Thank Goodness for the Complimentary Carwash

Posted by Debt Destroyer on May 28, 2009

We’ve hit the road each of the last three weekends. The weather was gorgeous and we had fun destinations to look forward too. But one thing we didn’t have was air conditioning.

Luckily it wasn’t too hot yet, so the suffering was kept to a minimum. But I knew I wanted to get it fixed the next time I went in for an oil change. I figured it would just need a freon recharge and that would be that.

Ha!

We ended up having a relatively large hole in the A/C condensor. Price tag $650. I of course didn’t think twice about it, because if you remember, I thought A/C was a necessity. Me without A/C can be like Bruce Banner when he gets angry.

Then wouldn’t you know it, my alternator belts were cracked and I also needed new break pads. All of this combined had a total price tag of $989.40.

Uggh!

Now I understand why Trent @ The Simple Dollar decided to go with a new car. Used cars are great, but in a trade off for the decreased depreciation, you get the wear & tear that goes along with it.

Oh well, we still love our van. After 75,000 miles I should expect to have to put some money back into it. The repair guy said getting a hole in the A/C is a fluky thing. He said maybe a rock got sucked up there or something like that. A $1000 fluke. Hopefully there won’t be anymore flukes, just general routine maintenance.

Good thing there are emergency funds (and student loans).

Since misery loves company how about you share some of your favorite “fluke” stories. I’m sure The Happy Rock readers have some doozies to share. I guess you can also share stories on how you do everything perfect and never have to spend money on this kind of stuff, I just don’t really feel like reading those right now.

But feel free

Until next time,

-DD

» Filed Under Cars, Spending

4 Simple Tips To Improve Your Wealth Building Skills

Posted by The Happy Rock on May 26, 2009

The following is a guest post by DebtKid, who writes about his journey to get out of debt, and achieve financial stability. He runs a small software development company in Seattle and just launched a new coupons section on his blog.

For consumers who are barely getting by, the concept of building wealth in the current economy may be low on the list of priorities. After all, if you are struggling to keep the bill collectors at bay or prevent your credit rating from dropping like a stone, it gets a bit tough to see the “big picture”.

Unfortunately this tunnel vision needed for survival during tough times, does nothing for your long term financial security. These simple tips can help you not only make it through the recession with which we are currently dealing, but also prosper in the future.

Review your budget. The importance of having a well thought out household budget cannot be stressed enough. It is neither new or innovative advice, however it is vital to your current and long term financial stability. After the recent changes in the credit card industry and other areas of personal finance, what worked twelve months ago may not work today. For this reason you must sit down and revamp your budget to reflect your current position. Once you have made the necessary adjustments to income and expense requirements you can then determine if you have to consider a new strategy for long term financial growth.
Adjust your lifestyle to reflect your income. You can not maintain certain standards of living when your income is reduced or eliminated. Unfortunately prior to the recession many consumers tried to live beyond their means and used credit cards to achieve a higher of standard of living than they could realistically afford. This practice will not result in financial security or contribute to building wealth for your future. For this reason you must avoid the temptation to keep up with the Joneses (who are probably also burdened with debt) and learn how to live within or below your means. This is one of the challenges many people face but ultimately one of the best ways to maintain good credit and save for the future.
Stop wasting your money. Recent months have reminded us that money does not grow on trees. Unemployment levels continue to grow and many people are trying to keep their credit card payments current. Carrying high levels of debt will almost certainly prevent you from reaching financial goals. To put it simply, every month that you carry a balance and pay high interest charges you are throwing money away that could have been invested or saved elsewhere. Getting out of debt should be a top priority and there are many strategies available to achieve this goal. If you are unable to maintain your minimum payments each month consider professional advice on how to tackle your debt. On the other hand, if you are able to afford your payments, aggressively attack your debt and get it paid off. Once you are debt free you can then use your income to better your own future rather than that of the financial institutions that profit off of your burden.
Understand investing and savings. Most people do not invest or save money for one of two reasons. The first is they are limited in the amount of money they have available to cover all bases. If you can barely cover living expenses and debt repayments, finding extra money to put away each month is challenging. For people who do have a little extra each month, lack of education or knowledge about investments or savings strategies often hold people back from pursuing these options. If you do not currently have an emergency fund, retirement savings or other investments to grow your money, you must take the time to understand the role they play in your life and eventual financial stability. Once you have a basic understanding you can then begin to put money aside (even if only a small amount) today. Getting started is often the hardest step.

