Posted By Paul
One thing that I've been doing that has worked well for me is based on a REALLY old post of mine that talks about how I save money. Here is the article:
Simple System For Saving Money
I still use this system but now I tailor it a bit in that I keep a list of places that I like to put money when I have a little extra. For example here is my current list:
Roth
Mortgage
Car Loan
Child College Fund
Fun Fund
Rainy Day Fund
I just keep this list in a text document and whenever I have more than my 'target amount' in my checking account I transfer $100 to the item that is at the top of the list and then that item moves to the bottom.
I like this system because I can change the list easily if I ever want to divert money to saving for a new goal. I can even put the same item in the list multiple times if I ever want to save towards a specific goal faster.
You may notice too that I have 'Fun Fund' in the list. This has been a great addition in that every dollar that goes into that account (which is just an account in my ISA that I labeled 'Fun Fund') is intended to be spent on something fun. It's a great way to give yourself a reward for saving. It's also a really nice way to save up money in preparation for a vacation or some other fun event. We don't even know what exactly we're saving for (though it'll probably be some sort of vacation when our child is old enough to travel), but it's great to have the money set aside and to see it growing.
Friday, April 16, 2010
Sunday, March 7, 2010
Article: Lifestyle Inflation
Posted By Paul
If you read the article that I posted about earlier:
The secret lives of American debtors
I mention Blake and his blog about trying to get out of debt.
One of his recent articles was entitled:
How to Prevent Lifestyle Inflation
Which I thought was a great article because it focuses on the psychology of spending pressure. He talks about the subtle pressures to spend more based on where you live.
The idea of "keeping up with the Joneses" is nothing new, but I like the fact that his first suggestion is to acknowledge the pressure. No one wants to say that they are experiencing "spending peer pressure" but of course we all experience it to varying degrees. Just like the old saying that the first step to fixing a problem is admitting that it exists, the first step in resisting a temptation is admitting that you are tempted.
I also liked his third point which was to allow yourself to inflate your lifestyle a little. You are not a bad person if you give yourself these little rewards here and there (provided that your circumstances are such that you can actually afford them).
I talk about similar ideas in some of my earlier posts:
My Financial Philosophy
Financial choices: Good Vs Better
Know Your Indulgence
If you read the article that I posted about earlier:
The secret lives of American debtors
I mention Blake and his blog about trying to get out of debt.
One of his recent articles was entitled:
How to Prevent Lifestyle Inflation
Which I thought was a great article because it focuses on the psychology of spending pressure. He talks about the subtle pressures to spend more based on where you live.
The idea of "keeping up with the Joneses" is nothing new, but I like the fact that his first suggestion is to acknowledge the pressure. No one wants to say that they are experiencing "spending peer pressure" but of course we all experience it to varying degrees. Just like the old saying that the first step to fixing a problem is admitting that it exists, the first step in resisting a temptation is admitting that you are tempted.
I also liked his third point which was to allow yourself to inflate your lifestyle a little. You are not a bad person if you give yourself these little rewards here and there (provided that your circumstances are such that you can actually afford them).
I talk about similar ideas in some of my earlier posts:
My Financial Philosophy
Financial choices: Good Vs Better
Know Your Indulgence
Friday, February 26, 2010
Article: Taking Frugality Too Far
Posted By Paul
I thought this was a good article on when you have taken Frugality too far. I especially liked that they call out not tipping in restaurants as an example of 'frugality gone wrong':
Taking Frugality Too Far
I thought this was a good article on when you have taken Frugality too far. I especially liked that they call out not tipping in restaurants as an example of 'frugality gone wrong':
Taking Frugality Too Far
Article and Blog: Hiding debt: The secret lives of American debtors
Posted By Paul
An interesting article today on CNNMoney. It talked all about people who accumulate debt secretly. Trying to hide it from their loved ones, often with disastrous results. It sounds like hiding debt must be an incredibly shameful and stressful secret to have. Hearing people talk about the experience reminded me of stories from people trying to hide affairs or drug habits.
Check it out:
Hiding debt: The secret lives of American debtors
The story of Blake who lost $250,000 ($150k of which belonged to his mom) and tried to hide it was incredible.
I looked at his blog which was mentioned in the article. It looks interesting enough that, I plan to follow it:
www.debtkid.com
An interesting article today on CNNMoney. It talked all about people who accumulate debt secretly. Trying to hide it from their loved ones, often with disastrous results. It sounds like hiding debt must be an incredibly shameful and stressful secret to have. Hearing people talk about the experience reminded me of stories from people trying to hide affairs or drug habits.
