Category Archives: Money

1-2-3 Retirement Savings (and a bunch of tips)

  1. Save as much as you can, preferable 15% of your income, in a IRA. Roth IRA, preferably. If you can save this much then you’ll also learn to be frugal in other areas, so when you do retire you’ll know how to make the money go even farther!
  2. Start as soon as you can. Anyone with earned income is eligible to fund an IRA. If you are a parent with working kids you might want to gift them money equal to their earned income into an IRA. Interest + time is the key.
  3. Keep is simple, and cheap. Most investment professionals talk about beating the market but almost never do, plus they have high expenses. If you invest in a cheap index fund like the Vanguard S&P fund then you don’t have to try and beat the market because you’ll own the market, and the fees are negligible. Here are some free bonus tips!
  4. One house, one spouse. Divorce is expensive. Sometimes it’s worth it, but it’s expensive.
  5. Pay yourself first and don’t fund your kids college at the expense of your retirement.
  6. You don’t own stuff, stuff owns you. Everything you purchase takes space and must be fed, insured, or maintained in addition to taking money out of your pocket. Don’t worry about keeping up with the neighbors, instead make considered purchases and buy the appropriate quality. Sometimes a cheap tool will do if you will only use it once or twice but other times it’s worth paying more if you will get lots of use out of it. Often used is the best buy. For example, a new Rainbow vacuum cleaner costs about $2500 with sales tax, but I recently bought a used one that works great for $140. I’d never pay that kind of money for a vacuum cleaner, even a great one like the Rainbow, but if a previous owner is offering that kind of discount then I’m all over it!
  7. Minimize your collection of monthly fees. They’re unavoidable sometimes, like cell phone bills or internet, but the NetFlix, Spotify, Hulu, cable tv and other fees quickly add up. A few hundred dollars of monthly fees multiply out to a few thousand per year.
  8. Avoid interest as much as possible, especially credit card interest.
  9. Always pay your bills on time. It’s easy to schedule payments with electronic banking., Pay 4-5 days before the due date so you won’t get hit by fees when the payment “doesn’t go through” in time.
  10. Learn to cook. Don’t eat out so much. Learn to love leftovers and pack your own lunch.
  11. Ready money is a friend. Savings can mean saving up for something or saving money until the right deal comes along. Be patient. If you wait long enough you’ll often find a great deal on things you’ve been saving for.
  12. Buy a car that’s a few years old, you might get an almost new for about half price. Let someone else take the depreciation hit.
  13. Don’t try to time the market. It’s tempting to pull out of your investments after the market takes a nosedive, but that’s the absolute worst time to do so! The best time is right before the nosedive, but only owners of certified crystal balls can do that. If you pull out when the market crashes then you lock in your losses and miss the benefit of the market’s comeback.
  14. Hot stocks are usually in the news after they’ve had a big run. Investing in today’s market darling can lead to mediocre results.
  15. After you’ve saved, and paid the bills, enjoy what’s left. Being smart with your money doesn’t mean never enjoying it. Being frugal and getting great deals is fun, being a cheapskate isn’t. Use some of your wealth to bless others who truly need and will appreciate it.

In a nutshell, save as much as you can, save as long as you can, and keep it as simple (and cheap) as you can. It doesn’t hurt to earn as much as you can. Remember to enjoy life, and your money, as much as you can!

The Price That The Patient Pay

When it comes to saving money, there’s a simple formula that often works:

Patience + Ready Money = Savings.

I see this all the time. If you’re willing to wait for a deal, AND you have the c-a-s-h to purchase it when the time comes, you can often save a ton of moolah!

Examples are many. I needed a stand for a new aquarium. The going price is around $60. I’ve been looking for one for a few weeks. Yesterday, Walmart had them closeout priced for just $15.

In the current economy there are many deals to be had, expecially if you can avoid putting it on a credit card (or something more sinister, like a home equity loan)

The Smartphone Balancing Act

Like so many, I have smart phone envy. In particular, Apple’s iPhone. There is much talk about price being the barrier to entry, and how the $99 version, i.e. last years model, opens the doors for more people. But the real barrier to me it the cost of the monthly service which, on average, comes in around $100. With voice, data, text plans it could be more.

I think of it as a chunk of my personal “communications” fee. For most, this is probably the (dying) home phone, cell phone(s), and home internet. I have a mid-range text plan for $7/month and my total is about $120/month. I’m “this close” to cancelling my Vonage (VOIP) home service, and saving $10, but moving to an iPhone will still move me to $140/month. Actually, at only $20 more than I pay now it doesn’t sound that bad.

Oh yeah, I’m still locked in to Alltel/Verizon for 7-8 more months.

And I’m not sure about AT&T.

Or the wireless service I’d get from them at my house.

An iPod touch would give me much of the fun, er, productivity of an iPhone but only when I’m within range of Wifi. i.e. at home.

Decisions, decisions.

The Big Tank

About 20 years ago I was into aquariums for a while. At my peak, I had a few 10-gallon tanks, and maybe a smaller one. I enjoyed the hobby but eventually found myself out of the fish business.

Now I have a beautiful 55-gallong tank in my living room. Sans H2O, but that will soon change. I try not to buy on the spur of the moment, but you do have to be prepared to move fast when a deal comes along. Saturday I saw this advertised on Craig’s List, in my town, for $100. That’s for tank, stand, good, lights, heater, filter, air pump, and a few other devices useful if you want a marine or saltwater aquarium. I mentioned the ad to my girlfriend, Karin, which lead to emailing the seller and making an appointment to drop by after church the next morning.

I drove the pickup to church and drove home with the aquarium. A check of the local aquarium stores confirmed what I already new, I saved a LOT of money. I might even be able to sell some of the saltwater equipment to defray the cost even more.

The kid, er, young man, selling the aquarium is a college student who didn’t have time to take care of a big tank. He was preparing to leave for 8-weeks in Switzerland, and I think he dad was pushing him to get the tank out of his living room. He admited that he was really trying to ‘move’ it. My gain.

I toyed with having a marine aquarium for a couple of hours, and read some of the book he included. I’ve always admired them in the stores with their live rock, colorful fish, and interesting invertibrates, but always thought they were too expensive and complicated. I still feel that way. I’ll probably start with a few fancy goldfish, and maybe eventually fill it with tropical fish.

Now I have to try and contain the rest of the setup expenses. Karin recommended 4-5 bags of gravel, which would’ve been over $60. Two $3.39 bags of pea gravel from the hardware store are going to substitute. With luck, I can find some old equipment, rocks, and plastic plants in my parents barn, and then all I have to do it throw in a few starter goldfish from Walmart.

Moral, you have to be able to recognize a good deal when you see it, be prepared to act fast, and have the available funds. Also, make sure it’s something you really want. And let the fun begin.