homemade coffee and a muffin everyday for a year, I'd be paying $102.20 a year to do so. By contrast, spending $3.25 on drip coffee and a muffin at a coffee shop once a week would cost about $169 a year. Homemade coffee and muffin just once a week for a year? $14.56, for me. Which, if you're still with me, saves $154.44 a year on muffins and coffee.

And the kicker? Once again: homemade coffee and a muffin, every day, for one year, would cost me $102.20. Buying it at a shop, everyday, for a year? $1186.25. That's assuming you're buying a cup of brewed coffee, as opposed to a latte which would bring your yearly coffee and muffins total to about $1825.

And no, I didn't forget a decimal point.

I'm All for Stimulating Our Economy...

2009-01-27T05:00:00.000-08:00

But I'm a little tired of hearing about it. I realize there are people losing their homes in foreclosure. I realize there are people whose retirement accounts are now undervalued. I realize that millions are out of a job right now.

I ALSO know that in America, when you're unemployed - the government gives you a hand. I think that rocks. I'm willing and proud to help pay for unemployment. We live in a country where - when the markets tank and people are losing money and businesses are hurting - the government tries to find a trillion dollars to fix the leak. Everywhere I go I hear about the economy. I even hear about about the economy from people who don't have a savings account, much less a retirement account or a mortgage.

There are a couple million people living in poverty in this country who probably don't feel the pinch at all. They were already pinched.

What in the hell is wrong with us? Why are we still whining? Why are we so worried about whether we can gas up our cars, and why on EARTH do people think not having cable TV is a sacrifice?

My husband and I are well off. Extremely well off, actually. Insanely, insanely well off. We've got multiple computers in the house (well, duplex), two cars, multiple televisions (we need to dump one, incidentally), annual passes to Disneyland, cell phones, an iPod each, and secondary educations - albeit incomplete ones.

We eat dinner every single night, we have lunch every day, and breakfast when we wake up on time. Our cat eats twice a day. We have running water, electricity, gas, and high speed internet. (No cable TV though, that's why we have the high speed internet - oh the sacrifices we've made.)

I have 30+ pairs of shoes, and that's after selling off nearly all of my designer shoes a couple years back, so I could pay rent. See, I thought I was making a huge sacrifice, selling my way, way overpriced shoes to make rent.

My overpriced shoes could have fed a family for a year in Sierra Leone. I don't have numbers on that, but I'm not a bloody statistician. Google it, I'm sure you'll find that half a pair of my designer shoes could have fed somebody, somewhere.

Back when I had cable, sometimes I watched 'My Super Sweet 16.' For those of you who don't know - ugh. Just click the link. It's a train wreck. These girls scream about not getting a $500,000 car. I couldn't look away. I got the hugest kick out of swigging by beer, confident, nay smug, in my superiority to a bratty little child whining about her multi million dollar birthday party.

Here's the thing about that; I'm not much better than those petulant brats when you put it in a global perspective. I don't need to quote statistics. Almost anyone who's lived in the world for four or more years knows darn well that that are people in this world who live for a month on what we spend on a latte and a bagel in the morning. My household pulls in more than 50K a year before taxes and by God, we are filthy rich. Not only are we filthy rich compared to most of the world, we're filthy rich compared to millions here in the U.S.

I'm not saying that those of us who are lucky to live in the ultimate First World nation should scrap our big screens or our cars our even our luxury goods.

I'm just saying we should quit whining.

http://www.worldvision.org

Oh No, They Be Holdin' My Refund Hostage

2009-01-26T09:00:00.000-08:00

You've probably already heard the fuss about getting IOUs instead of refund checks here in California. That said, according to this, if you file early enough, you should get your refund as usual. Last year the FTB (Franchise Tax Board) processed my refund in a matter of days. As usual, I'm neither expert nor professional, but this is probably the last day to file with even a slight hope of getting your return processed before the February 1st deadline and the 30 day hold.

As I've emphasized before, most of my readers will qualify for free file - for your federal taxes as well as your state taxes. If you're in California, I suggest you grab your W-2 and try to make the deadline.

Economic Stimulus Now, Redux

2009-01-26T05:00:00.000-08:00

A fact you may not be aware of is that if you get legally married late in the year...say, the day after Christmas - you're required to file your taxes as though you were married for the entire year. Even if you get married at 11:59 pm on Dec 31st, the IRS considers you to have been married for the entire year.

2008 is a particularly useful year for this. Remember the Economic Stimulus rebate? Single folks got somewhere between $300-600? Married folks got $1200? The amount of your economic stimulus rebate was based on your 2007 taxes, because you hadn't filed your 2008 taxes yet because the year wasn't over. You 2008 self was getting money based on what your 2007 tax return indicated about your 2008 return which would be filed by your 2009 self. Sort of. Anyway, that's part's boring. (Though there may be DeLorean joke in there somewhere.)

Point is, if you received a $373 rebate check as a single person in 2008, and then got married later in the year to a spouse who got a $600 check, the government owes you $227 - because the IRS considers you to have been married during the handout. $1200-($373+$600) = $227, for those of you who hate 'rithmetic.

If someone claimed you as a dependent on their 2007 taxes, exempting you from the rebates at the time, but no one can claim you in 2008 - the government owes you a stimulus check.

If you had a baby in 2008, you also qualify for more money.

Basically if your life changed at all in 2008, you might qualify for more money.

Where do you claim the credit, you may ask? Good thing I read the IRS website, so you don't have to:

Form 1040 - Line 70
Form 1040A - Line 42
Form 1040EZ (the one most of you will likely use) - Line 9

All of the tax forms will come with an instruction worksheet on how to calculate your stimulus credit. So if you're doing your taxes on paper using pen and ink by the light of a gas lamp, knock yourself out calculating that. Or enter "RRC" on the appropriate line and the IRS will calculate the stimulus credit for you.

If you're filing online, most online tax preparation programs will calculate this for you.

Most folks reading this blog, except maybe my mom (hi mom), qualify to free file. So please, PLEASE, don't hand a tax prep firm your hard earned money to file your probably very uncomplicated taxes for you. Don't give them money to give you a refund anticipation loan at a ridiculously high interest rate when the government will direct deposit your refund in a week or two if you file early. Seriously, you may as well - well, you know.

Everything I Can Spout About Credit Scores

2009-01-23T00:14:00.000-08:00

Ever since I started writing this blog and generally pulling ahead financially, my friends have been asking me about finances, especially credit. Specifically they want to know how on earth a credit score is calculated. I found the answer about 2 years ago in a book somewhere, and I've been spouting a vague recollection of it ever since (luckily, it turns out my vague recollection was closer to "spot-on" than "oh crap, I totally remembered that wrong.")

After a quick Google to double check my memory, I present to you the basic components of a credit score, and my completely unprofessional (meaning: don't sue me if you try this and it fails) advice for beefing up the magic number.

35 percent - PAYMENT HISTORY. Obviously any lender is going to want to know how reliably you pay your debts. Some of us got shady car loans at 18 and never did reign ourselves in so that we could pay them on time and now we have an ugly, ugly blemish on our credit reports because we were really, really dumb back then. You know, just some of us. THE FIX: For goodness' sake PAY YOUR FRAKKING BILLS ON TIME. Your payment history is the single largest piece of your credit score. Call your bill collectors (your cell phone company might be a place to start) and ask them to start reporting your payments to the credit bureaus. If you have no revolving credit accounts to pay off on time, get a tiny secured credit card (Many secured cards are total scams, so do some research. I recommend the Bank of America Platinum Visa. $29 a year, and you can secure it with as little as $300. I paid it off every month and received my security deposit back after 9 months. I now have an unsecured card that's been paid in full, on time for nearly a year. ) Credit card debt is something I've somehow (magically?) never racked up. But if you have credit card debt, start making bigger, on time payments. For advice on finding the money to do that see: the rest of this blog.
30 percent - OUTSTANDING DEBT. Some of us are a little screwed in this department - we had crappy car loans or we bounced a teeny tiny check when we were 18 and it's gone to collections and it's grown so big that we are NOT ponying up $120 for a freaking Vanessa Carlton CD. (Shut up.) Some of us fell flat on our backs in bars when we were 21 and sprained our necks - an injury we didn't even know was possible until we did it - prompting a hospital visit we still haven't paid for (though we were theoretically insured at the time, it would be awfully difficult to prove now.) Not that I did any of those things, but - you know, maybe some of you guys did. This outstanding non-interest earning debt obviously affects your overall score. More important than that old debt that is your DEBT to CREDIT RATIO - if you've got revolving accounts (credit and charge cards) just how much of that available credit are you using? THE FIXX (two Xs, like the band - hee!): First, for some freakish reason that I still don't quite understand - paying off all of your aging non-interest earning (ie, not credit card) accounts might actually dock your score in the short term. If those random debts are old enough, they'll drop off after seven years. If you're not looking to finance anything anytime soon - letting them disappear is better. As far as your debt to credit ratio, it looks good to only use a small portion of the credit available to you. If you've got a $10,000 credit limit, try to use just $2500 or less at a time. Using only 25% or less of your available credit looks good to lenders - and then they'll want to give you money if you ever want a house or something. A good way to keep your credit usage low is to use your card ONLY for paying a few bills - then pay the credit card bill every month.
15 percent - LENGTH of CREDIT HISTORY. This one is particularly unfair to younger people. If you're a totally responsible 20 year old (and they do exist), your relatively short credit history is going to hurt you - past behavior being indicative of future behavior, they don't think your two years of paying off the credit card your mom co-signed for you counts (though it should). THE FIXX (dun nuh nuh nuh saved by zero...I'm so sorry) If you have no credit history at all, get a really, really low limit card. Use it very little, pay it off every month. It takes about 3 years for your good credit behavior to "count" - that is, 3 years before the credit bureaus see your timely payments as a habit rather than a fluke and raise your score significantly.
10 percent - NEW CREDIT (INQUIRIES). Getting a new credit card, loan or other credit account will negatively affect your score for a short time. But not for very long. Even letting a lender LOOK at your credit score docks you points, the theory being that too many inquiries means you're desperate and broke and looking for a handout you'll never pay back. If you've given someone permission to look at your credit report, it's considered a hard inquiry, and it docks your score by 5-10 points. A bunch of hard inquiries within a short period of time are counted as one (to account for consumers shopping around for the best rate.) If you pull your credit yourself, it is considered a soft inquiry and does not dock your score. THE FIX: The good news is that hard inquiries drop off your report after two years, so if you've got a bunch of inquiries dragging your score down, they'll be gone fairly soon. Beyond that, just be selective about who pulls your credit and pull it rarely.
10 percent VARIETY OF ACCOUNTS. This is the mixture of credit accounts you have. Installment loans (cars, student loans) and revolving accounts (credit & charge cards). THE FIX: Lenders like to see a healthy variety of accounts, but not TOO many accounts. Generally you want 2-5 revolving accounts and 1-3 installment accounts. ( But don't quote me on that, I just remember reading it somewhere, no lawsuits if I remembered incorrectly!)

And there you have it - prety much everything I know about credit scores as it applies to younger folk.

Oh!

Catchy commercials notwithstanding, don't use freecreditreport.com unless you will definitely remember to cancel your "membership" after the trial period. You are entitled to one free report per year from each of the three major credit bureaus. Get it at annualcreditreport.com.

No Carpet Jokes, Please

2009-01-13T20:38:00.000-08:00

Why anyone buys anything new is beyond me. We got our Kenmore microwave for $7.50. We got a wicked sweet coffee table for $15. There are folks who might spend upwards of $500 or more on just those two items alone.

But we also bought a rug at a fancy furniture place for $80. It was the display model, so we had it cleaned for $49. We've got hardwood floors, so a rug was necessary. We nabbed ourselves a $400 rug for a total of $129. Which is a hell of a lot for a rug, but not a whole hell of a lot for a rug that makes your feet feel oh, so happy.

Here's the thing, I can see laying out $129 for a really nice rug, maybe even $150. A good 5x8 rug. But who on EARTH would throw down $400 for the same thing I got for $129? I "saved" $271 on our rug. I use quotation marks because I didn't save it. I don't have $271 in savings.

But we do have a rug that makes our toes happy.

Another way we might have gotten a super nice rug - and I should have thought of this, but the rug matched the micro-suede couches my now in-laws bought us for Christmas and I couldn't resist - another way we could have nabbed a nice rug would have been to call up a few dry cleaners and ask them if they had any abandoned rugs lying around. Sometimes people drop them off for cleaning and never pick them up, or they can't pay for them, hence, abandoned rugs. Most dry cleaners will donate abandoned items to Goodwill or to other charities - but if you call and ask you could score a sweet rug for free.

Or for the cost of the original owners' dry cleaning, anyway.

I Have Time for this Now, Right?

2009-01-11T14:39:00.000-08:00

Since my last post, I took 19 units worth of classes, nabbed a job as an accounting assistant, and I got legally married. And I moved.

Observations on Each:

(1) 19 units. Do NOT try this while holding down a job of any kind. Well, maybe a 4 hours a week at Starbucks type job - but certainly not a job that requires 35+ hours that you need to make rent. Also don't try to take 19 units and work while attempting to have any sort of meaningful relationship with anyone ever.

(2) New Job! I'm the right arm of the CFO at my company. I work during the day. I have weekends off. I miss the casual atmosphere at In N Out Burger, but I don't miss the cheese burns or the closing shifts.

(3) Legally married. Between my new job and the fact that Fiance - I mean, Husband - is on salary now, we feel rich. Of course, we got legally married so that we could live together in order to save money to fund the big wedding in June. (We are both just old fashioned enough that the idea of shacking up landed pretty firmly on that side of Not Cool.) So we're legally married, and saving for our wedding. Maybe not at all romantic, but completely practical as far as we're concerned.

They say that it's not what you make, it's what you spend. With our combined income and somewhat lowered expenses we are coming out far, far ahead of what I'm used to - which, if you'll recall is paycheck-to-paycheck at a burger joint. We're by no means rich, but we make just enough to feel like we can blow our cash. We try not to, and we're pretty good about not blowing huge wads of money on useless crap...except when it comes to comic books - which I have taken to rationalizing as a quality of life expense. Being frugal enough in other areas (ie, not having cable TV) to be able to afford a comic book or two every paycheck with our allowance? WORTH IT. We're 24 and 26 years old, if anyone's wondering.

I've also always theorized that this frugality stuff works much better with two people - I'm quickly learning that it does. More on that as the weeks go by, but for now thanks for reading this after such a long silence!

Hiatus for School

2008-08-28T15:13:00.000-07:00

Hello everyone!

BurnFive will be on hiatus until December so that I can take a 19 unit courseload, work nearly full time, and plan my wedding without losing my mind.

Thank you for reading and for all of your support.

I'll be back in December with all sort of tips and articles on how to have a lovely holiday season without burning through your cash. See you then!

My Coffee Conflict.

2008-08-27T11:23:00.000-07:00

A commenter pointed out to me that my blog often turns to my love affair with coffee. Specifically, how much money I sometimes find myself dumping into overpriced coffee. My struggles with laying down money for my drug of choice are indeed symbolic of deeper a conflict between myself & my money; a conflict I'm certain anyone feels, not matter how old.

Once a person has gotten themselves to the point where they're solvent - even saving a bit every month - there seems to be a disconnect. The first wave of personal finance often sends folks into a frenzy of cutting corners, doing without, and spending less. After the habit of saving a certain amount becomes second nature, we might find ourselves saying "Man, I already saved 10% of my take home pay this month! Screw it! I'm blowing $100 on x!" or more likely we find ourselves allowing $3 or $5 here and there to start adding up again.

My rent & bills are just a little bit more than half of my take home pay per month, unless I work a lot of overtime. When I'm in school, overtime becomes a no-no, so I'm on a really tight budget to say the least. Even accounting for gas, savings, and little tiny extras here & there - I still have about $100 every month that goes out into the ether of impulse buying - which often means frou-frou coffee or fro-yo or another form of Snacking Out. Truth be told I really enjoy grabbing coffee or whatever with a friend, but when I look at my spending at the the end of the month, I wonder if I wouldn't have been just as satisfied having someone over for tea.

I've run the numbers for myself (and for you all) hundreds of times, and the answer is always the same! Cut out my impulse buying! At the same time, I don't want to cut my perceived quality of life. I think the conflict of saving for the future versus impulse-buy satisfaction is a problem for everyone. From someone like like me who feels stressed out spending $10 on something I didn't necessarily need to the person who spends $600 on a gadget and panics afterward, it is fairly universal.

How do I deal with such a nasty internal war over my spending? Sometimes, I just have to get over it. I'm into living within my means, but super extreme frugality is a goal I don't aspire to in the least. Extreme frugality for me would mean that I'd pretty much never leave the house. That said, there are a ton of ways I can cut back in little ways that make my lattes and cups of fro-yo an okay expenditure for me. Problems begin to arise when I'm NOT making the effort to cut the little corners, when I'm simply shopping stupid or not tracking my finances.

I tend to think of everything purchase I make in terms of my hourly pay, so I still find myself pausing before I spend $3+ on coffee. At the end of the day, my weekly to bi-weekly overpriced coffee outing isn't what could take down my semi-solid financial state - it's when those impulse buys become a daily unconscious habit and nothing is done to counteract them.

Aaaand, we're back!

2008-08-22T13:22:00.000-07:00

Too often, I feel as though I'm caught in between my time & my money. If I wake up at 8 and I have to be in class by 8:30, I'll skip making my own coffee - coffee that costs me less than a quarter a cup - and get Starbucks. Granted, I'll still opt for iced coffee over a latte, but I'm still paying way, way too much. Ideally I'd learn to just not depend on caffeine so much, but if there's anything being in class from 8am to 12 pm four days a week AND working full time AND trying to maintain a healthy social life has taught me, it's drink my coffee and don't skip breakfast.

When my schedule gets too crowded, I don't eat as well and I don't eat as much. This semester, I'm going to attempt to put myself on a meal plan of sorts, as much for my own health as for my wallet. If I've already got a batch of peanut-butter-and-raisin-slathered celery sticks made up and packaged in the fridge for nickels on the dollar, I'll be less tempted to justify buying an $8 chicken ceasar salad with exactly one slice of chicken that I won't even finish.

