Single Guy High Impact Saving

Afraid I was working too much the past week. Every night I got home too tired to blog. Also, not much was going on. Anywho...

I had my phone and internet service changed to the local cable TV supplier this week. Their promo rate, which lasts a year, is for the combination at a savings of $10/mo compared to what I had. And now I have cable internet, not dial up. So much faster speed, and costs less. Yep, I can live with that. LOL More money to go into savings, that works too.

As I have read other personal finance blogs, there is often a discussion about what the "experts" feel a person needs to save to have a secure retirement. I'm not going to link to the specific articles referenced, it's easy enough to find some out there. (Actually I will reference one that is very interesting: http://www.pbs.org/wgbh/pages/frontline/retirement/view/) Anyway, as I had some time I was trying to see how I measured up against these metrics. And what I determined is that, for me, this isn't as easy to determine as you might think.

The reason for this is multi-faceted. First let me say I usually read that experts refer to what you need for retirement in one of two ways. Either you need to save a certain amount each year (usually they say in the 15-18% range) for 20-30 years, or you need a certain amount when you retire (I've read everything from $500K to $2Million - I guess it depends on when you retire).

Since my retirement time frame is about 25 years out, I prefer to look at the amount I save annually and see how I am doing compared to the benchmark. In its simplest form, I am saving 10% (my 10% + 0% match) into my 457 plan (a gov't 401(k) plan). So at first glance it looks like I am not saving enough.

But I have a pension at my current employer (I still have two years before I vest in the plan, but I think its worth considering the numbers). I have to contribute 5% to the plan (this is refundable to me should I leave this job), and my employer contributes a varying amount to fully fund it. Currently it is contributing about 7% (next year should be upped to about 9%). Now I know this money isn't mine per-se but will be used to make a guaranteed payout. Still..., to figure out what I am saving towards retirement, I think these are good numbers to use. OK, that brings my total up to 22% (all of it with pre-tax dollars).

"But wait, there's more..."

However, there is also the fact I am paying a mortgage. Now I am not going to get into what the value of the house has done (it's gone up, up, up) or will do (prolly flat line), thats not important for this discussion. What is important though is that in each payment a certain amount goes to pay down the principle borrowed. Since the more that goes toward the principle, the more I would get when I sell the house, I think I should be able to consider this as money towards retirement. (To see why, consider that if I was renting, I would not be getting anything for the money paid when I stop renting, so it does help my net worth, just like any retirement account does.) Now each month I pay a varying amount towards principle, but it is currently paying down the principle at about 17% of my gross pay (that is, I'm paying with post-tax dollars). If I add this amount to the previous amount, that comes to 39% saving. (I could add the tax savings of the interest paid, but that probably is only a net of 1%, so I will ignore this factor)

"And if you call today..."

I am curently paying my wife monthly as part of a divorce settlement (yucky story). This will be completely paid off as of October of this year (yahoo!). Anyway, this amount is also post-tax money, at about 18%. As this money is in effect going towards her part of the estate (that is, increasing my worth by buying her out), this money should be considered as contributions to savings as well. Also, once the payments are done, this money *will* go towards higher savings in other areas. Add this to the prior amounts, and I come up with 57%.

"And if you call in the next fifteen minutes..."

One last thing. I have started trying these 0% Bank Transfers using credit card offers. Currently the money from these is earning me another 1% (that is: an amount equivalent to 1% of my monthly salary), and have another one in the pipeline that will give me another 1% if it goes through. Adding that higher amount in, I now come up with 59%. And this isn't even considering Social Security (trying to add that in will only muddy an already cloudy calculation!).

So, what am I saving towards retirement? 10%, 15%, 22%, 39%, 57%, 58%, 59%, something else??? Personally I think it should be 59%, as all the amounts really do contribute to net worth.

