Meta Post : 5 great comments

Posted by Tad Johnson - May 5th, 2008 at 20:05

I’ve been impressed by the quality of comments lately. In case you missed them, here are five comments and my response. 

1) In response to backing up your finances, Presh wrote :

“I would add one more suggestion for younger people: talk to your parents about their financial information and ask if they have all their financial information backed up. We don’t like to think about it, but we might need to help them in a medical or physical emergency”

This is a great point to add and an important consideration. Chances are, you have parents. Have you talked to them about their finances? It may be an uncomfortable conversation, but it’s important none the less. 

2) On the subject of real estate, and the falling suburb house prices, jrandom42 added this: 

 ”Notice it said MOST. Not happening in the Puget Sound area. Prices are still sky high. There are radio commercials for places in the “mid 700s” as if those were really bargains. Even an hour and a half away from Seattle, prices are still in the mid-300s.”

This is a really important point for anyone considering a real estate investment. The U.S. economy is continually shifting and picking the right area is crucial for any long term investment like a house. 30 years ago, Detroit seemed like a pretty great place. Today it’s a ghost town in some parts. Flint is even worse. Pick an area with a strong economy that is likely to remain strong throughout the coming energy shift.

3) Glen shared his personal experience with using cash : 

 ”I normally swipe my debit card for everything, only using cash for parking decks and restaurants that won’t take cards.

While I was in Europe earlier this year, however, I found that carrying Euros was far easier than hoping that a store would accept a card, and I was amazed at how much more conscious I was of what I was spending.

I’m normally a tightwad, so I rarely worry about going over my limit - with 150 Euros draped around my neck though, I could literally feel the impact of every three or four Euros spent (especially via coins).”

Going cash-only not only helps your everyday personal finances, it can really help while on vacation.

4) Quick hit–Eric suggested another credit card for gas rebates : 

 ”I’ll just add that the Discover Open Road Card includes 5% back on gas purchases as well as the above mentioned ‘Auto maintenance.’”

5)  Dan achieves the ultimate gas savings zen : 

 ”I think there is one obvious tip for saving money on gas … take fewer trips. I think our culture is too comfortable with this on-demand lifestyle. In the old days, people would keep a grocery list and then go shopping on the weekend to stock up for the week to come. Now we are constantly making trips to the super market or over to pick this up or run that errand. I think we could all save some gas and some stress if we slowed down, planned, made lists, and stocked up.”

This is a great point that can be said often enough. We need to rethink our relationship with automobiles. If nothing else, $4 gas should teach us that we don’t need to drive for every errand or every outing. Most of the other 6 billion of our neighbors on Earth manage to live without cars. . . why can’t we?

 

Do this today : back up your financial data

Posted by Tad Johnson - Apr 30th, 2008 at 20:04

You have strong passwords on all your financial accounts. (Right?)

You have an emergency cash account that you could access in an emergency. (Right?)

You have car insurance and/or renter’s insurance. (Right?)

But, do you have copies of your important financial data? Sure you can access everything online, but it’s a whole lot easier to consolidate everything in one place. Take ten minutes out of your day tomorrow and do this:

  • Make scans of all the cards in your wallet (front and back). Store it as a .pdf or .jpg somewhere secure (like in your gmail account).
  • Write down all your important contacts & account numbers for your banking/investment accounts. Store it securely online.
  • Get $100 from the ATM and hide it somewhere in your house (hey, you never know).

With these three simple steps, you’re preparing for the worst possible situation. Hopefully, you’ll never have to access your “backups” but if you ever do, you’ll thank yourself big time.

Spending too much? Try cash

Posted by Tad Johnson - Apr 21st, 2008 at 21:04

First, a short story :

When I was a sophomore in high school, I wanted a CD burner very badly. This was back in the late nineties, and CDs were still a hot commodity (as the iPod was still just a glimmer in Steve’s eye). I went to BestBuy with some friends and found an open box burner for a [then reasonable] $130. I didn’t have a credit card, so I went to the ATM and pulled out seven crisp, $20 bills. I paid for the drive in cash and walked out a happy man.

Holding that much money ($140 was a lot of mowed yards) in cash makes you appreciate the amount–much more than a quick credit card transaction. I still spent it, but it made me really think hard about the purchase. And, it made me really value what I had bought (I made legal copies of all my store-bought CDs, naturally).

cash1.jpg

This is a personal finance hack that you can use at any age. If you’re having trouble tracing down where your money is going, try switching to cash for awhile. You get instant feedback on your spending as you watch your wallet shrink.

I’ve written before about the benefits of using credit cards, but that’s only after you’ve mastered the art of personal finance and budgeting. Going on a cash-only plan for a few weeks is the perfect crash course to get your finances back in shape.

Save 17 cents per gallon

Posted by Tad Johnson - Apr 15th, 2008 at 22:04

You may have detected a theme as of late : gasoline is getting really expensive. On these pages, I’ve offered a silver lining to the escalating costs as well as some ideas to keep the costs down. Here’s another that fits into the latter category.

Get a credit card that offers at least a 5% rebate on gasoline purchases.

These come in a few shapes & sizes. Some are co-branded by a particular oil company (I carry a BP Visa card) while others are more generic (all the majors offer some flavor of gas rebate cards). Since gas is in many ways a fixed, recurring expense (assuming your driving patterns don’t vary too wildly) it makes sense to take advantage of these rebate offers. At $3.50/gallon, a 5% rebate is like saving 17 cents per gallon. Not bad!

As with any credit card rewards program, be sure that you don’t carry a balance month to month. These cards generally charge a higher interest rate to support their rebate offers, so a few months with a balance could easily wipe out a year’s worth of rebates.

http://www.rewardscards.com/gas-rebate-cards-ranked.asp

Gas Rebate Cards ranked via kwout

5 tips for a successful carpool

Posted by Tad Johnson - Apr 13th, 2008 at 20:04

With gas prices on the rise, driving alone in your car is an expensive proposition. We’re paying $3.50/gallon here in Milwaukee which works out to $0.15/mile for the average car. (Double that if you’re driving a truck/SUV). With such a cost pressure, the carpool is certainly an attractive alternative to the solo commute.

I’m lucky to have the idea setup for a successful carpool : my roommate and I both work in the same building. We’ve been carpooling for a few months now and it has made a noticeable impact on my budget. Even as gas prices have gone up, my spending on gasoline has decreased.

05gxcarpoollane500.jpg

Like most things, the carpool is not all roses. My roommate and I both give up some freedom of scheduling exactly when we leave for work & home, and I’m not able to run errands or drive to lunch on the days he drives. These drawbacks are well worth the extra $20 that I keep in my pocket every week.

Here are some tips for a successful carpool :

  1. Keep a routine. Try to leave at the same time every day so it becomes part of the natural routine for all carpool members.
  2. Don’t keep the driver waiting. If anyone is waiting for a pickup, it should be the passenger(s), not the driver. A happy carpool is a punctual carpool.
  3. Spread the driving evenly. This one is pretty obvious, but it deserves mention. Keep things simple with a daily rotation of driving duty.
  4. Celebrate your savings! To keep the good feelings flowing, celebrate with your carpool mates every now and again by going out for lunch, drinks, or some other event. Since you’re saving money each week, you can think of this as a “free” celebration!
  5. Spread the good word. Encourage your co-workers and friends to try the carpool. It’s really not as scary as it sounds and it’s a great way to save gas, save money, and save the environment (at least a little).

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