Maybe the most annoying thing about trying to spend conservatively and save my money is that sometimes I just feel like I don't have the time. I've never been willing to sacrifice people & relationships for money, so if given the choice between some time with friends or cooking a week's worth of meals in one night, I'll opt to spend time with people, which means I'm either paying for meals on the run or trying to throw them together in between work & studying. School is also a priority, but only because the silly little slip of paper is going to get me a higher paying job. I'm not willing to invest more time or money than I'll get back in higher pay post-degree. I don't ascribe to the oft touted insinuation that finishing my degree is going to make me a better human - it's just going to make me a higher paid human. While I want to finish, I'm certainly not going to sacrifice time with my friends or postpone my wedding - I hold my relationships with my family & friends higher than I do money or a bit of paper that will mean the same thing at age 25 as it would at 23. Often I'll choose to drop a class in order to be able to work a few more hours. If I make enough money to MORE than comfortably pay my bills, I'm less stressed out which means I'll do better in school, which means I'm far more likely to stay in it long enough to finish.

What all of this means is that there is a constant choice I'm making as far as where I'm expending my time & energy. Sometimes gaining an hour of time to relax is worth spending $5. Sometimes taking an extra hour to study is worth sacrificing a DIY project or two that will save me a little money. Sometimes it's completely worth it to blow everything off and spend a night with friends. As much as I like to put every purchase and every use of time into a numerical perspective, I think I'd go nuts if tried to put a price on every minute I'm awake. At the same time, they don't say "time is money" for nothing, so an hour or two a week planning out a budget for the month, a meal plan for a week, or even just blocking out time to study can save me upwards of $100 or more a month.

This summer, I spent about 24 hours a week in class or studying, 40 hours working, and somewhere in there I hung out with my friends - not a hard schedule, but definitely a grueling one. Even though I was pressed for time to write or do anything else, I still managed to take an hour or two every Sunday night to look at where I was financially and remain constantly aware of what I needed to do to continue living below my means.

Too often we lose track of our whole lives, not to mention our money, and stick our heads in the sand instead of actively trying to reign in our finances. Just one hour a week can help you plan for those times when you've got two minutes to decide whether you're going to plunk down cash to eat out or invest the time to eat in.

My Three Savings Accounts, or How I Keep My Grubby Paws Off of My Money

2008-07-14T13:22:00.000-07:00

When I started actively saving again after years of blowing my hard earned money on I-don't -know-what, I enrolled in the Keep the Change program at my bank (purchases are rounded up to the nearest dollar and the difference is transferred from my checking into my savings) - they matched the transfers 100% for the first three months and 5% thereafter. So far I've saved $102.31 this way, and I'll be receiving (so far) $42.30 when my matching funds are distributed to me in January. If your bank offers a similar program, I can't recommend it enough.

I generally keep a fairly low balance in this account, treating it as a safety net for any accounting errors I might make, causing my balance to be a little more or less than I'm counting on. I also use it for small, unexpected expenses if I don't have room in my budget for them. For example, when the price of gasoline jumped through the roof, I used this account as a buffer until I'd adjusted my spending to account for the higher cost. This is the most liquid of my savings accounts because transfers into my checking are instantly available. Once a month I transfer $25 over, which generally covers anything I may have needed 'borrow' from myself. The balance is kept fairly low (about $100) because the interest rate sucks. When the balance is over $100, the difference is transferred into my second savings account.

My second savings account is with an online bank with a far, far better interest rate than my brick & mortar bank. This account scrapes $25 off my checking account every payday, and I often will transfer small amounts of idle cash into this account. I use it to save for upcoming major expenses, in the $200 to $500 range. These generally are not emergency expenses but they're not exactly extravagant either. The last big ticket item I used this account to save for was a plane ticket to visit my family on the east coast, an expense that I would deem a necessary luxury. I continually add to this account whether I'm actively saving for anything or not. This account is slightly less liquid than the first one, it takes a few days to transfer money back into my checking. I also receive a referral bonus if I refer a friend who funds an account with $250 or more, I receive $10 and they receive $25. So far, I've earned $30 this way. (If you're interested, email me). When the balance gets to be more than $500 or so and I'm not actively saving for anything, the difference is transferred to my third savings account.

My third savings account is actually a money market account, held at a major online trading firm. This is my Big Savings Account, the balance is kept much higher than in the others and I never pull anything out of it. Partially because I opened it as part of a promotion - if I make an electronic transfer of at least $50 a month for a year, I'll receive $100. So yeah, I leave it alone. I transfer the $50 a month, sometimes more if I can afford it. My money market account will eventually be where I keep my emergency fund, though right now a lot of it is earmarked for my wedding.

If you've been keeping track, you'll have noticed that I have received or will receive a total of $172.30 simply by being an active saver. That figure doesn't even include interest.

So if you're not saving anything, I highly recommend a tiered approach:

(1) Open a simple brick & mortar savings account, linked to your checking. If your bank offers a program like Keep the Change, take advantage of it. If not, simply do it yourself. Once you get comfortable with the idea that, yes, you CAN leave that money alone, set up an automatic transfer, something small - even as little as $5 a month if that's what you can afford.

(2) Once you've gotten used to the idea of Leaving Your Money Alone (managing to get that first account up to $100 should just about do it) start transferring any amount over $100 in your first account into a less liquid, higher interest account. Set up a transfer that will scrape a little bit off of every paycheck, and again - start small if you have to.

(3) The time between steps two and three is significantly longer than between one and two, but once you've got $500 or so in a fairly liquid, high interest account, start funding an account that's harder to withdraw on. Anything over $500 in account #2, transfer to account #3. Try to fund it regularly, about once a month. I treat my $50 transfer just as I would any other bill, it's basically an invoice from Future Me.

As you open each account, shop around and try to find some sort of promotion, especially one that will earn you money if you leave your money alone.

Right now I'm sitting on $628.76, which comes out to about $104 a month since I started these accounts up from ZERO in late January / early February. It still might not seem like a lot until you remember that I flip burgers for a living. And I live in beautiful, oh-god-the-cost-of-living-is-so-high-here, Orange County, California. If I can find $100 a month, pretty much any single twenty-something year old with a steady job and low overhead can too.

There is a Such Thing as a Free Lunch!

2008-07-11T10:27:00.000-07:00

It's July eleventh or 7-11, which means participating 7-11s are giving away free slurpees! They're probably really small, but if you want you can hit up more than one and have a day of neverending slurpees.

Also, Chick-fil-a is giving away a free combo meal to customers who dress up like cows. A partial costume (t-shirt, hat) will get you a free entree. So if you're allright with walking into your local Chick-fil-a in a blue raspberry slurpee stained cow shirt, your lunch is on consumerism today.

Free Chicken and Slurpees. Enjoy!

Bare Bones Cash Flow Management, or Pay Your Frikkin' Bills On Time!

2008-07-07T15:57:00.000-07:00

When I first began to gain control of my finances, I meticulously tracked every single penny earned and penny spent. I didn't find any leaks in my spending that I didn't already know about, but I did learn to manage my cash flow. Before I learned to manage my cash flow, I always had the money to pay everything eventually but I spent a small fortune in late fees and I was never really sure just how much money I had at any given point. Rent was due when I got paid, dammit - not the first of the month! I couldn't very well pull money I didn't have yet out of a hat, could I?

Turns out, I could. I am going to say something now that might shock a few people:

If your total income is greater than your total expenses per month, you have no excuse not to pay your obligations on time.

If you get paid bi-weekly, sometimes your paycheck is going to come long before rent is due. "It's cool," you might think on the 22nd, "I get paid on the 5th - so I can just blow this check on whatever and pay rent on the 5th!" Of course, when your check comes on the 5th you spend every last cent of it on rent, and then you end up having to dig up beer bottles to redeem at the recycling center just so you can put the eensiest amount of gas in your car.

Not that I've ever done that or anything.

So here's a quick and dirty list of tips for getting your cash-flow awareness into shape:

(1) Track your spending and income meticulously for at least three months. If you care at all about getting your finances in order, you should be doing this anyway.

(2) Pay your bills on time. As in "when they're due" not "just in time to avoid disconnection."

(3) If the gas bill is $42 due on the 8th, you have $82 to your name, and you get paid on the 11th - you don't have $82. You have $40. Don't take your bank balance at face value. Consider what that balance must pay for and treat the upcoming expenses as checks you've already written, debits that cannot be avoided.

(4) Try to pay as many bills as possible the day you get paid. Get them out of the way so that you can't spend the money for your cell phone bill on a $50 bar tab or whathaveyou.

If you track your expenses while paying on time for two months or more, you'll begin to get a feel for when bills are due relative to your income schedule. You'll also be able to fairly accurately guesstimate the amount of every flexible bill. If you get out of the habit of spending your survival money on stuff you don't technically need, you can blow the extra. Or, you know, save some so that when you really don't have any money, you have a little something to fall back on.

Coming Soon: A kick-ass Cash Flow Tracker in spreadsheet form for everyone to download.

Ways to Break My Starbucks Addiction

2008-07-02T11:19:00.000-07:00

As much as I rail against buying Starbucks everyday, I have to admit that I'm often a complete sucker for them. I went to Starbucks the morning after my friend's 22nd birthday and we ordered the exact same drink, but somehow hers cost $1.15 more than mine and the two beverages together cost over $8.00. Ouch! There's also a Starbucks across from my work, and more than once I've wriggled myself into taking a longer break by picking up coffee for one or more of my bosses - sometimes this means they cover the cost of my overpriced coffee, sometimes it doesn't.

Anyway, my point is I love big cold coffee beverages in the summer. I finally switched from obnoxiously worded lattes to slightly sweetened iced coffee, and I couldn't tell the difference. The $2 less I was burning on such a silly item was nice too.

But after just a few weeks of switching to Iced Coffees, I found my Starbucks consumption right back where it was before. Sure, I've never spent TONS there to begin with, but switching to iced coffee was supposed to make the actual monetary hit hurt a little less. Instead, I just went more often because I could 'afford it' now.

Ugh!

Finally, I came up with a better solution. I've been getting up at 6:45 for class 4 days a week, so I need coffee - dammit. It's July in Southern California, so it's too darned hot for straight up brewed black coffee (which I actually prefer, most of the time). To feed my addiction I've taken to brewing coffee the night before and leaving it in the fridge to chill overnight. In the morning, I pour it into a portable cup with a little milk, ice and vanilla syrup (bought on sale at Target a while back).

There's a Starbucks on campus, and now I can walk right by it without being tempted!

Bean Counting or Goal Setting?

2008-06-12T16:17:00.000-07:00

I spent far more on dining out during the month of May than I'm comfortable with. My spending was still well within my means, but that $64 could have filled my gas tank 1.5 times. So why did I spend so much money dining out? To begin with, my time wasn't budgeted very well last month. I spent far less time pre-cooking food for the week than I normally would. I also spent less time at home, period.

But at the end of the day, I'm not killing myself over $64. I was asked in a comment recently if I simply try to beef up the numbers in my savings account, or if I have specific goals for saving. The answer is a little bit of both - but my primary goal is to live within my means without feeling as if I'm compromising my lifestyle. I make about $1400 a month in wages, and nearly 3/4 of that is taken up with rent & bills, so stretching those last few hundred dollars can prove to be something of a challenge.

Squirrelling away large chunks of my paychecks to fund travel, major purchases, and nowadays my wedding is a major priority. Being able to afford airline tickets without compromising my rent is a big one. Taking a two week trip to the east coast that I don't necessarily need to take (though I'm sure my grandmothers would beg to differ) isn't exactly in line with the extreme frugality that I often advocate. I encourage extreme frugality as a means to an end, not as a doctrine that should be followed simply to put money away for no specific reason.

I've found that quite a few young adults - myself included until a while ago - have extreme difficulty living within their means, much less saving anything. Burn Five's goal is to present as many different means of saving and as many different reasons for saving as possible, in the hopes that twentysomethings who stick their heads in the sand when it comes to their finances will be inspired to take control and stop living paycheck to paycheck.

Network Marketing, A Pyramid Scheme in Sheep's Clothing.

2008-06-11T13:15:00.000-07:00

A buddy of mine recently got involved in "Network Marketing," which looked to me to be just a fancy term for "pyramid scheme." After a while it became obvious that some people really do make money with "network marketing," but most of them had time, money, and resources to dedicate to it in the first place. After a few months of going back and forth with me (and probably a few of his other friends) my buddy realized that a 23 year old with limited resources wasn't likely to make a lot of money using "network marketing," at least not with the group he became involved in. Here's his story, along with some advice for how to better spend the money you might find yourself paying for the privilege to maybe make a lot of money.

I recently got involved with a network marketing or multi-level-marketing company called Pre-Paid Legal. At first, I thought it was awesome, and so cool to be a part of something awesome, and even have a lawyer at 23. However, as time went on I found out that there’s a lot of information that they don’t tell you, and now it is time for me to get out. I am not endorsing or denouncing network marketing. In theory, it does make sense and it can work but for people our age it tends not to work for the following two reasons:

People our age tend to not have the network or people around us that make network marketing so successful. A lot of the people that are successful at it were former real estate agents, attorneys, politicians, or well off business people. Basically, people with contacts already. Sure there are those people who started with nothing, and worked the system and became millionaires. Those people are truly rare, but the company spins it as an everyday occurrence.
We’re too distracted or too busy to really focus on it. Not only does network marketing take some money and energy to get started, but it also takes a substantial amount of time. There are meetings, trainings, and conference calls…every week. Not only are they every week, but you have to pay for them! Sure you can write it off because you have a home-based business, but it’s a hassle, and your time can be used more productively.

Don’t get me wrong, it’s a great way to make extra money if you really really want to work it, but for us there’s a lot of other things that we can do that are both enjoyable, and help us build our wealth. So, this post is dedicated to other things to do with that monthly fee and the time it takes to work the system, and here they are:

If you’ve read my previous post, you can probably guess what my first recommendation is going to be. Save, save, save! I have reached the point where if something happened to my job, I will be able to live for about 5 to 7 months depending on how I manage my money, and if I were to stop working tomorrow, I could keep up my current lifestyle for about 3 months. If I started with $36 and saved that $36 monthly fee over 1 year at an internet bank at say…3.00% interest, in one year I will have put in $432 dollars, and will have a total of $475 at the end of one year, gaining $7 in the process all for doing nothing.
Invest, invest, invest. Or at the very least start learning. Mutual funds and the stock market are such an untapped potential especially for twenty-somethings. I’ll elaborate on these two topics on a later post, but the bottom line is that they can return greater returns than a savings account. That $36 monthly fee can be used for some very nice books (don’t buy them full price, get them free on bookmooch, or at a discount on half.com or amazon), or opening up a brokerage or mutual fund account (Note: that some banks/brokers have a minimum balance that you must meet to open an account…maybe that’s even more of an incentive to SAVE!).
Take a personal finance class or basic investing class at your local community college. I’m not sure about you, but at Orange Coast College classes are $20/unit plus a health fee or administrative fee of some kind. Most of the basic financial classes are no more than 4 units, that’s about $80/class say…$90 with that health fee. That’s less than 3 months of a Pre-paid Legal membership, and I’m sure the knowledge there is a lot more valuable than what Pre-paid Legal offers at their trainings. I’m personally going back to school for a childhood dream, and I’m using some money that I would have spent on Pre-paid Legal for it.

A MacBook Air Is Going to Cost Me Four and Half Months of Wages

2008-06-05T12:41:00.000-07:00

I've touched on this before, in my article about spending $37 on a latte, and in my last post; my favorite way to control major impulse purchases is calculating just how many hours I'll have to work to pay for whatever it is I want.

I make $11.75 an hour, which after taxes and deductions is effectively $10.00 an hour. The luxury good that I currently covet the most is the new Star Trek: TNG entire series DVD set, which runs about $300 - $400. Now, I have a deep abiding fangirl love of Star Trek, but I don't love it enough to spend an entire week's wages on owning the entire series, especially since a year's worth of Netflix is $116.28 - a mere day or two of work.

Newly released CDs are about $10 (usually more), and there are very few artists that I love enough to spend an hour and half on. The same goes for DVDs, or video games. A tank of gas for my car is about $40 now. That's a half a day of work, and if that's not incentive to find ways to keep my gas mileage down, I don't know what is.

Even those of us with jobs we enjoy would probably rather have our days to ourselves than a timeclock to punch. When you consider purchases in terms of how many hours you've worked, many of your most coveted items lose their luster, and finding ways to cut down on your absolutely necessary expenses suddenly has a tangible trade off.

So the next time you're in Target/Best Buy/The Apple Store, hell, even Goodwill considering an impulse purchase, think to yourself two things: (1) Do I really need this? Or do I just want it? (2) If I just want it, is it really worth X hours of work?

Ctrl-Alt-Delete! or: Undoing an Impulse Buy

2008-06-03T09:37:00.000-07:00

My cell phone went completely haywire last night. The keypad was ignoring me, whenever the keypad would finally begin to respond - it would be interupted by an insistent prompt for me to speak a voicedial (I don't even use voice dial!). A creepy clickclickclickclick was coming from the speakers, punctuated by a prolonged beeeeeeeeeeeeep every minute or so.

I powered it on and off, removed the battery and replaced it, removed the SIM card and replaced it, left the phone alone for ten minutes, sang it a song, every quick fix I could think of. The phone remained posessed. Off to the the Cell Phone Provider Store I went.

Over the years, I've slowly upgraded my phones. The idea of downgrading is appalling to me, because I'm 23 and addicted to gadgets. I don't mine replacing my current model with another of the same, but I don't like to give up features I've become accustomed to. A weakness to be sure, but it's a weakness that only costs me every two years or so.

$121.62 later, I had one of those new-fangled music playin' phones. A Nokia whatever with red stripes and mp3 playing capability. Not all of my phone numbers were on my SIM card, so in what I thought was an exercise in futility, I put my SIM card back in my old phone, hoping the keypad would like me long enough for me to at least copy the numbers by hand. The keypad worked. It kept working. It's still working. Old Cell Phone is working just fine now.

Luckily I live in California and have thirty days to return the new phone. And to be honest, before I'd even attempted to use the seemingly broken Old Phone, it occurred to me that I'd really rather have $121.62, and that I should pop my SIM card into an Even Older Phone, and return the shiny new toy. Hopefully whatever technodemon posessed my old phone has been driven away for good- or at least until my contract's up and I qualify for a free phone. While I might try to rationalize the cool red stripey phone into a necessary purchase, it is NOT.

Dangit.

So how do I console myself, knowing that the shiny new toy is going back? Well:
$121.62 is enough to pay my cell phone bill. Twice.
$121.62 is about two and a half month's worth of car insurance.
Three tanks of gas.
About three guests at the wedding.
One month's energy bill.
Two month's groceries.

and the kicker?

