DebtSmellsLikePoopies.com

Save money to make money…

Ok, so I was boldly scrounging around on the internet to find some good money-saving tips for this site. Many tips of this sort suck by the way. Some seem as if they were taken straight from the back of an old Reader’s Digest mag. Example: Save your tin cans and make pencil holders or store buttons in! Wow, a bona fide pencil holder!

Tin cans!? Other than my zany co-worker, who for some mysterious reason acts as if she were raised in the 1940’s, who the hell still says "tin cans?" Not to mention that the tip is pretty lame. I also found lots of tips for saving money on diapers. Good tips if you have young children, but it’s hard to find tips for people who don’t have children or who have grown children.

I did manage to find some pretty handy advice on bankrate.com though:

Say NO to mileage rewards credit cards
Instead of using an airline credit card that accumulates mileage, use a cash-back rewards card. The miles accrued on a credit card often have blackout dates and deadlines. Instead, earn money from your cash-back card and use the money to invest or buy the ticket after shopping for the lowest price.

Louie Gevero, from Bellerose, N.Y., won $100 for this cost-cutting tip, which was rated No. 1 by Bankrate readers last month. Oh and another tip is to try and enter contests like this with any good tips you might have–$100 is some righteous cash to get for a tip.

I know it seems like common sense, but some people just don’t realize how easy it is to make your money work for you. It’s little things like this that can really add up over time.

Minty Fresh! Kinda, sorta. Not really…

If you haven’t heard of Mint.com by now, don’t worry. It’s new. Well, ok, not brand new–it’s been around since 2006–but it’s been getting a lot of buzz on the internet lately.

It’s a free web-based financial management service created by entrepreneur Aaron Patzer. It serves as a sort of one-stop place that that lets you view all of your financial data. It lets you see the balance of every credit card you have and your bank accounts. It can even help you pay your bills on time.  A really cool feature is that it can chart all of your info (credit cards, checking, etc) and make a wicked cool pie chart telling where all of your dough is going.

Great concept, but not great enough for me to join. I’m afraid. Very afraid.  Imagine yourself to be a bad guy; a hacker with no morals.  Wouldn’t Mint.com be the best place in the world to hack? Imagine it! You could have someone’s credit card and banking info all in one nice handy place.  I’m no security expert, but there are plenty of experts out in webernet land and they’re a bit leery of mint.com’s security.

Here are some of my concerns:

•  Mint.com’s data storage is supposedly encrypted–hard drives and servers protected by security guards, biometric palm scanners, etc. But places like this can be broken into by employees and people who do business in these facilities. I find it hard to believe that Joe Rent-A-Cop would be able to stop someone who was really wanting to do some damage.

•  Mint.com claims that bank-level security standards are used–including encryption, auditing, logging, back-ups, and safe-guarding data. Well that sounds cool, but depends on what bank they are talking about. Also, um, back-ups are usually less secure than main lines.

•  Mint.com claims that they hack their own site regularly to test their security. Unless they have a lot of the best hackers in the world working there, this doesn’t really mean a lot to me. I just pray they aren’t like the computer people at my job.

•  They also claim that they’re independently verified secure by Verisign. I hope this is a good thing and all, but I can’t say that I’ve ever heard of Verisign. Granted, I am somewhat idiotic and stay away from big words, so this may very well be awesome. I still haven’t heard of them though.

Mint.com is probably less secure than most bank websites because it saves your username and password, which it needs to then retransmit to different banks. This lowers the security level because your information is being encrypted and unencrypted each time. I didn’t come up with this on my own, I read that online somewhere.

To be fair, nothing they could say would really make me feel good anyway, because I know very little about this kind of security stuff. But I do know enough to be scared of a place that knows all of my important passwords.

I have identity theft insurance (if you don’t have it yet, go to Zander Insurance right now), but I’m scared of Mint’s way of doing things. The very thing that’s so cool about them–convenience of having all your info in one place–is what scares me the most.  The only thing that would really make me feel more comfortable about them is a track record. That’s going to take some time since they are so new.

My friend at work showed me what Mint.com can do with her accounts. I was pretty impressed. I really, really wanted to rush home and try it. But after doing a bit of research I’m still too scared to try it. So yes, I’m cynical. I hope I’m wrong and they end up being the place to go that makes managing money easier. I don’t quite trust them enough to try them right now though.

Be smart and update your resumé every three months…

One of the ways to take care of yourself financially is to make sure you keep getting a paycheck. Since your bosses can let you go at anytime, it’s a good idea for you to update your resumé at least every three months. Why every three months? Because you never know what’s going to happen.