To truly achieve wealth you will have to develop these and other skills that will help you reach your goals. Unless you receive an inheritance, win the lottery or some other financial windfall you are the only person who can determine your financial success and there is no better time than the present to get started.

So what’s your excuse?

» Filed Under Guest Posts, Salary, Spending

Frugal Fixes Around the House – Duct Tape, Foam and a Rubberband

Posted by Debt Destroyer on May 22, 2009

Back in September I wrote about how it took me two days to fix a screendoor.

Guess what? It’s broken again.

I bring this up to show that I’m no handy man. With all the Bob the Builder that my kids watch you’d think that something would rub off on me. But nothing does. In fact when the kids break something they always run to “Mommy” to get it fixed. But I don’t blame them.

I married a female Red Green.

Ok, that might be a bit of an overstatement. But sometimes I wonder. Take our refrigerator for example.

Our bottom rack broke on the inside of the door. I messed around for days trying to superglue the original rack back in. It would be fine for a bit, then fall apart and the jug of apple juice was always falling on our feet.

I repeated this a few times until one day I came home from lunch to find out my wife fixed it.

She fixed it with Duct Tape!

That same strip of tape has been protecting our toes for over a year.

Actually the most impressive aspect of the tape job, was that Mrs DD was actively lobbying for a new fridge even before the rack broke. It is on our Wish List after all. So I was glad that she was able to put aside her desire for a new one and realize that as long as it keeps things cold, we’ll be keeping our old fridge.

Speaking of things we’ll be keeping…

Remember when Christmas came early for us and we received a hand-me-down couch? Well after we got used to it, our “new” 20-year old couch started to feel like…a 20-year old couch. So My wife took it upon herself to fix it.

Can she fix it? Yes she can!

A couple of weeks ago she went to the local hardware store and got a couple of pieces of foam cut to fit under the couch cushions. The foam was spendy ($70+), but it made huge difference. We are once again very pleased with our “new” couch and are confident that it will last until we get a leather one…someday.

While I’m busy exhorting my wife’s handiness, I do have one success story that I should share.

We were having a plumbing problem in our upstairs bathroom. Our tub spout is rather old and corroded, so water would somehow flow backwards along the bottom of the spout, get in the wall, and leak on the floor. This made giving the kids a bath more messy than it normally would be.

It took me a while to figure out exactly what was causing the water to get on the floor. But when I did, I used a rubber band to redirect the leak. Now instead of getting all the way to the wall, the water leaks down into the tub when it hits the rubber band.

I also could just put some caulk around the tub surround, but that seemed too conventional of a fix. Plus I don’t have much luck with those type of projects.

The screen door is testament to that.

So what have been some of your proudest moments fixing things yourself? Or better yet, how about some stories of home projects going awry. I don’t know about you, but I can relate to those kind of stories much better.

Until next time,

-DD

» Filed Under Frugality, Money Savers

Importance Of Good Real Estate Listing Photos(With Pictures)

Posted by The Happy Rock on May 20, 2009

Quality home photos wasn’t something that we gave much thought to when we were signing our first selling real estate agent, but it is something that we are keenly aware of now. Our house has been on the market for over 6 months and we have since changed Realtors. The amazing part is that it didn’t strike us that our pictures were not doing our house justice until a co-worker put here house on the market an had an amateur photographer shoot the pictures for her house. The difference between her old pics and her new semi-professional pictures were night and day. One looked like Grandma’s house the others looked like home and garden.

Needless to say when we searched for our second agent, we payed close attention to the quality of photos in their listings. If the pictures for our house didn’t turn out well, we would have gotten the professional to shoot our house also. Luckily the new pictures turned out much better.

If you don’t think it makes much of a difference take a look at these before and after shots and decide which set of pictures would help entice you(the potential buyer) into make a showing.
housebedroomold bedroomnew

house5 kitchendiningnew

house2 livingroomnewhigh

What do you think, is there a difference?

» Filed Under Real Estate

We Spend Coins Faster than Bills

Posted by Debt Destroyer on May 18, 2009

Lately I’m becoming an expert on the psychology of spending money, and it’s all thanks to my trusty radio.

Last month I wrote about a story I heard on NPR which said that we can save money by carrying big bills. Earlier this week I heard another story which goes hand-in-hand with the big bill story. According to this story, not only will we hold onto a $100 longer than five $20′s, but we’ll also keep a $1 longer than we will 4 quarters.

I did some head scratching while listening to it.