Ten and a half hours of work. Before taxes.

Yeah, that thing is going back.

Giving Myself an Allowance

2008-05-30T09:58:00.000-07:00

I use an outdated copy of Microsoft Money to track my finances. It generates a lot of reports for me including a cashflow projector (which I use instead of a typical budget) and some really great spending reports. Month-end is almost here again so I've been poring over my reports. Out of curiosity I filtered out all unnecessary spending categories, just to see how much money I'd have saved over the course of three months if I could manage to radically cut my spending.

$2,622.62.

In THREE months. Mind you, that's after rent, bills, food, and gas. AFTER. I've known for a while now that if I could just figure out how to cut out frivolous spending and impulse buys, I'd be quite well off. I spend less than most of my peers, and I definitely save more than a lot of them, but I could be doing a lot better. I need to be doing a lot better.

More than once I've been told that I shouldn't fuss over every penny, and I do try not to get lost in the minutiae of every other little 3 cents. But I make about $1400 in a good month, so a certain amount of spending vigilance goes a long way for me.

Until I was about 16, I got an allowance of $7.50 every other week, which was enough to buy lunch at school. I could either pack a lunch, or pocket the money. I seem to recall having a fairly active social life and still having fun with my pocket change, so I'm going to attempt a grown-up version of the same.

Every paycheck, I'll get $20. I'm paid bi-weekly, so that $20 is my pocket money. If I blow it on beers at the bar, that's it until the next check. It will not roll over. If I have cash left over when my next paycheck comes, I'll only get enough cash to get the total back to $20. Except on days when I need to buy gas, I'll leave my debit and credit cards at home.

I already put away $125 or more a month, and if giving myself an allowance cuts my impulse spending the way I hope it will, I could potentially double, triple, or even quadruple that amount over the summer.

Dipping into My Savings

2008-05-28T15:55:00.000-07:00

Over the past few months I've gotten really good at socking money away. Next week, it's time to pay Fiance back for my half of our airfare to the east coast this summer and my half of the deposit on our wedding venue. The total is about $450. "Oh no!" I thought, going into a mild panic, "I'm going to have to dip into my savings!"

Until I remembered that the whole reason I began saving so aggressively in the first place was so that I'd be able to pull my weight with the wedding costs, and for us to visit my family on the east coast before the wedding.*

I'm fairly positive that this is the first time in my adult life that I've saved up for major purchases before making them. Before, it was my habit to just buy Whatever and figure out how to cover the costs later which resulted in a lot of nailbiting, overtime, and overdraft fees - not to mention unpaid bills, late rent, and searching the couch cushions for gas money.

Starting at age 18 and continuing (I imagine) until just before you die, there are a lot of "I'm a real grown-up now!" moments; buying a car, paying a bill, moving out, cooking your own dinner, getting married, buying a house, having kids - they run the gamut from seemingly mundane to obviously life-changing. I think putting a deposit down on a wedding venue with money I saved up for the cause is a pretty notable "I'm a grown-up!" moment.

To balance it out, I think I'm going to watch Star Wars while playing with Legos and gorging myself on sweets.

*and the Pacific Northwest.

Collegiate Level Dumpster Diving

2008-05-27T09:51:00.000-07:00

In Southern California, you don't have to physically dive into a dumpster to dumpster dive. People are constantly leaving furniture and appliances at the end of their driveways or just outside of dumpster areas in apartment complexes. People love to throw perfectly serviceable items away.

Last week Fiance and I went to a buddy's graduation at a small private university, and we discovered on accident that dorm dumpsters on move out day are pretty much treasure chests. There were 6+ couches, 2 or three futons, computers, monitors, televisions, printers, speakers, stereo systems, a keyboard (as in casio), fancy calculators, cds, dvds, clothes, laundry baskets, and probably a lot more. Had I not been in heels, I might have dug a little deeper into the pile of electronics. As it was, we came away with a TI-84 calculator (he's going to sell it on ebay), a printer-scanner combo (though we have 6 printers in this house, not one of them is my printer/scanner, which disappeared two apartments ago), a card for free frozen yogurt at Golden Spoon, a nice document organizer, a hole puncher, season one of the UK Version of The Office, and twenty four cents.

There were a few funny looks from the kids moving out, but really - if these kids are dumb enough to be throwing away hundreds of dollars worth of stuff, they're too stupid for me to care what they think of me. As usual, I'm somewhat mind-boggled by what people will just throw away. Even more disturbing was that a lot of this stuff had clearly been broken as it was discarded. Another printer/scanner combo had obviously just been chucked onto the concrete and shattered. Same thing with a television. The glass shards from both were all over the area (another reason I didn't dig too deep.) I can understand not wanting to schlep a television, or even just a printer, back to mom & dad's, but why destroy the thing when you throw it out?

Either way, I'm going to be making a point of swinging through the local universities at the beginning of summer from now on. I might never have to pay to replace a printer again. And maybe next year I'll nab season two of The Office.

Carnival of Personal Finance #154

2008-05-27T09:46:00.000-07:00

This week's Carnival of Personal Finance is up at The Canadian Dream: Free at 45!

My two favorite articles were:

Budgets are Sexy on the Four Stages You’ll Encounter during a “No Spending” Challenge.
Five Cent Nickel on The Social Acceptability of Frugality.

There are many more great posts though, so go check out the Carnival.

My Monthly Trade-Off: Extreme Frugality in One Area, Overspending in Another

2008-05-22T15:55:00.000-07:00

Every month, after most of my bills are paid, the groceries are bought and the last thing that I must pay for before the month ends is a tank of gas, I start reviewing my income and spending. It seems that every month I manage to scrimp and save in one area while I spend more in another. In April, I spent very little on food, but a ton on leisure and entertainment. In May so far, I've spent very little on leisure, more on food than usual, and quite a bit on travel (a weekend in San Diego for Fiance's birthday.)

I already save about 10% of my wages, and by month's end I've usually got some extra income that I can also throw into savings - I'm doing very well in that regard. If I exercised some serious self-discipline, I could easily be saving another two to three hundred a month. Most of my friends consider my ability to hang on to my money something of a feat, but I still look at my ledgers at the end of the month and think "Damn! I really shouldn't have spent $X on Y!"

At the end of the day where I spend and where I save in any given month comes down to a value judgement. In May it was "Do I want beers out at the bar & a bunch of new books or do I want to spend a nice weekend with my boyfriend in San Diego?" I chose San Diego, which turned out to be a great idea. In June, I'll be paying for my share of Fiance & I's plane tickets to North Carolina. I'm a displaced Southerner who hasn't been home in four years, so obviously my $266 round trip ticket is well worth drastically curbing my spending in another area.

As the trip to Carolina, the wedding, and eventually married life come closer, I'm sure I'll need to start exercising the willpower to be mega-frugal in more than one category at a time. So here's my game plan:

(1) Leave my debit and credit cards at home. I already leave my credit card at home most of the time, but unless I need to buy gas I really don't need to bring my debit card to work with me. Sometimes the Starbucks across the parking lot calls my name a little too loudly, especially on my morning shifts.

(2) Make sure I'm setting aside time to pre-cook meals and snacks. For the most part I'm pretty good about this, but this summer I'll be in one pretty intense 4 hours four days a week class, an online class, working full time, and planning a wedding. I won't be able to just throw something together when I feel like it. Also, I'm likely to be pretty stressed out. When I'm stressed I either stop eating altogether, or I overeat. If I've got healthy food readily available, I'll be less likely to cave and make a beeline for Chick-fil-a.

(3) Write notes to myself. For example "If you spend $30, you have to cross out one wedding guest!" or "You need this for RENT!" I'm so disciplined most of the time that I generally have $5-$25 to burn if I feel like it. I can sometimes be flippant about spending a little here and there. Most of the time I fight the urge off, but sometimes I fail. Hopefully having visual reminders in my purse, checkbook, and taped to my debit/credit cards will help.

(4) Keep Fiance in the Loop. The fact that he & I are fairly minimalist frugal mostly-vegetarians bodes well for our marriage. The more in the loop I keep him, the more he can help out by saying, "Ummm, honey are you sure you need ANOTHER wedding planning book?"

(5) Stay home more often. Just walking out of the door and starting up the car is spending money. If I stay home I can cook, keep my room organized, post to BurnFive, do surveys, tons of productive stuff- most of which will save or bring in money, as opposed to spending it.

Hopefully in June I'll be able to keep all unnecessary spending to a minimum, instead of just some of it.

For the Locals: Two Free Tickets to the Pacific Symphony!

2008-05-21T13:57:00.000-07:00

Not "click here to WIN two tickets," just straight up free tickets. Go on over to the Orange County's Pacific Symphony website, fill out the form, and you're good to go.

Turn your free tickets into a cheap but classy date (or girl's night or guy's night) by cooking a fancy meal at home and then going out for dessert.

I have no idea how long this giveaway will last.

Google Reader Starred Items Round-Up!

2008-05-20T12:51:00.000-07:00

I adore Google Reader. Here are some of the highlights from my starred personal finance item over the last month or so.

Want Some Extra Income? Try Odd Jobs! from The Digerati Life. A wonderful article on bringing in more income without losing your mind.

Are You and Ant or a Grasshopper? from Jason White at Wise Bread. I'm definitely a grasshopper turned ant.

What To Do With Your Economic Stimulus Payment (Or Any Found Money) from Consumerism Commentary. A shakedown of useful ways to spend windfalls.

Healthy, Frugal Eating by Philip Brewer at Wise Bread. "Every so often, I get hit in the face with two facts. First, Americans (even poor Americans) are unbelievably rich. Second, Americans (as a group) utterly lack a cultural tradition that teaches us how to eat a healthy, frugal diet."

10 Ways to Save Real Money from The Consumerist. The premier finance and consumer advocacy blog doles out some great advice on keeping your cash.

The Frugal Lifestyle: Are We Missing Out On Life? from Consumerism Commentary. Personally I'm a big fan of missing out on some things if it means I can go to Paris or not panic when my car breaks down.

Missing Money: Troll the Web for Abandoned and Unclaimed Property Owed to You from Consumerism Commentary again. After reading this article, I discovered that an old apartment management company owed me and my former roommates $475. Now if I can just gather the three other girls, we can cash the check and split the money.

Books For Every Level of Financial Acumen at SavingAdvice.com. A great list of books on personal finance. Many of these can be found at Goodwill, on Bookmooch, or online for cheap. Don't go broke building a personal finance library!

Carnival of Personal Finance #153

2008-05-19T12:21:00.001-07:00

This week's carnival is up at Money & Values. Tons of great articles, as usual. Go check it out!

The Battle of the Air Conditioner, or 5 Ways to Beat the Heat

2008-05-19T09:16:00.000-07:00

If you live in Southern California, the most painful bill to pay in the summer is the electricity bill- the dry heat out here is awful. The other day one of my roommates and I had the on/off battle of the air conditioner. She kept turning it on, I kept turning it off. To be fair, her room is on the second floor, covered in windows and has a ceiling fan way too high to actually circulate air around the room, it's pretty much a solar oven up there. But we live on a lake, so once you get the windows open and a fan that actually moves the air around, not so awful. What we really need are fans that will fit in the windows, especially in her room.

What struck me the most about our air conditioner battle (and I use the term battle loosely, we weren't really fighting), was that when we finally crossed paths I pointed out that running the AC would add up - our energy bill could easily be $100+ higher than the $120-$150 we've been cruising at for the past three months (for a four bedroom house with three adults and a kid in Southern California, mind you). Her response was "It's so hot, I don't care how much it costs!" She wasn't being a baby or anything, it was terribly hot yesterday- but because the rest of us are content to put on a tank top, open the windows and turn on a fan, we'd have been pretty bitter about that extra $100 on the power bill. I handed her the biggest fan in the house and sent her back upstairs with instructions to open her windows and crank the fans.

To be sure, there was a time in my life (about three apartments ago) when the cost of running an air conditioner didn't matter to me. Utility bills are one of the easiest ways to bleed money: running the AC at full blast because it's hot, using the dryer instead of hang drying clothing, running the dishwasher instead of just washing dishes by hand - it is very easy to disconnect from the actual cost of running an appliance if it makes our life easier.

I don't know about the rest of the world, but I'd rather keep the money in my pocket and take ten minutes to hang dry my clothes or three seconds to turn on a fan or open a window than pay an extra $100 a month in bills. To that end, here are a few tips to on keeping cool:

(1) Open your windows! When air can circulate through the house, it stays cooler. Use fans to help it along.
(2) Drink water! The more hydrated you are, the less hot you'll feel.
(3) Fill a spray bottle with water and keep it in the fridge. Every now and then, spritz yourself. This might actually be better than air conditioning.
(4) Fill up some water guns and go outside. Try not to run up your water bill too much, but having a water fight will cool you off considerably. The water bill will almost always be less than the power bill, even if you set up a Crocodile Mile for an afternoon.
(5) Wear less. Tank tops and shorts are your friends. Even if you're alabaster white like me, who cares? The fashion police probably won't beat down my door for wearing cut offs and a tank top around my home when it's 90+ degress outside. And who cares if they do?

Vegas Will Probably Begin To Look Good Soon

2008-05-14T09:29:00.000-07:00

Sorry for the lack of posts this week. I got engaged on Friday and I'm in the "OHMIGOD I'm going get married!!!" phase. Luckily, I knew it was coming (though he still managed to surprise me with the proposal). I set aside a little money and a ton of bookmooch points for when I finally had a ring on my finger. I've got about 11 books and 2 planners now - all for less than $20. The initial "ohmigod I need books!" phase could have easily run me more than $100 had I just waltzed into Borders and bought out the Wedding section.

Now, of course, it's time to start figuring out how on earth we're going to have a big wedding in Southern California without going into debt. Folks have suggested to me that I could have "something, small. Wouldn't that be cute and inexpensive?" To that all I can say is "Have you met me?" - I'm not really the small wedding type. So over the next year I'm going to have to figure out how to balance the scale of the wedding with the size of our budget. Yikes.

We've already determined that our biggest priority is Not Cutting the Guest List. And I know for a fact that I won't be spending $1000+ on my gown alone (it frightens me that people do this!), though how I'm going to go about keeping those expenses low I'm not sure yet. We're lucky that we've got six (2 from him, 4 from me) supportive parents who will be helping us offset some of the costs, and I've got my obsessively organized younger sister as the Maid of Honor - no need for an overly particular wedding consultant with her around! Still, most of the expenses will be covered by Fiance & I. Yikes.

Carnival of Personal Finance #152

2008-05-13T10:38:00.000-07:00

Money Under 30 hosted Carnival of Personal Finance this week and included my price book post. Here are the editor's picks from this week's carnival!

* You Don’t Need That! 8 Tricks for Impulse Control
* 10 Steps to Avoid Becoming a Millionaire
* From a Yield of -99.79% to +9.99% This Year So Far
* The Problem of Accounting and Budgeting For Cash Expenses
* Are You Ready for a Disaster?

I Was the Last to See Juno...

2008-05-09T07:30:00.000-07:00

Possibly the most difficult aspect of living within my means is controlling my impulse buys. After years of not policing myself at all, I find myself in a position where I can got out to dinner and a new release movie AND drinks afterward if I so chose, and I do sometimes. The catch is that I now find myself honestly distressed when I know I've paid too much for something. Roommates, Boyfriend and I went to see a movie a week or so ago, and even with a student discount my ticket was $10. I could have seen THREE movies at the second run theater with that. I try not to think about it.

If I'm out running errands and I find myself getting hungry, I might buy a muffin or something. I can certainly afford this, but again - knowing that I could have made at least 6 muffins at home for the price of one bought ready-made? Totally stresses me out. When I go out the the bar and order a $3 (plus $1 for tip!) beer, all I can think about is how that's half a six pack.

This fussiness extends to those around me too. When I see someone paying more for something than they have to, I feel my bossypants-know-it-all tendencies beginning to twitch. Most of the time I keep my mouth shut, but sometimes I can't help but blurt out "Oh my god! You could have gotten that for at LEAST $5 less!"

But even though these purchases stress me out, I still find myself making them from time to time. Luckily most of my impulse buys are well under $20 (most are $10 or less), and I don't make too many of them. I might spend an unplanned $10 a week, usually on entertainment/books/beer. That's $520 a year!

Even if I'm still making impulse buys, I try to be certain that I'm getting the most for my money. When I talk about trying to slash my spending there are folks who laugh at me, but to be honest I'd rather spend $9 on a six pack and a second run movie theater ticket than $15+ on a beer in a bar and a new release movie ticket. If I'm going to spend $520 a year on entertainment - I better have been entertained as much as possible, dangit.

A Universal Casserole Recipe

2008-05-08T09:12:00.000-07:00

In The Tightwad Gazette III, Amy Dacycyzyn gives a universal casserole recipe, sent in by one of her readers.

Universal Casserole Recipe
1 cup main ingredient
1 cup second ingredient
1-2 cups starchy ingredient
1.5 cups binder
.25 cup "goodies"
seasoning
topping

She suggested mostly meats for the main ingredient (tuna, chicken, turkey, ham, seafood), but you could also use vegetarian options: kidney beans, tofu, even veggie dogs. Her suggestions for a second ingredient were celery, mushrooms, peas, & chopped hard boiled eggs, but this could really be anything. Starchy ingredients could be potatoes, noodles or rice. Suggested binders are soup or sour cream. Mix your ingredients, place the mixture in a casserole dish and then bake at 350 degrees for 30 - 45 minutes.

My favorite variation on this is what I call Quasi Jambalaya Casserole (emphasis on the quasi). The main ingredient is a combination of shrimp/chicken/sausage, the second ingredient is a combo of diced tomatoes/celery. My starchy ingredient, rice. I usually use a combo of tomato sauce and sour cream as the binder. I season it with cayenne, paprika, thyme, oregano, some onion powder, and a pinch of ground bay leaves. For the topping, I'll make a small batch of biscuit dough or cornbread batter and spoon it over the top.

It's fairly easy to take this universal recipe and use up your leftovers or random packages of food given to you by sympathetic parents/teachers/neighbors. Heck sometimes you just have random food sitting around - a casserole is a great way to make sure those foods don't go to waste.

Knowing how to make a casserole might not make you hip (in fact, it might be one of those things that officially qualifies you as an adult on some level), but it'll definitely use up the last chicken breast and the last bit of that package of frozen cauliflower you'd completely forgotten about until it resurfaced on top of the ice cream. It's a perfect cheap meal for weeks when the bills swing your bank account just a little too close to zero for comfort.