Check it out:
Hiding debt: The secret lives of American debtors
The story of Blake who lost $250,000 ($150k of which belonged to his mom) and tried to hide it was incredible.
I looked at his blog which was mentioned in the article. It looks interesting enough that, I plan to follow it:
www.debtkid.com
Wednesday, February 24, 2010
Article: Overcome marriage money challenges
Posted By Paul
I read an article on the dollar stretcher that I really liked. So many aspects of the article reminded me of things that my wife and I do to handle money in our marriage, such as:
-Using rewards credit cards (never carrying a balance but splurging with the reward money)
-Saving up for expensive items (which also gives you time to decide if you really want or need the item in the first place)
Worth a read for all married couples, whether or not spending is a source of friction in your marriage:
Overcome marriage money challenges
I read an article on the dollar stretcher that I really liked. So many aspects of the article reminded me of things that my wife and I do to handle money in our marriage, such as:
-Using rewards credit cards (never carrying a balance but splurging with the reward money)
-Saving up for expensive items (which also gives you time to decide if you really want or need the item in the first place)
Worth a read for all married couples, whether or not spending is a source of friction in your marriage:
Overcome marriage money challenges
Tuesday, January 26, 2010
My Car Buying Experience
Posted By Paul
My wife and I decided to finally replace our car with a new one and I thought I'd share my experience in the hope that it's of use to people.
First of all if you are one of those people who loves the car buying process, specifically the negotiation and back and forth with the salesperson, this posting is NOT for you.
I am NOT one of those people who loves that process. I find it exhausting and more trouble than it's worth, so my experiences and tips are based on the goal of getting a good deal on a car without a lot of hassle.
So here are the steps I took and how it went:
Step 1: Pick a car.
My wife and I did our research including checking out consumer reports and came up with a car that seemed promising. We went to a dealership and looked at the actual models on the lot and picked up some information on the different features that you could add and how much they cost. Based on that we came up with the exact model we wanted in 3 colors that we liked.
Step 2: Determine price.
For this step we decided to try two different car buying services. These are just services that are offered through various organizations where they have a pre-negotiated price for a model. We tried one that was through our credit union and the other was through CostCo.
We tried the credit union service first. It was just a phone call where we told them the car we wanted, they did a little research and told us the price they could get for us. No haggle, no hassle, no pressure. When I told them I was going to think about it they said no problem and that was that.
The CostCo service is a little more complicated. You go to a webpage (or you can call them) and you tell the kind of car you are looking for and where you live. Based on that information they give your contact info to one of their dealer affiliates and the dealer contacts you. The dealer tells you the price of the car (supposedly they need to do it in person so that they can see your CostCo card but in many cases they will tell you the price over the phone) and if you want to take it great, and if not, no big deal.
One warning:
Our first experience with the CostCo service was terrible. The dealer had us set up an appointment to come in and see the car (and find out the price). When we came in it turned into the same old dealer experience (lots of tedious sales tactics, etc.). When the sales person said: "What would it take to get you to buy this car today?" I just left.
To their credit CostCo called me to get my feedback on my experience with the service and when I told them how much I didn't like it they told me that what I was expecting WAS what was SUPPOSED to happen and they offered to set me up with another dealer. We decided to give CostCo one more try.
The second dealer was great, no pressure just: here's the price.
By the way, the price offered through our credit union and CostCo were essentially the same.
Step 3: Do a little financing research.
I came to the dealership already knowing the best interest rate that I could get through my credit union. The dealership was having an incentive rate for financing that was 1% less than the credit union rate so we decided to finance with the dealer. By coming into the dealership knowing the rate I could get from my credit union it was an easy decision to make when it came down to financing.
By following these steps the car buying process was a breeze (well except for that first CostCo experience which was a disaster).
The next time we decide to buy a new car I will definitely use a car buying service and avoid having to deal with a pushy salesperson.
My wife and I decided to finally replace our car with a new one and I thought I'd share my experience in the hope that it's of use to people.
First of all if you are one of those people who loves the car buying process, specifically the negotiation and back and forth with the salesperson, this posting is NOT for you.
I am NOT one of those people who loves that process. I find it exhausting and more trouble than it's worth, so my experiences and tips are based on the goal of getting a good deal on a car without a lot of hassle.
So here are the steps I took and how it went:
Step 1: Pick a car.