They talked about a couple of studies which show that people will spend coins faster than bills. The studies were interesting, and they got me thinking back to my days at an office job. Back then, if I had change in my pocket, I’d probably pay a visit to the vending machine. But I’d hardly break a $1 for the same snacky goodness.

The lady went on to say that if the Obama Administration wanted to stimulate the economy they should increase circulation of $1 coins and introduce a $2 coin.

That comment reminded me a story I heard the previous day on NPR, on how the opposite is actually happening.

The US Mint is producing 70% fewer coins this year compared to last year.

They said that a key factor in the reduction was the economic slowdown.

“The Mint’s mission is primarily to make coins to fulfill the demands of commerce,” says Ed Moy, director of the Mint. “The demands of commerce haven’t been doing too well the past six months.

They also mentioned that more people have been saving coins and turning them back into the bank.

“So in addition to low economic activity, there’s an increased number of coins coming back into the banking system, which means that the banks need less coins from the Mint,” says Moy.

So while the penny is not being retired, there will be less of them floating around. In fact collectors are grabbing up. According to the story a 50-cent roll of Lincoln Bicentennial pennies is selling on eBay for up to $10.

Yet another head scratching moment.

So how do you handle coins? Do you spend them as soon as you get them, do you roll them up and put them in the bank, or do you scour ebay and look for coins to add to you collection?

Until next time,

-DD

PS The piece of info I found most interesting in these stories was the fact that the U.S. Mint funds its own operations through sales of collectible and bullion coins. Last year it made a $750 million profit for the U.S. Treasury.

» Filed Under Cash, Psychology of Spending, Spending

The Happy Rock’s Monthly Budget Expenses Revealed

Posted by The Happy Rock on May 15, 2009

I haven’t been hiding our expenses, but the truth isn’t we haven’t really been paying attention. Since we’ve gotten rid our debt except for the mortgage and established a fully funded emergency fund, we have earned the right not to budget. Pants in a Can and DD post their expenses and take flak for it, so I figured I am not above that type of scrutiny. I don’t want to be throwing money away when there are many other good causes and uses for that cash.

Let’s get right into it.

The Happy Rock’s expenses from 4/1/2008 to 4/1/2009:

Notes

Food – Wow!!! I knew we spend a lot of food, but $800 plus a month on food. If you do the per day calculations that is about $6.66 a day per person in the family. The Rockette is a Registered Dietitian, so healthy food isn’t something she is willing to skimp on. We buy mostly organic and as much raw fruits and veggies as possible. The Rockette cooks most meals at home and other than snacks like bars and pretzels meals are made from scratch. We also have two boys(ages 18 months and 3.5 years) who eat all the time and I mean all the time, so that part will only get worse. Part of the high costs were organic formula for the baby. The only bright lining I can find is that the amount is trending down and is now closer to $650-$700 in the last few months. I also know that when we were in debt we weren’t nearly as picky about the food we ate, our dollars were better spent on debt.

Auto Maintenance – High because our 2003 Nissan Murano problems and having to replace 4 tires on both cars.

Auto Insurance - Includes $150 for AAA

Home Expenses – All in all, I think we are doing pretty well. Total home costs of of under $1100 even with ridiculous NJ property taxes. $3300 a year for a 1000 sqft condo with no land is staggering! All our other bills are pretty reasonable since someone is at home 24/7.

Household Misc. – This is the Target runs, diapers, wipes and the like. It could be categorized better, but I don’t go through the receipts to break it out into special categories, so a lot of that spending would be broken up into things like clothing, decorations, etc. It is still a pretty sizable expense.

Child Care – This is for a single sitter who comes to our house and watches both boys 18 hours a week while The Rockette works. It is a sizable return on investment since The Rockette makes nice money as a consultant. The boys will be starting preschool in a few weeks which will cause this expenses to go up a little.

All the other costs are reasonable or very good for a vibrant family of 4 in my opinion in an above average cost of living area.

The only other note would be that the monthly and yearly spending is significantly below our income. We spend way less than we earn and always have which is why we were able to destroy $70,000 in debt , buy a house, adopt two children, put a decent chunk into retirement, and fully fund our emergency fund in the last 5 years or so.

So there you have it. Let me have it. Criticism, bashing, whatever, I am up for it.

» Filed Under About Me, Spending

Saving Money with Old School Technology – Answering Machines

Posted by Debt Destroyer on May 13, 2009

As I’m quick to remind you long time readers, I took your advice and switched phone/internet carriers a few months ago. One of my complaints was that we no longer could get a separate voicemail box anymore for my wife’s business. But we decided we could make do with paying $5/month for just one vm box.