Save a Ton on Food with a Price Book!

2008-05-06T10:59:00.000-07:00

In April, I started putting together the beginnings of a price book for grocery shopping. I recorded the lowest price per unit for every item I might need to buy in May at three different stores, two near my house and one near my work. Buy researching prices before I shopped, saved anywhere from 5 cents to over a dollar per unit on nearly every item. My May shopping haul should keep my basics stocked for a month or more.

To make your own, make a list of the items you buy the most often (save your grocery receipts to help figure this out). Make a seperate list for each store you plan to shop at. Record the price of the item, the weight, and the price per unit of weight. For items like bagels, use 'bagel' as the unit of measure. Sometime packaging can be tricky, a 10 pound bag of flour might cost more per pound than buying two 5 pound bags. Buying items based on unit cost rather than total price gets you far more for your money. By the same token, buying TOO much of something because it's cheaper per unit can be a bad idea if you won't use up the item before it expires. Once I gather the data, I use Excel to sort it; first by item, then by unit price.

I did my shopping last week using my price book. I was able to reference it when confronted with a sale price - even though cheese might be 25% off at one store, its everyday price might be still lower than that at another store. If a price went up between my price survey and my actual shopping day, I could use my list to determine whether to go ahead and buy the item or if I should wait and buy it for less at the next store.

The cost in gas was probably negligible, Fresh & Easy and Stater Brothers are less than five miles from my house and Food 4 Less is less than a mile from work. Eventually I'm going to see if the money I save comparison shopping is negated by the gas mileage I use by shopping at three different stores. I've got a sneaking feeling that I'm still saving money.

My impulse buy was three 10 packs of Jalapeno & Cilantro Tortillas at Fresh & Easy. They were marked down and 50% off, making them not too much more than a 30 pack of plain flour tortillas at Food 4 Less. This came out to about a $1 splurge. Even though I bought a slightly more expensive item, my price book told me just exactly how much more I was spending.

The initial gathering of price data for a price book can be a pain in the butt, but once you've gotten it once, you can keep it updated using your grocery receipts. It may seem like a lot of work, but when you make $1400 a month, every little bit counts!

Carnival of Personal Finance #151

2008-05-05T17:40:00.000-07:00

I'm in again! Check it out at Alpha Consumer.

The Spice Must Flow

2008-05-05T08:58:00.000-07:00

Once you've acquired some cooking equipment, a cookbook you like, and you've gotten used to the idea that sometimes you're going to have to clean up after other people, you'll want to start stocking up on some essential ingredients, specifically- spices. The 'spice rack' in my first apartment was salt, pepper, lawry's seasoning salt, jambalaya mix, and unused ramen flavor packets. Yikes.

A spice rack doesn't need to be gorgeous or full of Every Spice Ever. I keep mine stocked with the spices I use most often, and I buy spices I might need only once or twice in very small quantities. Here's the list of essential spices for my kitchen, yours might be different, and it might evolve as time goes on. More seasoned cooks might look at might list and say, "OHMIGOD! You skipped _____!" But remember, this isn't about how to be a gourmet cook, it's about how to cook pretty well for a fraction of what you might be spending on eating out.

Salt
Black Pepper
Cumin (a must for me, I put cumin in nearly every soup I make)
Paprika
Cayenne
Basil (I usually use fresh basil from the container garden, but I do have a stash of the dried stuff)
Oregano
Bay Leaves
Thyme
Dill (I usually buy it fresh instead of dried)
Cilantro (I generally use it fresh from my garden, but you can keep dried cilantro [coriander] on hand just in case)
Ginger
Allspice
Cinnamon
Ground Cloves
Ground Nutmeg
Onion Powder
Garlic Powder

I don't recommend buying spice mixtures (chili powder, taco seasoning, pumpkin pie spice), as most of these are simply combinations of other spices (which is another post). I can make just about anything I want with the spices on this list, though I'm sure that the more I cook- the bigger my spice rack will get.

Buy a spice rack with empty jars and then fill the jars with spices. Buying pre-jarred spices is insanely expensive (not to mention really cluttery after a while), try buying them in bulk or in bags. If you live in California, Stater Brothers has bagged spices (brand: Sunripe) that are generally $2 or less, and much cheaper per ounce than the stuff in jars. Try the ethnic foods aisle, or an ethnic grocery store. If you can't find anything but over-priced pre jarred spices, try googling "mail order spices."

I sometimes see unopened, well stocked spice racks at Goodwill, obvious wedding gift cast offs. Obviously if you score one of these, double check the jars to be sure all safety seals are intact before you eat any of it.

April Income/Expense Report

2008-05-01T08:15:00.000-07:00

Here it is, my monthly cashflow report. This month was something of a success - I knew going in that my income was going to be significantly lower. I also knew going in that I wanted to throw a barbeque, do my lemon tree project, and pay for a night out to dinner for Boyfriend & I - I managed to do all of those things and sock more into savings than any other month this year. Not buying groceries (save for some stuff for the bbq, some of which is in the freezer for next time) helped, and so did very careful tracking of my expenses. Here's a side-by-side income/expense category comparison between March & April.

The bills category includes my rent, and almost all of our utilities were lower this month, except electricity which went up a few bucks. I spent far more on leisure than usual - throwing the bbq, Boyfriend's band played a few shows (I donated to one venue and drank a beer at two others), and going to a wide release movie (even with a student-priced ticket I was reminded of why I almost never see just-released movies.) Gas prices having been shooting up insanely, so my auto expenses were higher. My ebay seller fees for March came due in April, so I wound up spending a bit more there as well. But for the most part, spending was down in every category and $192.50 of that went into savings. Looking back on April, I definitely could have put at least $50 more away, but I'm still pretty pleased with how I did.

My goal for May is to keep excess spending to a minimum. Aside from Boyfriend's birthday (we're taking a short jaunt to San Diego), I want to spend a little as possible on leisure activities. My grocery shopping shouldn't hurt too badly (I'm 2/3 done and I've only spent about $31.) I want to put at least $200 into savings in May as well. Most of my income will come from my wages, I expect much less from other sources this month. Well, aside from the government, and most of that rebate check is going to be socked away like I never got it.

The No Groceries Experiment Wrap Up

2008-04-30T12:41:00.000-07:00

At the beginning of April, I decided that I didn't want to be working until 2 am two to three nights a week this month. (I have to work pretty late if I want to make $1400 a month, other wise I make about $1100-1200.) When I reviewed my March spending, I realized that I'd spent upwards of $200 on groceries. Yikes! I feed myself and my boyfriend when he comes over, and I try to keep the household items in stock (we share buying duty on eggs, cheese, sour cream, other baking needs - the stuff we all use), but spending $200 in one month was just to much for me. So I decided that I wouldn't grocery shop in April. I cooked all of my at-home meals from food I'd already bought. I ate very well, and I've STILL got stuff left over.

As the month went on, I began to gain a solid picture of just how often I need to cook up a batch of soup (about 5 times a month), or how often I need to make a batch of cookies that will keep my sweet tooth from spending money on candy bars (about once a week). I drank coffee, tea, lemonade, and beer. I don't drink soda outside of work anyway, but if you're a soda addict perhaps you could switch to at least a cheaper, if still sugary, alternative.

Along the way I've gotten a better idea of what ingredients I need to actually buy. Too often I'd just head into the store with a vague idea of what I might be out of and I'd shop without a real plan. By the middle of April, I was able to put together a fairly comprehensive list of what I need to buy to eat happily. I'm sure there are still items missing, but for now- it works. I took the time that I might normally have gone to the store to shop and, using my list, I've begun to put together a pricebook, noting what items sells for the cheapest (per unit) and where, an activity that should save me at least $100 over the course of a year, if not more.

Once I've finished the shopping necessary to re-stock my supplies, I'll write a detailed post of how the pricebook project works out. And in May I'll be posting basic recipe templates that you can adapt for whatever ingredients you have on hand, as well as a guide to figuring out what YOU need to shop for to eat well, and how to save money doing it.

This Week's Festival of Frugality

2008-04-30T01:21:00.000-07:00

...is up at Sound Money Matters. I'll be posting my favorite articles from this edition tomorrow.

Carnival of Personal Finance #150

2008-04-28T12:49:00.000-07:00

Lazy Man and Money hosts this week, here are my three favorites (of 115 articles!)

The Digerati Life presents 20 Ways To Earn More and Spend Less: Steps To Becoming A Frugal Capitalist.

Think You Way to Wealth exposes some of the Lies We Tell Ourselves While Spending Money.

No Credit Needed says The $100-A-Day-Rule Prevents Impulse Buying.

You're NOT Homeless!

2008-04-28T12:00:00.000-07:00

Are you carrying your worldly possessions around in plastic bags, sleeping in parks and begging for money? Probably not, but a lot of twentysomethings seem obsessed with the romance of feeling like they're one missed paycheck from poverty.

Nearly everyone I talk to about saving money insists that they just "can't!" Apparently, quite a few of my peers believe they are so destitute that every cent of every paycheck must go to their bills and basic survival costs. But if you're eating out more than once a week (I try to only eat out once a month!) or if you're not finding ways to save on your groceries, or if you're throwing money out into the ether that ought to be going toward your bills...well you're not living to paycheck to paycheck because you're poor. You're living paycheck to paycheck because you have no control over your money. Even if you're trying to control your spending in little ways, unless you're looking at the big picture, you've probably sprung a leak somewhere in your finances and you can't plug it because you don't know where it is.

Here's the thing about being in our twenties, we've got time on our side. I make $1400 a month in wages (and that's if I'm working myself like a dog), but I'm putting at least some of that away. I may not have loads of cool stuff or a fancy car, but in a few years when I want to buy a house I'm going to be better off than a 35 year old making six figures a year, who has saved nothing because he's 'poor.'

Very few of us are actually poor. We could easily start socking away $20 or less a month. When it comes to saving, just putting yourself in the habit of putting something away is more important than how much you put away. Many of us are unhealthily attached to the martyrdom of "I'm so BROKE!" We see it almost as a badge of honor and we actually want to cling to that. It's our best excuse to not do better for ourselves.

Feeling like a financial martyr means that you don't have to really work at saving money, because broke is what you do. In fact, it's what you are. But who wants to be a charity case? I truly believe that unless you are honestly destitute, you can find $10-$20 a month to put in a savings account. Many will argue that there's no point to putting such a small amount away, and many others will have a hard time leaving the money alone, but as with any other behavior that requires self discipline to implement, starting small is the easiest way to start.

Stimulus Rebates Coming Early!

2008-04-25T01:44:00.000-07:00

That money the government's just GIVING us? We're getting it early.

Check it out: Tax rebates to start arriving Monday !

I'm sticking almost all of mine into savings, of course. Screw mindless consumerism in the name of the economy!

Financial Doublethink: A Rambling Rant

2008-04-24T12:15:00.000-07:00

From the Irvine Housing Blog (not as boring as it sounds, I swear!):
Southern California's Cultural Pathology

I read this article about a year ago, and while I'm not in the housing market at the moment (and very few people my age are) - the basic premise that consumers are convinced that opposing ideas about money are true most definitely applies to young people.

While we're not overextending ourselves on mortgages, we are overextending ourselves in other ways. In Southern California, it's not uncommon to see a 22 year old driving a new BMW. Some of those kids are driving a gift from their parents, but most of them put that machine on credit. I don't presume to know the income of every 22 year old in a BMW, but I'd place a pretty hefty bet that quite a few of them are slaves to their car payment and wish they'd bought a Toyota. I believe that the idea of cultural pathology extends to debt denial too. There are people who are literally a thousand or more dollars in debt but are raising money for massive unnecessary purchases, as opposed to pulling themselves out of debt.

I was about $600+ into overdraft three years ago. I stopped using the bank I was with at the time and began doing everything in cash. I still had a decent amount of savings in an online bank, but with no brick & mortar bank to transfer it to, I couldn't get at it very easily (thank god). I did everything in cash, and I bought $300 purses and $180 shoes and $200 jackets. I could have easily brought my bank account back into the black, but instead I blew my hard-earned money on stuff that I'd decided I deserved, dammit. Three years later, I'm back 'on the grid' so to speak, but with a NASTY dent on my credit report. And I pretty much never carry that purse.

The financial doublethink of young people never ceases to amaze me. The fact that many of us do not grow out of it and end up tens of thousands of dollars in debt completely mindboggles me. People (including me at one point) who are totally broke will buy iPhones or Disneyland passes or new laptops or daily Starbucks. And then they complain of being "too broke!" Well, of course you're broke, you just spent all your money! But the "I'm broke!" and the "I want an iPhone!" wires never seem to cross.

Having a flashy car, a fancy iPhone, 18 Coach bags, annual passes to every theme park ever, drinking Starbucks every day and a pony will NOT make you financially stable. It'll make you look like you spent a lot of money. Looking like you spent a lot of money will NOT help you if you find yourself in a an emergency situation with no savings. Nothing is more degrading than having to go around begging your friends for money when your car breaks down. Plus they're going to wonder why you can't fix it yourself, since you've obviously got a lot of money to burn...

I'm not saying that people should never ever indulge a whim or a want. You've got to have little fun every now and then. If you're splurging on a tub of ice cream or (god forbid) a wide release new movie or even the occasional latte, you're probably not compromising your financial security too much. But if you're spending hundreds of dollars on items not necessary to your survival and ignoring your debt like it's not there, that's a purchase that could probably use some re-thinking.

Make Yourself a Windfall

2008-04-23T09:24:00.000-07:00

If the fact that you need to save your money finally hits home and simply cutting back isn't giving you very much to save, sometimes it's easier to bring in a little extra money and toss that in savings. Once you've got a little bit in the bank, that little balance can become an inspiration to start finding more ways to save. While creating a steady second stream of income can be difficult in your twenties, it's not terribly hard to make a little extra here and there. Here are 9 ideas that can bring in a little extra cash.

Your Day Job : If possible, pick up some hours at work. Not many, maybe just two to six hours. If you get paid two hours more than you usually would, bank the extra.
Ebay: This one is obvious. Dig through your closets and see if you've got something that might be valuable to someone else.
Half.com: I list this one seperately from ebay, because the income is a little more passive. Listings last until an item is sold, and you don't need to worry about making sure your seller fees are paid. Simply wait until someone buys the item, ship it, and wait for the money to show up in your bank account.
Etsy.com: If you're crafty, whip up a batch of cute pillows or wallets or whathaveyou and list em for sale.
Have a yard sale: If you don't have a yard, ask your parents (or someone else's parents) if they'd be willing to let you borrow their lawn in exchange for a free grass mowing.
Get Paid To sites: Sign up for a survey site and diligently click those buttons and confirm paid emails. Try not to get too sucked into "free" trials with a high payout. If you spend less than two minutes doing one or two surveys a day, you'll eventually hit a payout worth at least a tank of gas.
Domestic Services: Offer yourself up as a part-time house cleaner, nanny, or gardener. Or post an ad on craigslist offering to help someone move. (Try Saturday morning, ask for $20-$60, more if you have a truck.)
Sell Some Food: If you get fairly good at cooking, find one of your under or badly nourished friends and offer to make them dinner for a week. Make something easy to re-heat and charge them less than the drive-thru lane.
Have a Car Wash/Maintenance Party: Offer to wash your friends' cars and/or change their oil. Set yourself up on a Saturday (with a partner), charge less than Jiffy Lube.

You could also get a second job, but if you're not really interested in working 60+ hours a week, then creating the occasional small windfall for yourself is probably a better plan. There's still no substitute for cutting back on the crap you dont need and living within your means, but if you're used to an over-the-top, ultra-consumerist lifestyle then living more frugally is going to be tough for you at first. In that case, taking some baby steps toward spending less and finding a non-stressful way to make a little extra cash might be the best way to get started.

The No-Groceries Experiment Update #2

2008-04-22T13:47:00.000-07:00

I've still yet to buy proper groceries this month, though I have purchased these items from the grocery store: a pint of ice cream (bought instead of buying cones at a store), a muffin and a cheese stick ($1.32 breakfast instead of eating out), and some burgers/hot dogs + buns and beer for a barbeque. My day to day meals continue to be made from my pantry. Since my last update I've eaten:

Vegetarian Chili
Lentil Soup
Ginger Snaps
Burritos (with Pinto Beans and Rice w/ Cilantro)
Farina (Cream of Wheat)
Ginger Snaps
Coffee
Iced Tea
Lemonade (made from real lemons! In California, the law is that if a tree's fruit is hanging over public space, you can pick some. I wouldn't make a habit of harvesting sidewalk lemons, but homemade lemonade is tasty!)
+burgers at work.

Today I've got garbanzo bean stew cooking in the crockpot (a tasty stew whose leftovers can be turned into almost-falafel), I'll be baking a batch of pumpkin muffins using pumpkin pulp leftover from Thanksgiving (yay for freezers), and dinner will probably be pasta with lentil-tomato sauce.

I'm beginning to put together a Master List of just what I need to buy in order to eat well. Obviously, not everyone will be content with legume soup/stew in the quantities I eat it in, but having been raised quasi-vegetarian it doesn't bother me at all. In fact, I much prefer tons of homemade stews and soups to anything made from a package. I definitely feel as if I'm eating healthier this month, my "meals" at work notwithstanding.

More and more I'm looking forward to writing my analysis of this whole experiment in a week or two. Before the massive shopping trip I'll need to do at the beginning of May, I'll be putting together a price book in order to be certain I'm getting the best deals possible, but more on that in another post.

Festival of Frugality #122

2008-04-22T12:39:00.000-07:00

The Festival of Frugality is up at On Financial Success. Thanks to Aaron for hosting!

Carnival of Personal Finance #149

2008-04-21T09:29:00.000-07:00

My post on emergency funds was chosen as an editor's pick in the Carnival of Personal Finance hosted at The Happy Rock this week. There are a ton of great articles- here are my picks for you guys.

Greener Pastures discusses the impulse buy in The Psychology of Money-”I Have to Have It”-The Impulse Purchase.
The Personal Financier presents How to Make Saving More Rewarding and Tangible: 5 Practical Tips.
Living the Cheap Life runs the numbers on retiring well with a fast-food income in How to work at McDonald’s and retire rich.
Cash Money Life reminds us that Spending Money is Good. (Though I might amend that to say "Spending Money Once You've Saved It is Good.")