My wife and I did our research including checking out consumer reports and came up with a car that seemed promising. We went to a dealership and looked at the actual models on the lot and picked up some information on the different features that you could add and how much they cost. Based on that we came up with the exact model we wanted in 3 colors that we liked.
Step 2: Determine price.
For this step we decided to try two different car buying services. These are just services that are offered through various organizations where they have a pre-negotiated price for a model. We tried one that was through our credit union and the other was through CostCo.
We tried the credit union service first. It was just a phone call where we told them the car we wanted, they did a little research and told us the price they could get for us. No haggle, no hassle, no pressure. When I told them I was going to think about it they said no problem and that was that.
The CostCo service is a little more complicated. You go to a webpage (or you can call them) and you tell the kind of car you are looking for and where you live. Based on that information they give your contact info to one of their dealer affiliates and the dealer contacts you. The dealer tells you the price of the car (supposedly they need to do it in person so that they can see your CostCo card but in many cases they will tell you the price over the phone) and if you want to take it great, and if not, no big deal.
One warning:
Our first experience with the CostCo service was terrible. The dealer had us set up an appointment to come in and see the car (and find out the price). When we came in it turned into the same old dealer experience (lots of tedious sales tactics, etc.). When the sales person said: "What would it take to get you to buy this car today?" I just left.
To their credit CostCo called me to get my feedback on my experience with the service and when I told them how much I didn't like it they told me that what I was expecting WAS what was SUPPOSED to happen and they offered to set me up with another dealer. We decided to give CostCo one more try.
The second dealer was great, no pressure just: here's the price.
By the way, the price offered through our credit union and CostCo were essentially the same.
Step 3: Do a little financing research.
I came to the dealership already knowing the best interest rate that I could get through my credit union. The dealership was having an incentive rate for financing that was 1% less than the credit union rate so we decided to finance with the dealer. By coming into the dealership knowing the rate I could get from my credit union it was an easy decision to make when it came down to financing.
By following these steps the car buying process was a breeze (well except for that first CostCo experience which was a disaster).
The next time we decide to buy a new car I will definitely use a car buying service and avoid having to deal with a pushy salesperson.
Friday, January 22, 2010
Frugal in the new year!
Posted By Paul
Happy New Year!
Sorry that this blog has been so quiet recently, but times have been hectic and I haven't been able to post for a while (I was busy shopping for a new car, you can hear all about it in an upcoming post).
Now that it's the new year my wife and I have been going over our various expenses and seeing if there are ways to save a few dollars here and there. My wife and I already life pretty frugally so there aren't many places to save money, but I think it's still a good idea to at least take a look once a year.
One thing we did decide to cut back on this year was the newspaper. My wife and I would often have breakfast and read the paper so it was nice to have the Sunday paper delivered every week. Once we had a child we noticed that breakfasts aren't quite as leisurely as they once were so we don't have the long meals to peruse the paper, so some weeks we barely even look at it.
It's a very small expense but we decided to cancel it for now and add the money we save to our child's college fund. It's a small difference, but we figure that every dollar counts.
We plan on making this quick once-over of our spending an annual tradition. Just a quick friendly discussion over dinner one night to think about all of our expenses and whether or not they are still "worth it" to us.
We're hoping that this will keep us from falling into the trap of spending month after month on something we don't really need or want simply because we never actually sit down together and make the decision to get rid of it.
Happy New Year!
Sorry that this blog has been so quiet recently, but times have been hectic and I haven't been able to post for a while (I was busy shopping for a new car, you can hear all about it in an upcoming post).
Now that it's the new year my wife and I have been going over our various expenses and seeing if there are ways to save a few dollars here and there. My wife and I already life pretty frugally so there aren't many places to save money, but I think it's still a good idea to at least take a look once a year.
One thing we did decide to cut back on this year was the newspaper. My wife and I would often have breakfast and read the paper so it was nice to have the Sunday paper delivered every week. Once we had a child we noticed that breakfasts aren't quite as leisurely as they once were so we don't have the long meals to peruse the paper, so some weeks we barely even look at it.
It's a very small expense but we decided to cancel it for now and add the money we save to our child's college fund. It's a small difference, but we figure that every dollar counts.
We plan on making this quick once-over of our spending an annual tradition. Just a quick friendly discussion over dinner one night to think about all of our expenses and whether or not they are still "worth it" to us.
We're hoping that this will keep us from falling into the trap of spending month after month on something we don't really need or want simply because we never actually sit down together and make the decision to get rid of it.
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