But then we went shopping.

One reason our “Household Misc” category was so out of whack in March was because we spent $70 on a set of two new phones. The handsets matched our old phones so that was nice. But the best part was that they came with an answering machine. The answering machine allowed us to cancel our voicemail and save $5/month.

So as long as we use the answering machine for 14 months the phones will pay for themselves.

Ok, I lied. The best part about our new phones wasn’t the money saving feature of the answering machine. The best part was that they were used.

I know what you’re saying, “DD, why is that the best part?”

Well you see, there was a message already on the answering machine. It was a rather entertaining one too.

A woman was on the phone with her mother telling her that she couldn’t figure out her new phones and was going to take them back (obviously she had a little trouble since she was recording the conversation). She then spent a little while trying to decide whether or not to take a shower. The phone call ended with her yelling at her kid to “get out of the fridge” because he just ate breakfast and should be plenty full.

In addition to leaving us that nugget, they also named the handsets:

Youbetcha #1
Youbetcha #2

It’s kind of like those Mastercard commercials.

Slightly-used Home Electronics…$70. Knowing that you’re having a better day than the lady on the phone…priceless.

Until next time,

-DD

» Filed Under Money Savers

Should I Cash My Savings Bonds?

Posted by The Happy Rock on May 11, 2009

Short answer = Yes.

Let’s start with the basics first though. A US savings bond is note representing a US government debt. The government agrees to pay back the money you give them in exchange for interest paid to the bondholder when you redeem the bond. Currently in 2009 the savings bond rates are 0.70% and 0.00% for EE and I bonds respectively, so that makes them terrible investments right now.

Know that you know what you are dealing with, take them to the bank and get the bond value plus their accrued interest.

There are a few things to note:

You will pay taxes on the income/interest) portion of the cash you get back.
You have to wait 12 months from the date of purchase before you cash them.
If you cash them before 5 years, you will forfeit 3 months of interest.

Even with those three negatives, it still makes sense to cash them. When you do, I would personally use the money to get rid of debt. The interest savings on your debt alone is usually enough to justify bond redemption, but I would also that there are much better investment vehicles than bonds too. So hunt down those bonds from your childhood and cash them up.

» Filed Under Debt Elimination, Misc.

April Happy Rock Roundup

Posted by The Happy Rock on May 9, 2009

Here are a few of the best article’s from a year ago on The Happy Rock that are still very relevant:

The Myth Of The Bi-Monthly Mortgage
Debt Is The Symptom – Fix The Problem
Breakdown – Is Triple A(AAA) Worth The Money?
The $400 Phil and Ted’s Stroller – Dissecting The Purchase (65 great user experience comments and counting)

A big thanks to the April Blog referrers:

» Filed Under Bloggers, Misc.

Scary Movies And A Personal Finance Video Game

Posted by Debt Destroyer on May 8, 2009

We probably were the last people in the world to see it, but Mrs. DD and I finally got a round to watching “An Inconvenient Truth” this past weekend.

It was a very inspiring film (hard to believe a power point by Al Gore would be described that way) and it’s important message will no doubt have an influence on how we live.

But earlier today I saw another film which told an equally disturbing story about our national debt: IOUSA

Actually it’s the 30-minute version of what must have been a feature length film(that I missed). It does a very good job explaining the national debt and why it’s important we take steps now to curtail it’s growth. If you haven’t already seen it, I highly recommend you take the time and watch it.

Hopefully lots of people will see this and it will have the same kind of impact that “An Inconvenient Truth” has had.

It was produced by The Peter G Peterson Foundation, which seems to be a very cool foundation.

They put out “The State of the Union’s Finances: A Citizen’s Guide.” Which seems to be a print version of the film.

They give updates on a new sporting event sweeping college campuses, Budget Ball. Which is similar to Ultimate Frisbee. This is a new sport that combines not only physical play but also fiscal strategy.

And they also have a personal finance video game called “Debt Ski” about teaching fiscal responsibility to kids (or any other video game players). From what I can tell the game shows that a thrifty lifestyle is easier to maintain and that paying bills using credit comes with pitfalls that you need to be careful with.

I have to admit that I’ve wasted a fair amount of time “researching” Debt Ski for this post. Be warned, it’s fun and also mildly addicting. But I didn’t/couldn’t get past the 3rd level before I had to let my kids play. They are always interrupting me while I work.

But if you’re looking for a challenge, my little girl scored 111,000 on her 2nd try. Have fun!

Until next time,

-DD

» Filed Under About Me

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