Why Brick & Mortar Savings Accounts Suck

2008-04-21T07:30:00.000-07:00

Note: In any other personal finance blog this post might seem too obvious, a useless rehash of an old tenet. But here at burnfive.com I'm assuming that sometimes my readers aren't aware of what might be a big fat 'duh' to people who've been studying personal finance for a while.

Your savings account probably isn't giving you nearly as much money as it ought to be, especially if it's held at the same walk-in (brick & mortar) bank as your checking account. Nearly all brick & mortar banks have dismally low interest rates on their savings accounts. We're talking less than 1%. For example, Washington Mutual's Regular Savings Account? A puny .25%. Nearly all online savings accounts start at 2.0% or more. You're lucky to earn a nickel a month keeping your savings in a brick & mortar bank, but with an online savings account you can get a much greater return on the same amount of savings.

What blows my mind is the sheer amount of people my age who don't realize they could (and should) be earning a much greater return on their cash. Then again, most of them aren't really saving anything either. But once you've started to stash money away (and keep it stashed) - you should be earning the highest return possible while still keeping some of your savings easily accessible for emergencies.

$100 kept in a traditional brick & mortar bank savings account at .25% will earn a quarter in a year. $100 kept in an online savings account with 2.5% interest will earn $2.50 in a year. Granted that's not a load of cash, but it's still money that you don't have to work for. Those earnings go up if you're constantly adding more money to your savings. Here's a simple calculator you can play with to find out how much interest you could potentially earn if you can find some money to squirrel away.

A potential downside to online savings accounts is that it may take longer for your money to get back into your liquid accounts, should you need it. But for me, that's a blessing. When my money is harder to access, it makes it easier to only use it in the case of a true need.

I've used ING Direct for 4 years, and they're one of the most beloved online banks that I know of. They generally offer one of the most competitive interest rates around (3.0% as of 4/20/2008) , and they've got a great referral program: you refer a friend, they fund a savings account with $250 - you get $25, and they get $10. Even if your friend then turns around and withdraws all of his or her savings back into another account, the $25 & $10 are yours/theirs to keep. I've got plenty of referrals, if you've got some savings ($250 or more) and you want to earn a higher return on them, email me and I'll send you a referral.

Take a good look at your account disclosures. Are you earning less than a 1% return on your savings? If so, get your money into an account that will pay you! Even if you choose a bank other than ING, I cannot emphasize enough the importance of a good interest rate- money you don't have to work for is the best kind of money.

One Month Old

2008-04-18T07:30:00.001-07:00

Believe it or not, You Might as Well Burn $5! is one month old today! Thank you to everyone who's been reading since day one, and of course thank you to everyone who 's joined along the way. Thanks also to Scott for buying http://www.burnfive.com. This blog has been far more successful than I imagined, and I'm hoping to continue to build upon that- bringing you even better researched articles and useful tips.

YMaWB$5 has received over 700 hits since March 18th, with individual pageviews of 1000+. Hits have come from 23 different countries and from 46 of the 50 U.S. states. According to Google Analytics, this little blog is performing leaps and bounds better than blogs of a similar size.

So, thank you to everyone.

I've had a lot of ideas for posts thrown at me since I began writing, but now I'm asking for a comment roll-call. What would you guys like to see in the coming months? Leave me a comment and keep reading!

Saving Time & Money on Laundry

2008-04-17T07:30:00.000-07:00

Most 20-somethings probably don't live in apartments with in-unit laundry facilities. Some are lucky enough to have on-site laundry rooms, but those machines are often pretty expensive and a lot of them require the use of a pre-paid card. Even then, going to the laundrymat is often cheaper than using the complex's facilities.

Here are a few ways to save money & time on your laundry:

(1) If you use a laundry mat, only use it for washing. Pile the clothes neatly in their baskets (or bags), then take them home and line dry them. You'll spend less time sitting around the laundry mat, and you can keep all those quarters. If you're one of the lucky few to have a washer/dryer in unit, you should still line dry to save on utility bills.

(2) Do your laundry at your parents' house. Until my parents up and moved to England a year ago, I showed up Monday nights to watch Heroes and do my laundry. This might only work if you like your parents.

(3) If you've got a friend with a washer/dryer offer a trade. You could offer to clean something at their place, cook dinner, or to buy their laundry detergent. This one's also a great excuse to hang out with friends for a couple of hours.

(4) Combine laundrymat trips with a similarly laundry-disabled friend. Combine your loads and wash them together. You can save money and be less bored than you would be hanging around a laundry mat by yourself.

(5) Don't use too much detergent.

This post was inspired by Shawna of bumblef**cked.com.

How to Buy More Money

2008-04-16T13:13:00.000-07:00

Here's a novel way to save some cash: buy someone's unwanted giftcard. Often you can find giftcards to any number of grocery, drug, or household stores for sale at a discount. And if you've planned ahead to shop during a sale, you stand to save a lot of money.

Check out swapagift or cardavenue to search for cards. You could also make an ad on craigslist (or post a myspace bulletin or a facebook note) offering to buy unwanted gift cards. Most gift card sites also offer the option to trade, so if your grandma gets you a Macy's card, but you're wise enough to be buying well-made clothing secondhand, you could swap the card out for a merchant with a little more utility.

Just be sure that you don't start blowing money on random giftcards that you don't need. For example, I've got some gardening projects coming up- so I'm hoping to offset costs by researching sales at Lowe's/Home Depot and then buying a gift card at a discount. When this month is over and I'm back to grocery shopping, I might try to buy a costco giftcard, so that I can buy baking supplies in bulk AND receive the built-in discount of having bought an $80 gift card for $70 or less. But I'm certainly not going to buy a $200 Nordstrom's card for $180.

Buying gift cards at a discount is also a great way to save on gift-giving. Not that you should encourage anyone's Starbucks habit, but if you really want to get someone a Starbucks card, might as well save some money on it, right?

Festival of Frugality #121

2008-04-15T08:07:00.000-07:00

This week's Festival of Frugality was hosted by Kyle over at Rather be Shopping. Here are my picks from all the great articles featured:

New Old-Fashioned Gal goes on a Consumption Diet.

The Digerati Life presents Frugal Tips: How to Make 10 Ordinary Things Last Longer.

Campus Grotto dicusses how to Rent Textbooks.

Go check out the festival for more great reads!

What If Rent Was Already in the Bank?

2008-04-14T02:19:00.000-07:00

Pretty much every financial book ever starts off with "Why You Need an Emergency Fund", generally about three month's salary or six-plus months of living expenses all stashed in a fairly liquid, but high interest account. Most of them also say that you should build this fund at all costs; take on a second job, sell something, whatever. I think an emergency fund is an entirely different beast if you're younger than 27. It's still a necessity, but our emergency funds can be a lot lower than 3 months salary. I'm not saying you should scrap the goal of ever having 3 month's salary stashed away, but if you start building a smaller emergency fund at a younger age, you don't need to flip out trying to put away $9000 or more when you're 30+.

First of all, we need a more concrete emergency to save for, an exact number. Busting your ass to save X thousand dollars doesn't feel like a goal, it feels like a chore- especially when you're used to living paycheck-to-paycheck. Anyone just beginning to become financially stable is likely to feel overwhelmed by the sheer amount to be saved if they go the three-months-salary route. I suggest that instead of randomly saving to reach an unspecified quadruple digit goal, begin with saving a backup of your most consistent, necessary expenses.

The obvious starting place for an emergency fund is rent. Just your rent, that check you start freaking out over on the 28th. If you can manage to have one month's rent stashed away, think about all the peace of mind you've got. Sick and can't work for a day or two? You're covered! Finals coming up? Take a day or two off to study. Most of us could have a month's worth of rent saved up after 3 months or so if we cut out some of our more frivolous purchases.

After rent, a month's worth of bills is the next obvious step. Sit down and calculate exactly how much you spend on bills every month. Spend a month or two focusing on adding that amount plus a little cushion to your fund.

Once you've got a month's worth of rent & bills stashed away, the next obvious necessity (for me, at least) is food. Figure out the minimum you need to eat decently for a month, double that- and work toward adding it to your fund.

My next step would be gasoline, but yours might be different. Instead of slaving away at a second job trying to save thousands, why not pick a series of smaller, more concrete goals and reach them by keeping your money instead of desperately trying to earn or find more when bills come due? Once you've saved up a month's worth of rent, bills, food, & gasoline...why not tack on another month's rent? After a while you'll have a few thousand dollars stashed away, earning interest, and you'll never have to panic about getting your rent in on time when you've lost income.

For some great tips on how to find money to put in your fledgling emergency fund, check out 50 Tips to Help Establish Your Emergency Fund at Consumerism Commentary.

You've Got Less Than Five Days, Kids...

2008-04-11T07:30:00.000-07:00

It's April 11th. Why haven't you filed your taxes? If you have, well done. If you filed and you gave away some of your money for a refund loan, shame! It took less than 10 days for my refund to be direct deposited into my bank account in January. My state refund took even less time. Don't give away your money!

Did you make less than $54,000 last year? If you're reading this blog, chances are you did. Did you know that you qualify to file your taxes online for free? I used used H&R Block's Taxcut Free File (other companies are available) to file my federal return & the CA Franchise Tax Board's CalFile for my state return. If you're not in California, find the website for your state's tax board, chances are you can file for free through them.

I'm sure everyone's heard the buzz about the Economic Stimulus Rebate. What you may not know is that you'll receive it faster if you opt to receive your refund via direct deposit. If you haven't filed yet, make sure you choose to have your refund direct deposited, that way your stimulus rebate will be direct deposited as well, and you'll receive it earlier.

Once you've filed your taxes, you can use the IRS's Rebate Calculator to determine how much of a rebate you'll be receiving.

Here's the payment schedule for the rebates:
DIRECT DEPOSIT
Last two SSN digits:
00 through 20 Receive Payment on: May 2
21 through 75 Receive Payment on: May 9
76 through 99 Receive Payment on: May 16

PAPER CHECK
Last two SSN digits:
00 through 09 Payment Mailed by: May 16
10 through 18 Payment Mailed by: May 23
19 through 25 Payment Mailed by: May 30
26 through 38 Payment Mailed by: June 6
39 through 51 Payment Mailed by: June 13
52 through 63 Payment Mailed by: June 20
64 through 75 Payment Mailed by: June 27
76 through 87 Payment Mailed by: July 4
88 through 99 Payment Mailed by: July 11

Good luck, and don't wait so long next year!

An Argument For VHS

2008-04-10T07:30:00.000-07:00

The losers of the format wars can be some of the biggest winners when it comes to saving your money. If you can get over the thrill of purchasing a movie the second it's released on the latest format, you can end up with a great collection. I know that there are video-philes out there who swear by DVD and the idea of watching a VHS makes them twitch. To that I say, get over it. If you've got the money to afford your fine tastes, go ahead and indulge in new release High-Def (or is it Blue Ray now?) movies for $14.99 a pop- but if you just want to watch a movie without spending a ton of money, then outdated media may be for you.

VHS is the most obvious choice. You can pick up a VCR for well under $10 at a Goodwill (or free on craigslist) and videocassettes are cheap as heck at thrift shops and yard sales. If you've got a particular movie in mind, look it up on Amazon, ebay, or half.com. Chances are, you'll find what you're looking for for 99 cents or less. Finding even a used DVD priced that low is pretty rare, unless the movie was godawful.

A second option that doesn't even occur to most people is Laserdisc. For just under a decade Laserdisc was the wave of the future, before folks realized the disc didn't have to be nearly so big and moved on to DVD. Laserdiscs tend to be even cheaper than VHS when purchased at a thrift shop, though they might run you a little more online. The disadvantage to Laserdisc is that there are fewer of them, and you can't really find anything released post-2002 (at the latest).

Buying your movies used and on outdated formats can save you a ton of money. Having a dual VCR/DVD player makes life in our house pretty great. We can buy loads of movies on VHS for $1 or less to keep, and we rent our TV shows (or movies too new for outdated formats) on DVD from Netflix.

While rows and rows of shiny DVDs look great, too often a $14.99 DVD gets watched once and then lives on a shelf for years. If you've got piles and piles of DVDs, I encourage you give them an honest look-through. How many of them have you played more than once in the past six months? I'll bet anyone between the ages of 18-30 has a huge pile of movies and music they're not watching. If you made a list and researched how much your unwatched movies and un-listened to CDs sell for online, I'll bet you could make a nice chunk of change. Why hang onto items you're not using when you could turn them into money that will earn interest? Why not sell your DVDs that can be replaced with an older format and chuck the difference into savings (or at your credit card debt)? Why not just buy a movie on VHS at Goodwill or half.com in the first place? You can watch it over and over again, and it won't lose nearly as much value as a DVD.

Now, I know there are people who will say "But Margaret! You plebe! DVDs have better picture clarity and sound and omg it is ALWAYS better!" and they're correct. Owning movies you really love and will watch semi-often on DVD can have lasting value. There are about 50 to 100 movies that I'd love to own on DVD one day, but for now I'm perfectly happy to rent them or watch them on VHS or Laserdisc. If you really Only Want DVDs Ever (or if a movie you adore is too new to have ever been released on VHS), please- at least have the patience to buy them used.

Ten new DVDs a year will cost you about $149.90 (assuming you're paying an average of $14.99 for them). Ten used DVDs (assuming they're about $7.99 on average) will run you $79.90. Ten movies on VHS will run you $20 tops, probably less. That's $59.90 - $129.90 a year in potential savings. Personally, I'd rather just rent 2+ DVDs a week from Netflix for about $1.12 or less each over the course of a year than have unwatched movies on any format just sitting around. But I've totally got the original Star Wars Trilogy (box set!) taking up space. It was $2 at a yard sale (that's for all three), and you never know when it might be time for a Star Wars fix. If I watch any one of them just once a year, it'll cost me just 66 cents per viewing. If I'd bought it on DVD when it was finally released and watched any one of the set once a year, it'd run me about $17.33 per viewing. Consider the cost of a movie in viewings per year. Whip out that cell phone calculator and tell me if it's really worth it to purchase a DVD you'll watch maybe twice. That's [Price of DVD] / [Estimated Viewings per Year] = Cost Per Viewing.

You can probably think of something better to do with that money.

As with everything else you might decide you Must Have, consider your bottom line. What's more important to you? Saving money for a trip/apartment deposit/house/car/wedding/safety net/debt reduction or being able to see every single pore on Christian Bale's face?

The No-Groceries Experiment Update

2008-04-09T09:38:00.000-07:00

This month's experiment to spend no money on groceries is going swimmingly so far. (Well, it is only the 9th. But still!). The closest I've come to grocery shopping is paying one roommate back for 6 or 7 bottles of beer and asking the other to please pick up a lime. I've eaten/drank:

Leftover Pesto Pasta
Bow Tie Noodles with Tomato Sauce
Pea Soup (vegetarian)
Biscuits
Pancakes (make a Big Batch on a weekend morning, and then freeze enough for quick breakfasts during the week)
Irish Soda Bread
Peanut Butter Cookies
Black Bean Soup (with cilantro from my container garden!)
Corn Bread
Chocolate Truffle Cookies
A Bagel or Two
Sweet Iced Tea
Apple Juice
Coffee
+Burgers from Work (about 5 a week)

The soup + bread combo works wonders for me. I can make a big batch of soup and I'll get about two dinners (me + Boyfriend), one or two lunches for me, and I can send some with him to work. If I make a batch of a quick bread to pair with it, I've got quite a filling meal indeed.

Because even Pea Soup haters love my Pea Soup, though it might more accurately be called Vegetarian Pea Stew, here's my recipe (in all of it's guesstimating glory):

1 lb Split Peas
7 c water
2 vegetable boullion cubes
2 large carrots
2 small potatoes
1 brown onion
1 1/2 Tbs Cumin
Pepper
Salt
2 or 3 Bay Leaves
Tabasco Sauce

Place the split peas in a bowl with 3 cups water to soak. Put the other 4 cups of water in a stock pot to boil. Chop the carrots and potatoes into your version of bitesize. Peel the onion and chop it in half. When the water in the pot boils, toss in the boullion cubes. Once the cubes dissolve, dump the split peas (do not drain), the half onion, carrots, and potatoes into the pot. Add the cumin, bay leaves, and salt & pepper to taste. Add Tabasco if desired. Keep in stock pot over medium-low heat for about 30 mins, or until peas have become mushy and potatoes are tender. Remove onion and bay leaves before serving.

You can replace the boullion cubes + water with vegetable broth if you like.

I make a batch of this soup about once a month. I eat at least one meal a day for about week with it, and that includes feeding my significant other when he comes over. I serve it with Irish Soda Bread or plain old biscuits.

And the very best part is that this soup costs me less than $5 to make. Much, much less. More often than not, I'll offer this one up to the roommates for dinner, because they love it. Even my roommate's 5 year old daughter will attest that the mushy green stew "... looks yucky but it tastes really good!"

Where Even Roaches Fear to Tread

2008-04-08T09:56:00.001-07:00

Here's a bit of advice you won't find in too many finance blogs; What do you do when the kitchen in your communal apartment (or house) is far too filthy to cook in? I consider myself very lucky- our kitchen is so huge that even when the dishes pile up a bit, there's still room to make dinner. And even when the dishes pile up, you'll never find actual food still stuck to them. But we're in the very lucky minority. Most twentysomethings living in apartments (or houses) with more than one roommate have kitchens a Hazmat team would balk at, and it's not just about who left their plate & spoon in the sink for a week.

Four week old leftovers rotting in the fridge. Some of the dirtiest stovetops known to man. Pots and pans and baking sheets that would be better suited to a scrap metal shop (or a landfill). The list goes on. Not to mention the fact that most apartment kitchens are more like the tiny galleys you might find on a submarine. And just as amazingly, it's never anyone's fault, even though the filthiness of communal kitchens is generally everyone's fault, whether they realize it or not.

So what do you do? Grumble to yourself a bit, and then clean it yourself. The half hour to hour a week you'll spend cleaning your kitchen is worth it. If you spend an hour a week cleaning your kitchen so that you can prepare meals in advance, you won't have to go out and drop $5-$10 (or more) every time you walk into the kitchen and sigh at the filth. Just pull out the pasta you made on Tuesday while the kitchen was clean for 24 hours, warm it up, and wash your spoon and bowl when you're done.

One hour of your time to clean up a mess that is at least partially yours is certainly worth not spending $40 or more a week on fast food. Right? Cleaning up after someone else might suck (and most of us have been on both sides of this equation, I think), but in the long run isn't your financial bottom line more important than the injustice of washing out your roommate's girlfriend's cereal bowl?