Besides that, it’s easier to update regularly rather than trying to remember details later.

Have you ever tried to recall everything you did on a particular job? It can be pretty hard to muster up the words to describe every thing of note that you accomplished and even harder to fit all that stuff onto a single page. Now imagine if you’ve been working at the same company for twenty years and were suddenly laid off, with only a pink slip and your 20-year old resumé in hand.

Now try remembering what you did 20 years ago, or 10, or five… it’s damn near impossible. Ok, well at least impossible for me. That’s why you should try to update your resumé every three months.

You could be in your dream job working as the right-hand man/woman to the CEO of your company right now–it doesn’t matter, update your resumé every three months.

You could’ve won the lottery and you’re sittin’ on your butt drinking a huge jug of Mountain Dew in the Caribbean–it doesn’t matter, update your resumé every three months.

There are a lot of reasons you gotta update your resumé on a regular basis:

A. Your memory now of now is better than your memory of now in a month. No matter how good your memory is, what you remember now will surely trump what you’ll be able to recall in a few years. You never know when you’ll need to pull out the resumé, so it’s always good to have it updated with the latest information.

B. It’s important to chart your progress. If you can’t put something new on your resumé every three months, you’re not doing what you’re good at or what you’re doing is entirely unremarkable. You should be able to put add something recent to your resumé–an accomplishment, a new skill, a new award or new something. I personally have spent the last three months of my life contemplating the irony ending up as a shell of my former self–stuck in a vast cog of corporate bureaucracy and backroom politics that have little to do with moving the company forward. But hey, that’s just me.

C. People get fired/demoted/transferred out of their dream jobs everyday. You might be in your dream job right now but you might not be your boss’ dream candidate–you should be prepared for that. Maybe your dream job is destined to be gone in the next budget cycle. Don’t for a minute think that this can’t happen to you. No one ever expects to get fired. Think about it this way: you would give two-weeks’ notice if you quit, but do you really think your job will give you two-weeks’ notice if they fire you?

D. You may just get fed up and decide to move on. Your resumé is your life’s professional work on one single solitary page (or maybe two). It’s easier to keep it crisp every three months than it is to dust it off after three years and try to get it sparkling again. What was the name of that small project worked on two years ago?

E. The grass is greener–it really is. QUIT QUIT QUIT QUIT!

The bottom line is that one day you and your job will separate. It may not come with a retirement party, a pat on the back or the obligatory Cracker Jack box pen. Be prepared for it. Losing your job can be a very poopie situation, but if you prepare for it, you’ll be ok. Maybe.

If I lost my job, I’d probably just cook up a box of macaroni-n-cheese, enjoy some Salma Hayek videos and then stick my head in the oven and end it all while shouting, "you corporate bastards!" But that’s just me.

Just us stupid, poor people…

Ok, so here is an article on Yahoo News : Bush wants personal tax rebates. It’s sort of a long article about how the government is brainstorming on ways to improve our economy with tax rebates. I’ll let you decide if it’s a good idea or not. Near the end of the article, read this part (the bold emphasis is mine):

<<<<<Bernanke voiced his support for a stimulus package in an appearance before the House Budget Committee. He stressed that it must be temporary and must be implemented quickly — so that its economic effects could be felt as much as possible within the next 12 months. "Putting money into the hands of households and firms that would spend it in the near term" is a priority, he said.

Especially important is making sure a plan can put cash into the hands of poor people and the middle class, who are most likely to spend it right away, he said, though he added that research shows affluent people also spend some of their rebates.

He declined to endorse any particular approach, but he did say he preferred one that would not have a long-term adverse impact on the government’s budget deficit.>>>>>

Notice the part about putting cash into the hands of the poor people: "Who are most likely to spend it right away." See? We (poor and middle class) are more likely spend it right away. Affluent (i.e. smart, rich people) spend "some"of their rebates.

The smart, rich people act like smart, rich people. Imagine that! Let me repeat: The smart, rich people act like smart, rich people. They do smart, rich people things. They know that it’s stupid to take this extra money and just blow it. So we need to wise up and act like them.

I’m not sure why I got so angry when I read that part of the article. Maybe it’s because it’s true. Well, was true for me anyway. I don’t act like that now. I’m not rich or very smart, but I am starting to do what smart rich people do. First get outta debt, then invest and save for the future.

You would be wise to realize that no one is going to help you unless you help yourself first. If this rebate thing works out (and if I’m out of debt by then), I’m putting mine towards the mortgage or into a long-term mutual fund.