Egads, looking at that number is really astonishing. If I kept up this rate, and had the mortgage and divorce done with, I would be truly putting over half my pay into savings. Somehow I don't think I can keep this up forever (other than the BTs, I have been doing this saving rate for about the past year), but hopefully if I can do it for a few years, I will have set myself up so that even if my savings rate drops significantly, there should be enough to grow to a decent nest egg waiting for me when I retire.

As I was balancing my checkbook this week I noticed a major change to how the check register looked. That is, I now pay so much online, that I am writing very few checks each month. This transformation has taken place over the past three months, and now I can't imagine having to back and paying everything through the mail. Its so easy. Anyway, as I considered this, I figured this had to be saving me money. Here is a general overview of my online transactions.

Monthly:
Utilities - electric, gasCredit cards (Currently
four)MortgagePhone bill (land & cell)

Other periodic bills:
Water Bill (quarterly)House Insurance
(annualy)Car Insurance (semi-annually)Buy more DRIP
stock (about once a month)PayPal (hopefully not too
often!)Rebates (ok not a bill, but I file for one online about every month now)

Other things:
Direct deposit of payHalf.com sales are deposited
directlySet up Certificates of Deposit via direct money
transfersTax refunds are deposited directly

Looks like I am averaging about 12 stamps saved each month. That makes $4.50 saved right there. And no extra effort is involved, its actually less. Gotta like that! BTW, I didn't forget cable, as I don't have any. And by paying online I don't have to worry that my CC payments are on time, so no unexpected fees. So overall a definite plus to my finances.

More of my frugal throughts, ideas, and just plain goings on...

This week my mulberry tree out back has started producing way too many berries for me to get at. I now have a few quarts in the fridge, and I suspect I will have another gallon easily by the end of the weekend. And there is so much that just falls to the ground and goes to waste. Oh well, my cereal will have fresh fruit for some time. Cost - el zippo.

As I do research online for deals and offers, I find there is so much available for free, it truly is amazing. I thought this type of thing went away with the dot-com implosion. Of course now its not so dramatic as back then, but there is still good stuff available. Tonight I signed up for a free movie ticket. Don't know if it will be my choice of movie, but who cares, I go out so seldom any movie will be new to me.

Now that I have done two 0% credit card bank transfers I am getting more of these offers than I ever did. They must really like me! I know there are people out there that do so much more than I would consider, but this is easy money to earn, how can I pass it up? (FYI: the first two should earn me ~$900 by next May) I've got the monthly payments setup online, so as long as I don't get amnesia, I'm all set safe and secure.

My co-worker was telling me about going out to the movies over the weekend. As he went over his expenses I joked how I understand why I don't go out to movies, they are soooooo expensive. Then he laughed and said I am making him think about his retirement more, and that when he saw how much he was spending at the time, it made him think he could have used the money for retirement instead. Hmmmm, its a start. At least he is thinking about retirement, he will make better decisions in the future, I'm sure.

Oh, one last thing. I got an email, and Barnes & Noble is having a buy two, get one DVD sale for the coming month. Now I know their DVDs are too expensive, and this sale only puts the prices down to what other stores charge. But I have store credits to use (due to my ex-wifes profligate buying books and not reading them - so I returned them). So I have been waiting to use the credits at the best time. Well that time has arrived. This weekend I will be passing by a store, and I'll be making a list!

As I sit here recovering form cutting branches out of my oak tree (oak is really hard wood!), I took a quick look at my retirement fund balances. A few weeks ago I said the amounts had crossed the 100K amount. Well if you do any following of the market, you can guess what happened next. As they say in the war movies on a submarine, "dive, dive!"

When I looked last on Friday, the total had went down to around 97K, quite a precipitous drop. For some I know that is a terrible time to follow stocks, but I know I have over 20 years 'til I retire (unless I get lucky somewhere!), so this drop is really insignificant. In fact, as my latest retirement contributions were made at the close of Friday, that means I got more for my money. Perhaps next time it gets back up to $100K, I won't say anything - I think I jinxed it when I talked about it last time.

I had also sent some money in for a DRIP I have alomst 2 weeks ago, but the purchases are done only once every two weeks. Well the purchase was to be done this past Friday, so hopefully that worked to my favor as well.