The Festival of Frugality

2008-04-08T09:46:00.001-07:00

On the heels of yesterday's Carnival of Personal Finance, I also participated in this week's Festival of Frugality at Penny Saved. Highlights include How to Get Anything for Free Online and 32 Reasons to Be Frugal Besides Saving Money.

Carnival of Personal Finance

2008-04-07T09:57:00.000-07:00

Hey guys! I participated in the traveling Carnival of Personal Finance this week. Loads of bloggers contributed, but here are the articles I think you guys will find the most useful.

The Cost Of Instant Gratification I go on and on about how having credit isn't the same thing as having savings. Here's a great post at Moolanamy to drive the point home.

How to Get Great Credit in 2008 Pracical tips to raise your credit score at The Penny Mine.

21 Days to a Negative Money Habit Jennifer at SavingAdvice.com tackles 21 nasty spending habits and how to combat them.

Finance Girl plays "I Never" with her finances.

There are many, many more articles over at the full carnival on Moneyning. Check 'em out!

For the Locals: Books for $1

2008-04-05T16:37:00.000-07:00

Random Find today in Orange County:

The One Dollar Bookstore!

There are literally thousands of books in this completely disorganized, but totally fun bookstore. And every single book is one dollar. There seem to be a lot of textbooks for the local junior colleges too.

For some reason, the One Dollar Bookstore hosts yoga classes on Tuesday and Thursday nights at seven. You can pay $11 or donate an hour of your time to alphabetizing books.

As I've said before, one of my biggest weaknesses is the book section at Goodwill. This place is even cheaper!

Get a Little Self Control: Track Your Spending

2008-04-04T09:52:00.000-07:00

Perhaps not too shockingly, most young adults do not keep careful track of their spending. They've got no idea where their money going and as long as the rent and bills are paid, it doesn't seem to matter. My favorite excuse for this behavior was something along the lines of "I worked for it, I can do what I want with it!" Which, while entirely valid, isn't going to make anyone financially stable. Just barely solvent maybe, but not stable. A person could be $500 or more into overdraft (like I was three years ago), but as long as someone will give them cash for a paycheck it becomes easy to ignore a nasty, embarassing financial situation.

Tracking your finances can seem overwhelming, and if you're already in a nasty position just beginning to track them forces your head out of the sand. Denial is often more fun than having to look around at the hole you're in. Even if you're not in a financial pit, tracking your spending meticulously is enlightening. You're probably bleeding out money on unnecessary purchases without even realizing it.

Keeping an eye on your spending doesn't have to be an awful chore. It's not even hard, once you're in the habit. Here's my advice for making it a habit:

(1) Have at least one set time a day to record your daily spending. Pretty much everyone I know sits down at the computer for a while once they're home from work. Taking 5 minutes away from facebook or myspace shouldn't be too hard.
(2) Don't rely on your online banking transaction record to be accurate. Too often we just glance at our balance online and make spending decisions based on that. But the available balance may not be the actual balance, or transactions might take a few days to post, both of which can send you into Overdraft Land. (But you've got overdraft protection now, right?)
(3) If keeping a spreadsheet or a Quicken file together seems to boring or complicated, try keeping a journal a la Bridget Jones. Bridget would write about her day and at the bottom of her entries she'd keep of record of various personal statistics; cigarettes smoked, pounds gained/lost, and so on. If you're in the habit of blogging or bulletining on MySpace or whathaveyou, this shouldn't be too hard.
(4) If you can't keep a mental record of what you've spent, get a receipt for everything. Then, at the end of the day (or whenever you sit down to record your spending), pull out the receipts and consolidate the information.

Until this year, I never kept meticulous track of my spending. I began to obsessively track my spending on February 7, 2008. (Yes, it was that recently.) In just over a month, keeping careful records helped me to push my net worth (small though it may be) into the black and helped me to give myself about a $100 cushion in my checking account.

I'm not rich by any means, but I know exactly where my money is going. Recording my spending has put me in control of it, and I'm finally in a position to start paying off my random debts.

5 Money Saving Alternatives to Stuff We Do All the Time

2008-04-03T02:49:00.000-07:00

There are a few behaviors that seem almost universal to twentysomethings. With few exceptions, we love to go out with our friends. We end up eating fast food because at some point during the day (or night), we skipped a meal. We go to the movies and drop $10 or more because we didn't plan ahead and we're sick of all the movies we own. I'm sure there are more, but I believe the five activities that follow are where we lose the most of our money- either we're having so much fun that we're not paying attention to how much we're spending or we're in denial about how much we've got available to spend. Either way, here are a few ideas to help you hang onto some of that "discretionary" income.

(1) A Night Out at the Bar: Hanging out at the bar is fun - and lord knows I miss it at times, I used to go at least weekly – but you can have perhaps just as much (and arguably more meaningful) fun at home. Buy a 12 pack and invite some friends over. Assign Bringing More Beer to some, and Bringing Snacks to others. Instead of running up a $10 -$20 tab and then waiting to sober up, go ahead and invite a few friends over to get tossed on a Saturday night. You’ll all save money!

(2) Starbucks/Smoothies/Soda: Whatever your overpriced beverage of choice, you can replace it and save money by doing it yourself. Make coffee at home. For the cost of a Frap and a muffin, you can get a big can o’ coffee. It’ll last you at least a month. Get a blender and make smoothies at home. Instead of soda, get addicted to another beverage (sweet tea and apple juice did it for me.) Instead of meeting up at Starbucks, invite a friend over for sammiches and tea. Or put together a small picnic and meet at the park.

(3) Dinners Out: Host a Pot-Luck. Invite everyone to bring a dish, or ingredients for a dish. Scramble up enough tables and chairs, and have a sit down meal at home with friends, instead of spending $16 a plate (plus drinks!) for a meal that either won’t fill you up or will leave rotting forgotten leftovers in your fridge.

(4) Fast Food: Don’t. Pack a lunch or dinner. I’ve gotten into the habit of taking a water bottle (or a sipper of tea or juice) and a bag of cookies or another snacky type food out with me on errands. When those errand running snack cravings attack, I sooth them with a cookie (homemade, of course).

(5) Movie Tickets: Oftentimes the “What do You Wanna Do? – I Dunno Whadda YOU Wanna Do?” conundrum ends in catching the latest flick. These days a movie ticket is at least $10 (around here anyway.) Ouch. Even seeing a matinee hurts. Instead, wait for movies to hit the dollar theater and go there. Or better yet, get a Netflix account. Or host a movie night at the house of your friend with the largest TV.

Income & Spending for March

2008-04-02T15:06:00.000-07:00

As promised, here's my cashflow and net worth report for March. I haven't quite settled yet on just how exactly I'll be presenting this, but for now this format will do. I've got quite a few areas to try to avoid spending next month, the greatest of which is groceries. I could potentially Not Spend upwards of $400 next month if I am disciplined.

I don't believe I'll feel deprived at all by curbing my spending so radically. As I said in my post announcing my plan to use my stores of food instead of shopping, I don't expect to bring in nearly as much income in April as I did in March. So in order to offset that, I'll be spending quite a bit less. I've got plenty of books to read, a Netflix account (Boyfriend and I have every episode of Star Trek ever queued up), basic cable, a high speed internet connection, board games, a bunch of unfinished craft/mending projects begging for my time, the list goes on.

I do plan on planting a dwarf citrus (most likely lemon) tree in a planter with some flowers and herbs around the middle of the month, and I plan to spend $100 or less on that project. Other than that, I plan to incur no major expenses except utility bills, rent, and gas for my car.

Lost in the Supermarket

2008-04-01T13:26:00.000-07:00

While I tend to shop for groceries at the stores with the lowest prices and to prepare my food at home rather than eating out, I've yet to develop a system for grocery shopping. Some months I spend as little as $25, and others I'll spend upwards of $200. Over the past few months, I've managed to put away a hibernation-worthy stash of ingredients, all of which could be used to feed me over the next month. I've got lentils, chick peas, pasta, a billion cans of tomato in various forms, vegetable boullion cubes, carrots galore, a full spice rack, pretty much everything I need for baking, even a box of soy milk and a box of chai concentrate, plus much more.

After reconciling my accounts for the month (I LOVE the last day of the month, but more on that tomorrow), I began to despair at just how much I've spent on groceries in the last month. ($203.64, including dinners out). I was able to bring in a lot of extra income last month, but this month between going back to school and choosing to see my significant other rather than working until 2am three or four nights a week, my income is going to be significantly lower. So rather than bust my ass trying to sell EVERYTHING I own on ebay I'm going to try to hang onto as much of my money as possible. More on exactly how I'm going to do that tomorrow, but the main avenue for savings in April is going to be Not Spending on Groceries.

Luckily, I get one small meal a day at my job when I'm working. It's not the healthiest meal (I work at a much-beloved by the natives California drive-thru burger place), but it is pretty much the only meat I ever eat. I'm a quasi vegetarian. My boyfriend is vegetarian, by the time I'm home from work I do not want to look at meat no matter what it is, and eating semi-vegetarian is cheaper for me.

On Thursday I'm heading to the Farmer's Market to pick up some fresh veggies, but other than that I'll be eating from my current food supply. I'll be keeping track of my meals and the ingredients I'm using (and of course I'll post my recipes, or link to the equivalent online if I've used one from a book). At the end of the month I'll take stock of how well I ate- hopefully it will give me a framework to develop a streamlined mealplan upon.

Not to mention, I'll know what to keep in stock at home in case zombies ever attack and I can't leave the house for several months.

Get Rid of Your Crap

2008-03-31T09:25:00.000-07:00

The upside to having spent a lot of money on (mostly) crap when I was younger is that there are tons of folks who want to buy my crap. Vintage dresses, handbags I don't carry anymore, Dungeons & Dragons miniatures (ok, so they're still not crap by my definition, but I haven't got the time to play anymore, and many of them are worth 30 times more than I paid for them), CDs, books, the list goes on.

During the last month I began the process of selling off my crap. I've made about $250 after shipping supplies and eBay fees. And I've still got plenty more closet to clean out. I have two huge bins of CDs, DVDs, and computer games - items that I definitely won't make my money back on for the most part- but considering that they've been parked in the garage since September, and in a box under the stairs in the apartment before I moved here, I'd rather have the cash.

I've also got a veritable crap-ton of clothes that I don't wear. Some of them are best off going to Goodwill for the tax write-off, but many of them are cute and sell-able. I've noticed that many of the clothing buy/sell/trade stores around here are complete snots when it comes to what they'll buy, and more than once I've seen my items on their racks for sale, items that they refused to purchase from me but offered to "donate." So eBay it is. Selling clothing on eBay is harder than selling media or collectibles. Vintage dresses and the like are easiest, but if you've got a cute model and a semi decent photographer, your listings will stand out. If you sign up for an eBay storefront and leave the listings up indefinitely, you'll also have better luck selling clothes you don't wear anymore- not to mention you'll make double or more what you might get at a buyback store.

Perhaps the easiest items to begin selling off are books. Half.com allows you to leave listings up indefinitely, though anything that sells for $.99 or less is better for trading on bookmooch. We tend to hoard books, even ones we have no intention of ever reading again, and so they sit unused on shelves when they could easily be sold or traded instead. Books are some of the simplest items to package and ship, not to mention cheapest with the USPS' Media Mail option.

Granted, you're not going to make millions of dollars selling all your junk, but you might be able to give yourself a cushion in your checking account that you didn't have before, or sock away $100 towards a trip to Europe (or whathaveyou), or pay back some debt with money you didn't have to kick your butt at work for.

Gardening Without a Yard

2008-03-29T16:16:00.001-07:00

The lakeside house I rent with my roommates is amazing. Tons of storage space, great view, huge kitchen, lots of light in the family room. Unfortunately, the owners decided that the entire backyard should be deck & dock. There's pretty much no green, and very little shade unless we sit directly under the balcony. So today, (non live-in) Boyfriend and I ventured out to the garden center to buy some plants and proper pots. I chose the two herbs I cook with most often (cilantro and basil), a tomato plant (plus some marigolds to share the planter), a jalapeno plant, and some chamomile. My hope is that over time, I'll manage not to kill them all and my investment of $66.81 will pay off over and over again. (I'd budgeted $100 for the project).

If these plants thrive, I'm hoping to save enough for a gigantic planter, big enough for a small lemon tree. Over time I'd like to have almost a full vegetable garden. Maybe one day I'll be able to transplant everything into an actual yard. But for now I'm 23 and my plants need to be mobile so they can move where I move and the investment isn't left behind.

Now I've just got to find a way to protect it from the geese, ducks, and neighborhood cats.

Frankenstein's Deodorant

2008-03-27T23:35:00.000-07:00

I haven't bought deodorant in almost six months.

Last October, Target had a bunch of Suave brand deodorant on sale for $.97 each. So naturally I bought 5 or 6. This week, the last stick was finally worn down to about half an inch. So I gathered up all six containers, took them apart, and scraped the remains into one tube. I popped it in the microwave for about 30 seconds (just long enough to liquify any crumbles), then I put it in the freezer for about five minutes.

Bam. Full stick of deodorant.

I know it sounds mildly insane to pull a Dr. Frankenstein on a deodorant stick, but every dollar I don't spend is a dollar I get to put into savings where it will earn interest.

We often throw things away without considering whether they might still have some utility left. In my house, sour cream & cream cheese are considered necessities, so we buy them (store brand, on sale or with a coupon) on a regular basis and we save the containers. Six months ago we were hurting for Tupperware, but now we've got more than plenty of containers for leftovers. Paper towel tubes are used for storing plastic grocery bags (much more compact!). Brown paper bags are used to mail bookmooch books. Coffee canisters become pencil cups. We wash & re-use Zip-Loc bags. Almost gone deodorant sticks are combined to make a full stick.

Often we stress ourselves out trying to bring in more money without considering that if we found more ways to hang onto our money in the first place, we might not feel the crunch so acutely. That's not to say that bringing in more income is a negative- but finding little ways to Not Spend $1 or more here and there adds up. Bear in mind that Not Spending $1 is not the same thing as buying a $10 doohickey for $9. Spending $9 to save $1 is not equal to Not Spending $1 in the first place.

Being less wasteful affects more than just your pocketbook. When you're re-using or recycling items that you might normally have just chucked in the rubbish bin, you're keeping stuff out of landfills- going green, as it were (as I said to my roommates last night, "going green" is the new breast cancer.) You can buy 8 million products that are certified to be "gentle on the environment," but one of the best things you can actually do is create less waste.

Now, I'm not advocating that you hoard every bit of non-toxic trash until you can re-use it. But do consider: What are you throwing away that might be re-used or frankensteined back to life? Have you bought something to fill a need that might have been filled just as easily by something you would normally throw away? Can McGuyvering a solution from available materials save you a little bit of money in the long run?

Guest Post: Creative Saving Strategies

2008-03-27T18:12:00.000-07:00

The habit of saving did not come easily to me. Only in the past six months or so have I truly begun to become disciplined about socking part of my paycheck away. I could write an article about it myself, but it would be chock full of ideas and strategies that I learned from my buddy Arjay. Arjay is one of the only people I know who was putting money away while most of the people around him spentspentspent. So for this post, I turn you over to Arjay, age 23- who has well over two month's salary in savings.

Here are a few tips on how to get started saving in your late teens or early twenties. I've been saving for a few years, and I'm glad I did because when I really needed extra cash I didn't have to stress myself out too much. Whatever your reason to save, everyone can always save- if not for something in particular, just to have something for a rainy day can really make you feel good.

Rule number one, start small. There's no need to run out and start saving a lot of money, and chances are if you suddenly save a large sum, you're just going to need it later, and that would defeat your purpose of saving in the first place. I started saving just little bits here and there with my first job right out of high school. I started saving maybe $5 or $10 dollars a paycheck. I've found that most people are comfortable starting out with saving one to two hours of work. As I started working odd jobs through college, I followed this rule, and it's worked out well for me. Small amounts over time really add up.

Next, pick a bank with a high interest rate. This is pretty obvious, but some people just get so excited about starting to save that they forget to get the most out of it. Most internet banks offer a rate that's way better than what you can get at a conventional bank. Some good ones are ING Direct and HSBC Direct, and most have referral bonuses if you get referred or refer a friend. Also, I found out that I earn more interest with ING Direct in one month than I did at Wells Fargo in a year, and most internet banks will let you open an account with a buck. That's no joke. There's another reason that I recommend internet banks, but I'll mention that later. Sign up for direct deposit and have your employer split your paycheck between your savings account and your spending (er checking for most people) account. Or if your employer doesn't offer direct deposit or can't split it, set up an automatic transfer on or just before payday. Remember always pay yourself first, and bills and rent can come after that. You are your most important bill. It's a lot better if your employer can split it for you because if you don't see it you don't spend it, and most importantly you pay yourself first.

So the other reason that I highly recommend internet banks is that most have to link to an existing checking account, so it takes at least one, in most cases two business days to get your money to where it is accessible (read as: spendable). If it takes that long to get cash, you're better off just leaving it in there for when you really need it or if something comes up. I've wanted to buy so many things with the money that's in my savings, but then I thought it takes too long to get it out so why bother, don't worry about your bank being on the internet. Most are FDIC insured, meaning your deposits are safe even if the bank goes under.

Lastly, increase your savings per paycheck. This is probably the most important rule next to saving gradually (small amounts over time really do add up). Like I said, I started really small and now I'm saving about 15-20% of my paycheck. The best way to increase your savings per paycheck is when you get a raise, just bank the raise. You didn't have that cash before, so just sticking it in the bank won't hurt you.

Now, I know what you're thinking…saving is great and all, but what if I get discouraged because I'm saving money that I can be doing other stuff with, or what if I'm really tempted to spend it. Here's how I combat both issues…First off, I think to myself that if I were to suddenly not be able to work tomorrow, I have enough savings to last a few months at least, and how many people can honestly say that. Sure I'll have to make some sacrifices, but I won't be on the street immediately. By saving and paying yourself first, is actually a way to pay for a sense of security. Think of saving as a kind of a "money insurance." I mean there's car insurance, health insurance, home owner's, and renter's insurance. Most people pay for those monthly anyway, so saving is really just like another type of insurance that you pay for, and while you may never need it…It's good to know that it's there. Also if you really end up not needing to tap into it, you can do something good for yourself later…like take a nice vacation or get a new toy that you've always wanted without going into debt. How many kinds of insurance reward you for never needing to use them? Saving is the only type of "insurance" I know of that rewards you instantly for not having to use it (whether it's the interest or sense of security).