So go read the article and notice the effect that bad debt is having on our economy. I’m smellin’ poopies everywhere today!

The Great Bi-Weekly Mortgage Payment Debate or How I Failed Algebra, but I’m Still Smart Enough to Pay My Mortgage Off Early

Should you consider converting your mortgage to a bi-weekly payment plan? Or would you do just as well if you simply increased the amount of your monthly payment?

I asked my all-knowing, wise (sometimes wise-ass) older brother this question a while ago. In the interest of full disclosure, you should know that the majority of my conversations with my brother start out with him asking, “Why are you such a dumbass?”

This talk wasn’t that different, but he did give me some good advice about the bi-weekly mortgage payment situation. He’s a successful real estate guy; I’m successful at being jealous of him most of the time. When he talks to me, I nod a lot while cocking my head to the right a bit and squinting. This gives the impression that I’m listening and understanding him. I do this in most staff meetings at work too, so pretending works well for me. Of course, most of the time I don’t understand what my bro’s talking about, but this time he really helped me figure it out. Then he quickly resumed belittling me and shredding my overly fragile ego with his sharp wit.

Guess what? You’d actually do better by increasing the amount of your monthly payment rather than the whole bi-weekly paying thingy.

But don’t take my advice–I’m a broke person. Never take advice from a broke guy!

So let’s prove it with math:

Example A: The monthly payment on a $100K, eight percent loan for 30 years is $733.77. Hey, I figured that out on my own. Not really–I looked it up, but I still feel pretty smart. Stay with me.

On your brand new shiny bi-weekly payment plan, you would be paying 1/2 of this amount every two weeks: 26 payments a year. This would add up to one extra monthly payment a year: 13 payments rather than 12.

You would end up paying off your loan in 277 months instead of 360 months and that would save you a pretty big chunk a change: $44,160 in interest! That’s nice right?

Now on the other hand:

Example B: Lets say you decide to just divide your monthly mortgage payment by 12 (12 months/1 yr). This equals $61.15. So you add that $61.15 to your regular monthly payment of $733.77 every month.

$733.77 + $61.15 = $794.92.  This is the amount of the your new payment. Over the course of a year, you would end up paying an extra $733.77.

This is the same as with your first bi-weekly example, BUT the loan would end up being paid off in 275 months (2 months earlier than in Example A) and save you an even bigger chunk of change: $45,906 in interest.

You may be thinking that I’m doing some fuzzy math here. I’m not. I promise. So why is there a difference in the two examples?

Pay attention: With the first bi-weekly plan, Example A, it’ll take a year before the additional payment gets made to your principal. When that end-of-the-year additional payment gets there, you finally start to save on interest. In other words , it takes an entire year for your bi-weekly payment to add up to an extra payment.

BUT if you follow Example B, the one where you increase your monthly payment, your principal is reduced by an extra $61.15 starting the very first month. Your interest savings start the second month.

If you follow Example B, you pay down your principal much faster, which starts saving you interest much faster. That pesky principal is what you wanna take a chunk out of–the quicker, the better.

Of course, you don’t have to take my word for it, look it up. Google it. Ask your friends. Get a calculator. Ask your bank teller. Whatever you decide to do, just make sure you try to pay that mortgage off as fast as you can.

Focus on getting and staying out of debt in 2008

One of the mistakes I made early on when I decided to get out of debt (way back in 2005) was to join Consumer Credit Counseling Services (CCCS). They negotiate with your creditors, lower your interest rates and put you on a simple payment plan. It wasn’t a terrible mistake, but in hindsight, I could have done better.

The mistake I made by choosing them was that I didn’t realize signing up with CCCS dings your credit rating almost as badly as if you were to file bankruptcy. PLUS they charge me $24 a month in admin fees. Ouch! To be fair, you can ask that this monthly fee be waived depending on your individual financial circumstance. I only just found this out, so I’ll see if I can get them to stop charging me for the next eight months. They also have a very convenient online paying option.

You can make all these creditor payback/interest reduction negotiations yourself, but I was new at it and I failed pretty miserably. I couldn’t get a single creditor to make a deal with me–so I signed on with CCCS. I’ve been with them for almost three years now. In eight months, I’ll be totally debt-free. I just hate that my credit rating was dinged. But hey the credit card company bastards of the world should be happy they are getting anything from me because I qualified for bankruptcy. But I came to my senses and decided to pay off all of my debts in full.