Another way to keep you happy while saving…is to periodically reward yourself when you reach a savings goal (please note, a reward is not every month). Increments of $250, $500, or $1,000 work best. Have a fun night out with the portion of the paycheck that you would have saved, or take out some of the interest to buy a book, DVD, or something small that you've been wanting.

There'll be some more posts on how to get creative saving and what to do with your money once you're bored of "just saving." For now, my hope is to get the twenty-something crowd to start saving and thinking about saving in a new way.

I've Got All These Pans...

2008-03-27T03:30:00.000-07:00

If you're outfitting your kitchen with proper implements, you need to outfit yourself with some book-learnin'. So get a cookbook. A basic cookbook- if you're learning to cook more than Instant Whatever, you'll need one.

I'm partial to the red-checked cookbook, but that's most likely because my mother was too. In fact your mom (or dad) might have a recommendation for good a general-use cookbook. Your best bet (as suggested by my mom) is to head over to a Big Box Bookstore (Barnes & Noble or Borders) and flip through a few until you find one that suits you. Then leave the store without spending any money. Buy the book you chose (used!) on Amazon, or try to find it on bookmooch.

I should mention now that the purpose of this series is not to teach anyone how to become a gourmet cook. The purpose is to teach those who might be spending exorbitant amounts of money on overpriced brand name and prepackaged foods how to eat well for a fraction of what they're currently spending eating gunge.

In order to accomplish that, I'll be showing you- not telling you. I will not be spending one penny on groceries during the month of April. Intrigued? Come back on the first of the month for the first installment.

Louis CK on Being Broke

2008-03-26T09:51:00.000-07:00

Not everyone has been quite this broke (I have!), but everyone hits their own personal low when it comes money. Only in the past six months or so have I managed to lift myself out of the bottomless pit of being so broke they charged me for being broke. I opened a money market account with a high interest rate in February, and get this - they really do give you money for having money. I've deposited $150 since I opened the account and they've given me $.29. Granted, a quarter and a few pennies isn't much. But all I had to do to get it was save a some money. My regular savings account is lucky to earn one red cent in interest in a month!

Maybe one day I'll earn enough interest to even out those overdraft fees I paid when I was younger.

Finding a Reason to Save

2008-03-25T04:31:00.000-07:00

The biggest obstacle many young adults face financially is apathy. The second might be ignorance. Managing our finances seems big & scary, and when it comes to saving & living within our means we just don’t wanna. Checking our balance online once a week is often the most we ever do when it comes to financial planning. We make our big purchases on payday, before we can whittle our income down with stupid stuff like paying our bills or filling our gas tanks. We’re certainly not immediately concerned about ever having the money for a wedding, a house, kids, retirement or anything else. In fact, we’re often operating on this vague assumption that by the time those Major Life Events come ‘round, we’ll be working glamorous jobs and making $80,000+ a year and those expenses won’t even dent our bank accounts.

We’re just not inspired to do anything with our money other than spend it. We want (multiple) beers after work every night, iPods, dinners out, new clothes, DVDs, the latest cell phones, video games…in fact, we’re pretty much still teenagers except for the beers part. Most of my friends weren’t paying any attention to their finances until all of the sudden they found themselves crossing over into their mid (or late!) twenties. Out of nowhere, we begin to wonder if we are doomed to live with roommates our whole lives, if we’ll ever have careers instead of jobs, if we’ll have nice weddings or just go visit a justice of the peace and have it over with, or if we’ll be able to retire comfortably- the list goes on and it’s different for everyone. Whatever your reasons, they’ll hit like a ton of bricks when the time comes.

But what do you do before the What-Ifs kick in and you start caring about your long-term financial situation? How do you get inspired to take control of your finances instead of just plucking along, paycheck to paycheck, heaving a big sigh of relief when you don’t get evicted and your cell phone’s still on? I believe the answer lies in finding short-term goals to work toward. Our attention spans are short, at 18-20 ish we don’t really NEED to start planning for weddingsbabieshousesretirement just yet (though we should)- but we might just get inspired to get our butts in gear for the more nearsighted goals.

So if you’re not quite old enough to care about the Real Grown Up Stuff You Have to Pay For, sit down and make a list of goals. They should be goals you could reach in a year (maybe less!). Here’s what a few of mine might have looked like when I was 19:

• My own room! (If you live at home, this might translate into getting an apartment with friends. If you’ve already got an apartment with friends, this might translate into getting your own place, or a place with fewer roommates.)
• A trip to ______ (Fill in the blank. I think I wanted to go to Africa when I was 19. Still do. Traveling abroad or cross country is perhaps one of the best goals for younger adults. We’ve got more freedom to roam and it’s lower cost goal with a short payoff. Perfect!)
• Paying off my car loan. (Some of you might have this one too. If you went to college, this might be a student loan instead. It might be both. Maybe you just want you’re a car in the first place!)
• A laptop! (I’ve got one now, I bought an iBook G4 from a friend for $500 when I was 22. But this item might be any other gadget- a GPS, an iPhone. Of course, this assumes you’ve got the willpower to not put such an item on credit.)

Write down your goals. Whether you’re 18 and you just want an iPhone or 28 and looking to buy a house. Write them down. Be detailed. Where is your apartment? When you get to Italy, what will you see? What will you do with your laptop when you get it? Where is the dining room in your house? Put your list somewhere you’ll see it every day (taped to your computer monitor is best). Definitely look at it when you check your account balances online. Are you treating your money in a way that brings you closer to your goals? Or are you just as far away from them as ever? When the disparity between your behavior and your greatest wants can no longer be denied, it is very difficult to not begin taking at least baby steps towards financial responsibility.

If you’re reading this blog you probably already care about your financial situation on some level, but all the blogs and tips in the world won’t help you unless the decision to take control of your finances is inspired by a personal goal you care deeply (dare I say viscerally) about reaching.

Coupon Codes!

2008-03-24T16:24:00.001-07:00

In this day & age, nearly all of us shop online at least some of the time. One of the most annoying things about online shopping is leaving the promo code box blank. Well, never again! CurrentCodes.com is an up-to-date, free database of current coupon & promotional codes. Next time you buy anything online, check this site before you check out!

The $37 Latte

2008-03-24T00:15:00.000-07:00

Until I was about 20, I ignored overdraft notices. My mother would call and point out the pile of matching envelopes arriving at her house (the address I still used for banking purposes for a while after I moved out), and I would shrug them off or rationalize them. The older I get, the more I realize that this phenomenon is not unique to me. Granted, not everyone racks up tons of overdraft charges, but I believe there’s a fairly significant number of the 18-25ish set who not only rack them up, but also live in complete denial of the havoc overdrafting is wreaking on their finances.

I don’t know of any hard numbers on just how many of us get into this awful habit, and I can only guess as to the reasons. Perhaps we’re embarrassed, perhaps we’re in denial. We want to seem financially solvent, even if we’re not – often we don’t care about the numbers on our bank statements as long as our debit and credit cards clear when we’re buying overpriced goods & services that we don’t actually need.

In a perfect world, the bank would just reject our attempts to purchase items that we haven’t actually got enough money for, but banks are businesses and charging fees to the financially illiterate or irresponsible is their bread & butter. We start to play beat-the-bank, thinking we’ll deposit more before the transaction clears, and we begin to believe that it’s ok to overdraft. After all, the bank let you charge whatever it was you thought you needed in the first place, right?

Let’s say you’re like I was, and you are completely in denial about the notices flooding your mailbox. Let’s say that one of them was the result of having not quite enough for the $5 latte you wanted. You have $3, and you go ahead and charge the $5 on your debit card. The bank catches this, of course, and hits you with a $35 fee. You just paid $37 for an already overpriced $5 latte.( $5-$3 you already had = $2 +$35 fee = $37). You could have made a normal cup of coffee at home for pennies on the dollar. Even more amazing, somewhere between buying that latte and getting the notice, we manage to convince ourselves that they’re unconnected.

How much are those “little” $35 charges hurting you? Let’s say you make $15 an hour. (Lucky!) and you’re getting 6 overdrafts a month. 6 x $35 = $210. Six overdrafts a month means $210 you don’t have. And $210 ÷ $15 per hour = 14 hours. $210 worth of overdraft fees is the equivalent of 14 hours of work for you, that’s almost two days of hard work- completely down the drain. Unless you are very, very lucky you probably don’t even like your job that much. And yet you have just wasted 14 hours of time there. That's fourteen! hours! you worked just to have the money float away into BankFeeLand. That $210 could easily pay almost all of your utilities if you’re living with roommates. It’s almost FIVE TANKS of gas in a compact car, if gas can be found for $3.70 a gallon anywhere near you.

So how do you kick the habit? Well for one, start actually OPENING the notices. Tack them up somewhere where you’ll see them everyday, so that they are staring you in the face. Each time you get another, add together the running total on the most recent notice. Every so often, look at that total and think about what you could be buying if you’d SAVED that $35 instead of giving it to the bank. After a while (it may take longer for some), you’ll begin to find yourself unable to deny or rationalize the money that you’re just giving away- money that you’re most likely working your butt off for. Once you’ve learned to be honest with yourself about overdrafting, start following these tips:

• Know your available balance. Don’t just have a vague idea of what you think you might have in the bank. Know what you have available to you, after deposit holds, automatic bill payments, and anything else that you might not immediately think of when you’re excited about payday. You might deposit $600, but sometimes only $100-$200 is available for spending same-day. In the era of online banking, there’s no excuse to not know your available balance.
• Don't play Beat-the-Bank. Most banks will still hit you with a fee even if you deposit money before a transaction with overdraft potential clears.
• Set up overdraft protection. Get a savings account and link it to your checking account. Put $100 in it and set up overdraft protection. Never, under ANY circumstances withdraw that $100. You might feel that $100 is a lot of money to leave in a low interest account, and you might want to use it for an impulse buy. Don’t think of that $100 as YOUR $100. Think of it as $100 you paid to your bank to never charge you an overdraft fee again.
• If all else fails- if your will power, self control, and knowledge of your account balances aren't enough to make you stop overdrafting, call your bank request that your debit card be JUST a debit card. Most debit cards can be run as credit cards- and this will allow merchants to approve many transactions that would otherwise be rejected for Not Sufficient Funds, forcing you into overdraft. If your card can only be run as a debit card, most banks will only approve transactions for which you have sufficient funds.
• And above all - Curb Your Spending. Obviously this aspect of avoiding overdrafts is bigger than this entry, but it applies – big time. If you can manage to stop, or at the very least cut massively back on, impulse buying and overspending, you’ll be gambling your bottom line less often, which means risking overdraft less often. If you find yourself with $3 in your account, get the smaller $2.85 latte if you aren’t strong enough to get out of the line and walk out of the coffee shop. But please, please don’t let yourself spend $37 on a latte ever again.

San Francisco on the Cheap

2008-03-21T18:21:00.000-07:00

How to Spend a Few Days in:
San Francisco
...and come home with a positive bank balance.

Note: Most of these guides will be somewhat California-centric until I can get some guest posters in this category.

Getting There
(1) By Train: If you're leaving from the LA/OC area, as most of my current readers are likely to be, I cannot recommend going by train enough. Taking the Amtrak Coast Starlight from Union Station in LA to Jack London Square in Oakland costs between $120 - $140 per person, round trip, less if you're a student or if you have AAA. The seats are HUGE, there's an insane amount of legroom, and the trip is beautiful. You see parts of California you might never see otherwise. Be careful when you book, many LA-SF Amtrak routes require time on a bus. These fares are cheaper, but they defeat the purpose of taking the train in the first place. Taking the Starlight from LA to Oakland and then BARTing into the city is a much more pleasant trip. Downside: It takes about 10 hours, not including any delays that might crop up, and the food onboard is expensive and not that great. I recommend packing a light lunch, snacks, and dinner.
(2) By Bus: Greyhound has some great fares, generally about $80 for a refundable ticket and $45 for a non refundable ticket from LA to San Francisco. There's also the California Shuttle Bus with fares between $45 and $60. The biggest disadvantage to bus travel is the lack of freedom to move around. The biggest advantage is the fare, of course.
(3) By car: With gas prices trending upward the way they are, I do NOT recommend this option unless you've got a full car and you're all splitting the gas. Even then, parking is expensive in San Francisco ($25 a night, at least). So unless you're splitting those costs between three or more people, ouch. If you're going in a group, my best advice is to get a one way rental for the trip up, and another for the trip home. And if you must take your own car, park in a remote lot outside of the city and take the BART (subway) in.
(4) By air: If you're flying from anywhere on the western seaboard and you can find roundtrip tickets for significantly less than taking the train, then you should definitely fly. If you're flying from farther away, the usual tips for cheap airfare apply, shop around, buy in advance and fly on off-peak days, like Mondays or Tuesdays.

Where to Stay
(1) Hostels: Thanks to bad movies and a general misconception of a what a hostel is, most people avoid them. Perhaps others don't realize that hostels exist outside of Europe. Whatever the reason, I find that many people don't even think to book their lodging at a hostel. Beds in a dorm room can run anywhere from $12-20ish a night, and private rooms anywhere from $24-$40 a night, still a significant savings over nearly any hotel that isn't completely seedy. I've stayed at the Amsterdam on Taylor Street and the nearby Adelaide. I stayed in a private room at the Amsterdam for about a week, with its own bathroom, a dresser/wardrobe, a fridge and a microwave. No TV, but I seldom even watch TV at home- and why on earth anyone would spend so much money travelling just to watch TV in their room is beyond me. The Amsterdam boasts free wireless and free all-you-can-eat belgian waffles in the morning (I advise you get there early.) I've stayed in dorm rooms at the Adelaide, which are generally segregated by gender, and include a sink/mirror in room (the bathroom w/shower is seperate), and a locker (bring your own lock). The Adelaide also boasts free internet, but the breakfast isn't as good. If you're traveling as a couple, a private room is the best choice. If you're travelling alone or in a group, I'd advise a dorm room.
(2) Hotels: As with travelling by car, I really only recommend this option if you're in a group and splitting the cost. Even then, you're most likely going to be paying double or triple what you'd be paying at a hostel. Unless you know someone in the industry with a significant discount, you should opt for one of the hostels.
(3) With Friends: Really the best option if you're alone or in a group and it's available to you. If you're travelling as a couple...well, crashing on your buddy's couch for more than a night or two might get old. If your gracious host is still working while you are on vacation/visiting, that might also be a negative. A combo of a buddy's house + a few nights at a hostel is also a great idea.
(4) Couchsurfing: I've never couchsurfed myself, but I hear it's great fun if you're up for it.

Getting Around
(1) Public Transit: San Francisco has one of the best public transit systems in the country. Please, I beg of you, use it. If you're only going for a day or two opt for a day pass. If you're staying more than a few days, go ahead and opt for the 3 or 7 day Muni Pass. MUNI is the bus/light rail system that covers pretty much the entire city. BART covers a few major stations in San Francisco, and a significant chunk of the East Bay.
(2) Your Feet: San Francisco has a land area of less than 50 square miles. You can walk most places. Unless the hill is too steep or your feet are too tired. Then you can hop on MUNI.
(3) Taxis: Please don't take cabs unless you're somehow nowhere near a bus stop and it's really late at night and you're to tired/drunk to stumble back to your lodging.

What to See
(1) Museums: If you go during the first week of the month, you can get into some of the best museums for free, not to mention the San Francisco Zoo. Here's a guide to their usual admission prices:

Free on the First Tuesday of the Month
SF Museum of Modern Art (MOMA): $12.50 Adult / $7 Student
Asian Art Museum: $12 Adult / $7 Student
Legion of Honor (Fine Arts Museum): $10 Adult
de Young (Fine Arts Museum in GG Park): $10 Adult / $6 Student + any special exhibition fees
Yerba Buena Center for the Arts: $7 Adult / $5 Student
Cartoon Art Museum: $6 Adult / $4 Student
Museum of Craft & Folk Art: $5 Adult
Conservatory of Flowers (in GG Park): $5 Adult / $3 Student
California Historical Society: $3 Adult / $1 Student

Free on the First Wednesday of the Month
California Academy of Sciences: closed until September 2008
Exploratorium: $14 Adult / $11 Student
San Francisco Zoo: $11 Adults

I've only profiled the first week of the month because that's when most of the "big ones" are free. Don't go to a museum just because it's free, check out their websites, figure out which ones you'd most like to visit, then make your decisions based on normal admission fees. Many museums are cheap if you've got a student ID, so there's a little more wiggle room there.
(2) Landmarks: The Golden Gate Bridge, Fisherman's Wharf, Lombard Street, The Full House House (Alamo Square), the Palace of Fine Arts, Coit Tower, the list goes on and on, and most of them are free. Some San Francisco landmarks can be visited with little fear of someone waving an overpriced t-shirt in your face. Some (read: Fisherman's Wharf) cannot. Here's the thing about Fisherman's Wharf, it can be a lot of fun, and there's a lot of to see, but most of it is insanely overpriced and not really very interesting. Go for the Sea Lions though, and stand across the street and watch the Bushman scare the crap out of the other tourists. Just please don't buy any stupid overpriced Alcatraz souvenirs. If you realllly want an "Alcatraz Escapee" shirt that you'll never wear, check a local Goodwill.

Speaking of Alcatraz, don't even thinking about trying to get out to that island unless you've bought tickets in advance. If you try to buy them at the Pier, you're going to get reamed

Food & Dining
(1) Bring Snacks. Don't wait until you're hungry to scavenge for food. Hit up the nearest Safeway and stock up on some water bottles, juice boxes, granola bars, fruit, or other healthy, filling snacks. These aren't meant to replace meals, just to get you through the urge to buy overpriced goodies to snack on. That way, you'll have more money to spend on dinner.
(2) Plan Meals Ahead. Have at least a vague idea of where you'd like to have your meals. Do a little research (SF Gate Food & Dining, Citysearch) before you go. Plan to have dinner near whatever attraction you'll be visiting in the later half of the day.
(3) Eat Within Your Means. Don't blow your money on eating at an upscale restaurant every night. You are on vacation, so one really nice meal isn't anything to beat yourself up over, but there are hundreds of moderately priced restaurants with amazing cuisine all over the city. There's really no excuse to be paying more than $15 a person, TOPS. Food is the easiest category to blow all of your money on, so really watch this.

I am aware that most of these tips can be applied for traveling almost anywhere. I reserve the right to come back and edit this post to make it more and more applicable to SF only. This guide is far from exhaustive, but I wanted to present the idea that it is entirely possible to spend a week's vacation in a major city for less than $1000 for two people if you plan even just a little bit ahead. I'll be adapting this into an exhaustive non-destination specific guide in a few weeks.