You really should try negotiating the payment plans with your creditors yourself first, but CCCS is definitely the best credit counseling service to use if you have to use one. The other credit counseling services are pretty much scams. I’ll review the other ones in an upcoming post. 

Here are some great tips found on CCCS website:

Review your transportation needs. If a car is needed to get to work, be sure to stay current on your payments. Explore options such as public transportation or trading a more expensive vehicle for a cheaper one. Scooters and bicycles are also a good cheaper alternative. Look for opportunities to carpool to reduce travel expenses.

Stop charging! If you don’t have the willpower to not use your credit cards, remove the temptation by removing the cards from your wallet. Secure them in a safe deposit box at your bank or other hard to reach location, or simply put them in a bowl of water and freeze them. The time it takes for them to thaw will give you plenty of time to think about your purchase.

Explore alternatives for extra income. Talk with your employer about working additional hours at your current job, or pick up a part time job to make some additional income. Use all additional income to pay down debt.

Reduce expenses everywhere possible. Cut out the morning coffee stop, bring your lunch to work, opt for dinner and a movie at home instead of going out. Look around the house for ways to cut expenses. Consider trading in your landline and using your cell phone exclusively; cut back or eliminate on your cable or satellite package; raise (or lower) your thermostat just a few degrees—these small changes can add up to big savings.

Pay off highest interest rate charge cards first. Start with the cards with the highest rate and pay more than the minimum each month. As soon as you pay off one card, apply that money to the next card. While consolidating your credit card debt into a single card with a lower interest rate can help you pay off the debt faster, be careful of higher rates at the end of an introductory period. You could end up paying more over time. Also, if you do consolidate, cut up or put away the other cards to reduce the temptation to use them.

Keep housing payments current. Pay your mortgage or rent on time every month. If you own your home, also stay current on all taxes owed. Failing to do this can result in foreclosure or eviction.

More hints on how to save money and musings on crappy thrift store blenders

Our good friend Terri (notice the fancy double “r”) in Colorado offers up some quick, easy tips on saving money. Her tip about the small appliance drain is a great one. Obviously, some appliances aren’t worth the trouble, but her examples are good ones.

I usually unplug all of my countertop appliances because they are small and it’s so easy to do. Of course, I’m also afflicted with the overpowering fear that one of them will spontaneously combust and burn down my house. These are the fears you have to live with when using a thrift store blender that’s so old that it was probably used as the martini mixer in Hawkeye’s tent on M.A.S.H.

I’m not kidding.

These small savings really do add up! Here are Terri’s tips:

Electricity Saving TipWhen you’re not using small electronics, unplug them. Even though you have them turned off, they still use a small amount of electricity. I unplug the TV and clock in my guest bedrooms.

Cash Savings TipOne of my savings plans is not spending 5 dollar bills. Whenever I get change, I put the 5’s in my home safe. After a while, it really adds up. I’ve saved over 500 dollars in the last year! You can do the same with ones or 10’s if that works better for you.

Cash Only PolicyI withdraw a set amount of cash at the beginning of each week. Any incidental purchases i.e., coffee, cosmetics etc., comes out of that cash. It’s easy to spend money using a debt or credit card because you don’t see it leave your account. It’s harder to spend when you see the cash leaving your wallet.

The Dead Tell No Lies and Pay No Bills…

Ok, so I am having my daily financial fix over at Kiplinger.com. First, the site pretty much sucks for me. It seems to cater to people who actually have plenty of money to invest and whatnot.  But sometimes I like to dream that I am one of them, so I read the articles there.

But in their Money and Ethics section there was a letter and response that really annoyed me:

———————-

Should you settle a deceased relative’s unpaid debts?
By Knight Kiplinger, Editor in Chief
From Kiplinger’s Personal Finance magazine, December 2007

My unmarried brother died recently at 28. Everyone in our family (which is fairly wealthy) knew he was irresponsible with money. Now we find that he left behind a lot of debts — including money owed to some close friends — with almost no assets to repay them. Should my parents and I try to settle these accounts?

No one has a legal obligation to pay the personal debts of a deceased relative. But it could be both ethical and smart for your family to do so, to protect its good name.

And besides, it’s possible that your parents feel some moral responsibility, whether it is warranted or not, for your late brother’s irresponsibility. Parents are like that.

—————————-

Ok, so is Knight Kiplinger (great name, by the way) suddenly a moron? Maybe he gets kickbacks from the credit card companies. Something is up, because the last part of his answer was way off. He should have just stopped at: "No one has a legal obligation to pay the personal debts of a deceased relative."

That’s the answer. It’s very simple. No, you shouldn’t pay the debts of a relative who has just died. No legal obligation, no moral obligation.

Do you think that the credit card companies give two squats about your "good family name." They don’t care, they just want their money. Use your guilt and/or grief to help out the living.

So Mr. Kiplinger, congratulations, it’s now official: you smell like poopies for saying that.

Who the hell woulda figured that lint screens need TLC?

One way to save yourself some money is to make sure your appliances keep working. Well, yeah, I’m sure everyone knows that; but when it comes to the clothes dryer, there is a little trick you should know about.

I figured that you just make sure you pull out the lint filter and keep it clean. How hard can that be? Well, it turns out you really need to do a bit more than that.

Last year, the heating unit on my dryer was going out. After the repair guy fixed everything up, he said he wanted to show me something and went into the dryer and pulled out the lint filter. It was clean because I always clean the lint from the filter after every load of clothes.

He told me that that’s not the only thing that you should do. He took the filter over to a sink and ran hot water over it. The lint filter is made of mesh material and the hot water just sat on top of the mesh–it didn’t pass through the little mesh screen at all!

Turns out that dryer sheets cause a very thin, transparent film over the lint screen/mesh. That’s what usually burns out the heating unit. This can also cause dryer units to catch fire. You can’t really tell by looking at it; the lint screen looked clean to me, so I was surprised.

He said the best way to keep your dryer working is to take the lint filter/screen out and wash it with hot soapy water and an old toothbrush (or some other brush) every six months or so. This simple step only takes a couple of minutes to do and it’ll make your dryer last a LOT longer. It also keeps your electric bill lower due to the extra airflow, which allows your clothes to dry faster. I note it on my wall calendar so I don’t forget to do it.

Also, in a related note, remember to air-dry the clothes that you can. when you can. Cutting down on the use of your dryer saves you even more money. And don’t forget to cut/tear your dryer sheets in half before you use them. Half of one works just as well as a whole one, and this is a small, easy way to save money.

Wow, I feel so Martha Stewart after this post.

How I made $1.58/hr. and cried all the way to the bank…

Ok, so I found out about cashcrate.com from my good friends at ivetriedthat.com.  They didn’t give it spectacular reviews, but in their comments section, some people mentioned pretty good returns.

What is cashcrate.com?  It’s a website that pays you a small fee to sign up for promotional memberships. It also has a referral program that allows you to get paid for people who sign up based on your recommendation.

The good news is that it’s a pretty fast loading site and has a nice, easy sign-up interface. Loads fast and doesn’t require my feeble brain to start up the ole’ cogs of thought. This is a good thing. Takes my feeble brain a while to process hard stuff.

The best thing to do is to have or set up a “spam-only” email addy so that you won’t get deluged with 10,000 penis enlargement offers. Don’t tell my girlfriend that I am avoiding those though; she may try to talk me into trying some stuff out.

I digress. So anyway, I signed up, sat back and let the cash flow. Um, no. First, when you start filling out offers, they never seem to end. I found a few that were only a couple of pages long, but basically I spent hours and hours filling out surveys until I started having serious thoughts of “suicide by ballpoint pen.” It was the only semi-sharp instrument I had handy. Now that I think of it–I have these thoughts in my staff meeting at work as well. So maybe, it’s not really surveys that cause it.

The stinker is that they only send out a check if you can earn at least $10 bucks, so I’m thinking that they’re counting on a lot of people giving up before then.

I did this for two hours a night, five nights in a row. Apparently, being a victim of a public education prevents me from knowing how to fill out a survey correctly. My “pending” cash has about $50 in it, but my “actual” cash has only $15.80 in it. This is what they will mail me. The “pending” cash is waiting for approval. Well, it’s been waiting for approval for several days now, so I’m thinking it ain’t gonna happen.

So basically I earned $1.58 an hour. That’s ten hours of my life filled with never-ending pop-up screens of death. Never again. Well, unless those never-ending pop-up screens happen to be porn rather than vacation getaway offers.

I also made the mistake of recommending cashcrate.com to one of my friends. Before I actually sat down and did a weeks worth of work on the site, I bragged to her that there was a possibility that she could earn lots of cash doing the same thing.  She didn’t even get up to her $10 minimum, so she totally wasted her evenings.

Oh yeah, she hates me now.

So anyway, I let Princess Pugalicious take a whiff. Her verdict: cashcrate.com smells like poopies. She quickly decided that she hates me just a little bit now too.