Vacation, All I Ever Wanted

2008-03-21T09:29:00.000-07:00

Most of us can't afford too many big excursions out of the country, though I'd argue that traveling to a foreign country once every year or so is NOT an extravagant waste, in fact it is something you should save and plan for, if possible- but that's another post. When you are young and mostly broke (and by broke I mean living paycheck to paycheck, not saving much), simply Not Going to Work for a day or two can feel like a huge vacation.

Everyone travels to escape everyday life (and for a myriad of other reasons too, but escapism is the big one), and the traveling mentality often lends itself to irresponsible spending, especially when you're younger. Many of us don't even spend a full week planning before we skip town, and we end up draining our bank accounts and charging up our credit cards.

Then we come home to a tiny, tiny paycheck. Whoops.

And now, in a semi-regular series I'll be posting destination-specific thrifty travel guides so you can get out of town and have a little fun without coming home to a pile of overdraft notices. I'll be employing the help of friends and other bloggers so the series can be more diverse.

Later tonight, I'll begin with an extensive post on how to get the most out of San Francisco including; how to get into nearly every major SF museum for free, how to stay near Union Square for a week for less than $500 for two, how to get the Fisherman's Wharf experience without paying for it, and more!

The British Invasion

2008-03-20T18:37:00.000-07:00

About six months back, British ubermarket Tesco (think Target or Wal Mart on steroids) began a venture into the American market with a chain of small grocery stores called Fresh & Easy. They began by rolling out about one hundred stores in the Southwestern US. I read a review of the flagship Glendale store on LAist in November-ish, but I didn't actually shop at a Fresh & Easy until February.

I was up in Boyfriend's neck of the woods (in LA) and we drove by a Fresh & Easy just as we were both complaining about being hungry. It was almost ten on a Sunday night and Fresh & Easy seemed like one of the few places that might feed us both- he's a vegetarian and I'm just an indecisive eater. Not picky. Indecisive.

Perhaps the most striking feature of a Fresh & Easy is the lack of cashiers. Or the plethora of robot cashiers, depending on how you look at it. What hit us next was how very like the grocery section of a Tesco it looked. My Mother, Stepdad, and Half-Brother live almost across the street from a Tesco in Britain. Boyfriend and I visited them in January, and when your mother's got a 6 month old to care for and you're flat broke in a foreign country visiting your folks...well, let's just say we spent a lot of time at the Tesco.

Boyfriend got excited when he realized there was vegetarian-friendly food that might actually fill him up and taste good. I started to get really excited when I looked at the prices. Oh my sweet lord are they low! I didn't actually go to Fresh & Easy for proper groceries until this last Sunday, and I don't know that I've ever before walked out of a grocery store feeling like I robbed them.

I bought:
A huge tub of Sour Cream
12 bagels
A jar of ground cinnamon
A package of tri-color noodles
A can of chipotle peppers in adobo sauce
A jar of sauerkraut
A huge can of coffee
and A bottle of pure vanilla extract (not imitation crap)

For $15.23(!!) after a $5 off coupon (most stores are giving away $5 coupons like candy right now. The new chain is apparently under-performing so far this year, which is a shame.)

I'm a huge proponent of shopping at cheaper grocery stores. In Orange County, Stater Bros, Food 4 Less, and now Fresh & Easy are generally the best bets. I've got an Albertson's conveniently around the corner from my house, but I avoid it because other stores are almost always cheaper. When I'm in a hurry and end up buying ingredients at Albertson's (or worse, Ralph's!), I always wince a little when I pull out my debit card.

Fresh & Easy Markets are popping up everywhere, and I can't recommend them enough. If you're in the Southwest, and you've got groceries to buy this week, try Fresh & Easy and let me know what you think of them!

And no, they're not paying me for this. :-)

(almost) Free Books!

2008-03-20T02:21:00.000-07:00

Bookmooch.com might be one of the greatest websites, ever. Bookmooch is a giant, global bookswap in the spirit of peer-to-peer filesharing but with a physical commodity instead of (totally legal!) mp3s.

To get a book (or books) you spend points. You earn points by listing books, sending books, and leaving feedback for other members. It's a great way to get rid of books you don't want that aren't worth selling, and an awesome way to get books you do want. All you ever pay is shipping for the books you give away. You don't pay shipping for the books you mooch.

Buying books new makes me cringe. Between a couple of well stocked local Goodwills, amazon, ebay, and bookmooch, I never need to. Let someone else pay full retail!

Use Your Kitchen!

2008-03-19T13:13:00.000-07:00

And I don't mean to make instant ramen or a Hot Pocket, either. I would argue that one of the biggest leaks in our cash supply is food, and not just because we like to eat out with our friends. Most of us can't really cook anything that requires more than boiling water and a flavor packet. One of the great failings of school systems today is that "Home Ec" and "Bachelor Living," (as the male version was called in North Carolina in the 70s) are no longer required courses. The vast majority of twentysomethings have no idea how to make pancakes without a mix, or the basic construction of a casserole. Many of us were raised by parents who couldn't cook either, and it all adds up to a great, big waste.

I was lucky enough to be raised by a mother who wanted to be a chef (who eventually became one) and a stepdad who was part of a vegetarian collective in college, before he married into fatherhood. So, my parents can cook. My sister and I have a more advanced knowledge of how to move around in a kitchen than most people our age. So, in a semi-weekly series, I'll be writing a post about how to use your kitchen. Everything from basic tools, ingredients to have on hand, recipes for your own convenience foods, even making your own junk food. Most of these posts will probably involve a pretty hefty pick of my mother's brain, and this first one is no exception.

Before you can start using your kitchen to save money, it's got to be properly equipped. So here's a list of tools you should have in a functional kitchen. I'm not saying you need to run out and buy all of this right away, but keep at least a mental note of this list for when you're at Goodwill. These items would definitely count as a purchase with utility! And now, a list I got my mom to write for me:

General Use:

A paring knife and 8- and/or 10-inch french knives. Buy just the two or three of a good brand and you'll have them forever. Buying a whole set of a cheap brand may seem more useful, but the knives won't sharpen well, and might even bend. A few good knives are more use than any number of slicing and chopping gadgets and take up less room too. If you don't know anyone who can tell you how to use them properly, go here: http://usa.jahenckels.com/index.php?simple_view=88
A knife sharpener. Get one where you get the knives. Not a supermarket gadget.
A knife block, magnetic knife holder, or drawer inserts (Target used to have plastic version.) Please don't store them loose in a drawer with other items. Please.
2 cutting boards, non wood can go in dishwasher, if you have one.
A grater. You can buy grated cheese, but block cheese is cheaper. Besides, you may need to grate vegetables or fruits or other things.
A set of measuring spoons and cups.
A strainer and/or a colander
A couple of mixing bowls and miscellaneous small bowls.
A veg. peeler, bottle opener and can opener
A couple of large spoons and spatulas wooden or high temp. resistant silicone.
A pancake turner/burger flipper/fish slice/spatula (I've heard this tool called so many names!) Heat proof plastic is best on your non-stick skillet.
A whisk.

Cookware:

Non-stick skillet, thick and heavy, the best you can afford, on sale.
1 small and 1 large saucepan, thick bottom, can be found at middling prices.
Large pot for boiling water, can be quite thin and cheap--but will only be good for boiling water as anything else will stick.
2 Heavy duty baking sheets for pizza, cookies, baking potatoes. Heavy means get professional half or quarter sized sheet pans from a professional supply store if you can. Otherwise, as heavy as you can get.
Heavy, non-stick 9"x11" inch pan for lasagna, roasts and cakes.
Casserole dishes. You know, Corningware ™. If you are buying this item in thrift shops, look for the brand name. Anything else you can't be sure if it is dishwasher and freezer and microwave safe, and there's usually plenty available at thrift shops.

Appliances:
in descending order of usefulness

A stick blender, the stick part should be metal not plastic. Try to get higher wattage.
Slow-cooker [Crockpot! -M]
Microwave
A regular blender.
A food processor.
Toaster oven/regular toaster
Coffee making equipment: if you really like coffee, splurge a bit for an espresso machine and bean grinder. It will save you money in the long run. [I use a french press for my everyday morning coffee. I'm convinced it tastes better, and it's easier to clean. - M]

Baking:
If you like baking, add a scale, and baking pans of whatever sizes
suit you.

a 9" square, 2 8" rounds, a loaf tin, and cooling racks.

You'll also use the 9"x11" lasagne pan from the general list. Get pie
tins and a rolling pin if pies are your thing.

Dining:

Minimum: enough plates, bowls, glasses, coffee cups, and cutlery for the number of chairs you have at the table. Useful are extra spoons and bowls. But, in general, nobody will wash dishes until every last dish is dirty, so don't oversupply yourself with plates and glasses and cups.
The mixing bowls can double as serving bowls. Extra plates are fine for serving platters, until you come across one in a thrift shop. A couple of serving spoons with and without holes.

I was lucky, I wound up inheriting a lot of my parents' old kitchen stuff so I got a lot of these items for free. In fact, it might do you well to see if your parents want to replace any of the items on this list- then you can take the old one! Yard sales & thrift shops are almost always guaranteed to have most of these items on the cheap. But please with pots, pans, baking pans, don't buy cheap just because it's cheap. Buying a cheap cookie sheet or saucepan will just end in misery, a cooking implement that's a pain in the ass to clean. It goes without saying that you shouldn't buy cheap knives. (Though we've said it twice now!) Bigger ticket kitchen purchases are investment purchases, if you shop for them wisely they can save you hundreds of dollars in the long run.

It's Not a Bargain if You Didn't Need It!

2008-03-19T12:30:00.000-07:00

My love for thrift shops, clearance sales, and great deals in general knows no bounds. Nearly everyone gets a kick out of getting something on sale, even if they're idiot spenders. I once got a blender for free by showing up to a Goodwill grand opening. The first 100 people in line got $10 gift cards, and the blender was $8.99. With the remaining $1.01 on the card I bought a big glass jar to store bulk-purchased rice, beans, or whathaveyou.

But that blender wasn't an impulse buy. I went to the grand opening with the intention of buying a blender. I would've bought it even if the price had been slightly over $10.

One of the biggest pitfalls for bargain shoppers is how easy it is to be blinded by a deal. If you go to Goodwill and you spend upwards of $100 on clothes or household items you didn't necessarily need, you haven't SAVED money. You've spent it. And unless that $100 went to a bigger ticket item you've been planning to purchase for a while, office attire, or another purchase that will have some serious utility- that $100 could have been much better spent. Or saved.

Thrift shops can be the most dangerous marketplace for this kind of thinking. After all, one of the best reasons to thrift shop is the treasure hunting aspect- and it can be very difficult to talk yourself out of that $50 doohickey going for $10 at Goodwill. If the price is low enough, you can convince yourself that you need anything. But after a while you've spent $10 to save $40 any number of times, but you still don't have $40! You didn't actually save $40 unless you socked $40 away in a savings account. You spent $10!

The best way I know to curb faux bargain spending is to have a specific purchase and price in mind when you go to a thrift shop or clearance sale. If you can't find an egg beater for $7.99 or new white dress heels for $5.99, don't spend any money at all. Or if you must spend money, spend it on a book, video, or other item with lasting value that generally costs very little ($.99-$2.99) secondhand. But please, if you go in planning to spend $5.99 on heels, don't spend $24.99 on an air purifier.

But I Only Paid $300 For This Luxury Good I Don't Need Anyway!

2008-03-18T13:33:00.000-07:00

Note: This post is the first in a series about why young adults spend the way we do, and how to re-tool our thinking.

There are hundreds, maybe thousands, of books & blogs dedicated to personal finance, and I'm a dedicated reader of several. But while there are tons of great blogs on how to save money, how to invest, how to life-hack, how to get out of debt, and how to be a good consumer- very few blogs broach the topic of our spendthrift nature or how twentysomethings wind up in debt or if not in debt, barely scraping by paycheck to paycheck in the first place.

Most financial advice for young people is about paying off debts incurred by college expenses which, while useful for many, doesn't apply to thousands of other young folk. Everytime I crack open a book about personal finance for young adults I get about a chapter in before I realize that they're not talking to me. I don't have student loans, I don't have thousands of dollars of credit card debt, I don't have a degree that isn't helping me get the salary the career counselor promised me, and most of the post-college how-to-make-it-on-your-own advice is old news.

I do have some medical debt, a monstrously huge library fine, a utility bill I never paid off, and a charged off auto loan. But even all that adds up to less than $3000, none of which is accruing interest. And that debt exists because as I racked it up, I felt entitled to eating out most nights, buying fancy cocktails at bars, owning designer clothes, having a massive CD collection or whatever the whim of the moment was.

So why did a smart girl like me- raised by frugal parents- spend like a blithering idiot the second I moved out? I think most of us are high on freedom, whether we've escaped to apartments down the street from our parents or to dorm rooms hundreds of miles away. Whether we're living on paychecks or allowances, we're still children in many ways. Financial realities haven't quite set in yet, and most of us grew up in a culture that encourages the image of riches rather than the reality of wealth.

If we can manage to look well off, we can believe we are well off. In my case looking rich meant financing a fairly new car, buying loads of designer clothes (used, of course! I saved money!...More on that logical fallacy at a later date.), treating my friends to dinners I couldn't afford and rounds of drinks we shouldn't have been drinking anyway. Looking rich might mean different things to different folks, but the principal is the same: We end up sacrificing our needs for our wants.

Some people manage to never fall into these nasty spending habits, or are able to rely on scholarships or their parents if they do, but I think the vast majority of us spend like this at some point, even if we think we don't.

Most of my more embarrassing tales of financial idiocy revolve around buying expensive clothes. To this day I've still got a $400 purse in my closet. Granted, I bought it on sale for $320 and then got another $20 taken off because of a tiny nick on one of the handles, but I still paid (with tax) over $300 for a purse I haven't even used in over a year. My everyday purse was bought on clearance at Target for $7.98. Go figure.

What are your most embarrasing over-spending stories? What did you pay too much for and why did you do it? Post your answer in the comments. The best story gets an as yet undeclared prize. Probably from-scratch brownies or maybe my like-crack to some ginger snaps.

Next entry in this series: What makes us stop spending like idiots, and if you haven't stopped yet, reasons to change your ways.

GasBuddy.com is your Friend.

2008-03-18T10:58:00.000-07:00

With gas prices stretching ominously towards the $4 mark, driving can be one of the the more difficult areas to cut costs, especially in California. I've got a 40 minute round trip commute to work and a 1hr 20min round trip commute to my boyfriend- so even on my most conservative gasoline behavior I've got to fill my tank at least once a week. The gas stations closest to my house and work tend to be more pricey than those further afield, but by scheduling my fill up to happen on the way to Boyfriend's house or on a day when my errands take me outside of my usual routes, I can save anywhere from 30 to 50 cents on gas.

My secret? Gas Buddy, a site where members update fuel prices. When gasoline first shot above the $3 mark, I was still paying $2.70 or $2.80 and filling up for less than $30.

Another good habit is filling your tank at the quarter tank mark. For one thing, it's gentler on your car (driving around on fumes during that last hour before hitting the pump makes your engine sad), and secondly it's a built-in savings of almost $10. If you ever have a week where every penny counts- think of it as gasoline insurance- you can use up the quarter tank when you just can't afford to fill up until your paycheck clears the bank.

Preaching by Example

2008-03-17T15:32:00.000-07:00

Any blogger writing on financial matters should be accountable for the advice they give. To that end, I'll be reporting my income and net worth at the end of every month in what I'll call my "Full Disclosure" post, which will be followed within a day or two by an Income vs. Expenses report. My hope is that these posts will inspire my readers to cut out a few luxury goods or learn a few DIY tricks to cut their excess spending. Below is a report of my income so far this month. The blacked out lines are income from a "surveys for cash" site I'm a member of, and I sometimes choose to sign up for free trials to get a higher payout, which is what the blacked out line in the expense category represents. I'm not disclosing the name of the site at this time as it's a referral site and I feel that posting a referral link would compromise the integrity of a fledgling blog.

This report was generated using Microsoft Money 2004.

On Clean Lungs

2008-03-17T01:33:00.000-07:00

In the past six months I've learned to live below my means and I've quit smoking. I've been bouncing from apartment to apartment almost annually since 2002, and in September of 2007 I finally settled (I hope!) into renting a house (an actual HOUSE!) on a (man-made) lake in sunny Orange County. About the same time, I inherited my mother's copy of 'The Tightwad Gazette' - a book of hers that I'd thumbed through incessantly as a kid, fascinated with the concept that washing out ziploc bags could save money.

Of course, I promptly dumped that knowledge at 18 when I moved screaming out of my parents' house into my first apartment. I dug myself a nasty hole those first few years, the crowning achievement of which was financing a car just 2 months shy of my nineteenth birthday with an interest rate so high I'm sure the international space station astronauts could see it outside. I spent money like I didn't have to work for it and most of that was crap I've long since donated or sold for a fraction of it's original price.

Eventually my tightwad upbringing caught up to me. Little by little, concepts from Dacyzyn's books would leak their way into my everyday habits. The thought of throwing something away that might be useful? Physically painful. I slowly came to realize that for 5 years I'd been buying stuff I wanted, not stuff I needed- and that I was buying crappy versions of the things I needed so I could have fancy versions of the stuff I just wanted.

As I curbed my spending habits and began to spend more wisely, the fact that most of my peers do not do this became more and more apparent. Even those who aren't spending frivolously are not spending smart.

It is for their sake that I'm writing this blog. Some of my friends really like Frappucinos. Some of them really like designer shit. But none of them like to hear my constant refrains:

"Seriously, don't buy a frapp, you might as well burn $5 and I have a blender at home!"
"You're buying an already overpriced designer handbag new?? You might as well torch $300!!"

I quit smoking (mostly) two weeks ago and it was a lot easier than I thought it would be. The patch seems to have broken me of the physical addiction, and my desire to not spend idiotically is a strong damper for the mental addiction. Co-workers and friends keep asking me why I quit and the simplest answer is the inspiration for this blog: "Well, I might as well have been burning $5 bills."

I'll be writing about what makes us want to spend and why we feel that we must have things we don't need; how to teach ourselves to spend more intelligently, spending's effects on relationships, the differences between wants and needs plus more - all held together by practical advice including tips, recipes, links, DIY instructions, and more!