Not much of a moral to the above, other than perhaps to say if you want guaranteed returns, work on being frugal. When you save money, it always goes right into your pocket.

These ideas are things that work for me, and they bounce around in my head and I mean to write them down here from time to time. Sorry, there is no overriding theme to this post, I just wanted to write these ideas up while I thought about them.
I have seen on some newsgroups where people ask how to save on water. If you want to be really frugal with water, take a shower with a bucket in the tub. It can catch a fair amount of the water being used during a shower. You can use that to flush the toilet. Depending on what your water rates are, that can make a minor or major savings. Also, where I live the sewage is based on your water reading, so less water in is less dollars out for sewage as well.
Look into doing mystery shopping work. It is a little hard to get started, but once you do, it is nice extra money. I do it for one restaurant, but not too often, and only when I want to. Ignoring the free meal (which is the best part of doing this), I get $25 for doing one, but the amount of work it takes to type everything they want (usually 3 hours) means I am making barely above minimum wage. I guess the point is do it if you like to do it, not to make a living, because you can't.
Go to yard sales. Of course if you live out away from lots of people this may not be practical. But if you're like me, and there are dozens of sales within 10 miles every saturday, go to them if you have nothing special to do! Or if all you would do is go to the mall, go yard saling instead. This past month I have bought clothes for a tiny fraction of their cost (a few were even new with tags still on them!), toys for kids (including a few still unopened at about a 75% discount), a couple tools (including a bench grinder for $5), and of course other things. I have a co-worker that says he just can't use clothes someone else wore. Of course the guy (while nice) is worse off financially than me, and he won't ever be able to catch up with me with that attitude. Oh well, to each their own.
Don't feel bad about going super frugal for a time, if the time is right. I mean, I *know* I am doing some things to save money that I know others wouldn't do, and thats ok. And I won't do them forever. But I'm living alone for the moment, so I can do it now, but I understand things will change sometime in the future. Thats ok, because I will have saved money now, and invested it, and will be doing great later.
OK, another frugal idea. Do you work someplace where you have a ton of paper towels available to just dry your hands and throw away? Well, you can just take what you use to dry your hands back to your desk and put them in your work bag to take home(assuming you have one), and then use them at home for things like cleaning windows. I was doing that today, and I used up the stockpile I built up the past few weeks. Its better than paying for paper towels, and better for the envirnment too (less waste).

Hopefully some of these thoughts / ideas can help someone out there.

Well some time back I stated I was going to try to do a credit card transfer at 0% and invest the money. I was sort of incredulous that a CC company would accept such a large overpayment, and then refund the overage. I called ahead of time, and they insisted they would. (Well someone on the phone *said* they would). Anyway, it all worked so easy I was amazed.

I now have the money in a bank making good CD rates for nine months. I make enough money to pay the monthly payments without a problem (they're 2%). And already I have signed up for a card where they will give you a $100 bonus for signing up, and it came with a 0% transfer check. I don't even have to move it through another credit card first! If I do this one (and I think I will), I will not put most of it in a CD, but leave it in high interest online bank accounts instead. While cutting down the earned money slightly, it will increase my liquidity immensly.

For anyone reading this and considering doing it yourself, make sure you understand all the ramifications (credit scores, investments should be super safe, liquidity issues, and more). And don't use the money for something else and then not have it to pay it back!!!! This isn't for everyone, but if you control your expenses correctly, it can work for you. Oh, one more thing - try to make sure and pay your monthly CC statements online. That way you are sure you have made every payment on time, otherwise you can lose your 0% rate very easily!

...is to teach it. This thought came to mind today. In the past I have taught courses on statistics, computer seminars, and other sundry classes. Its been a while since I have done it. I am not an extrovert, and I like sitting at a desk working on solving a software problem, which thankfully I get paid ok to do.

That said, the past few months I have been learning all types of things about finance. I was not totally clueless before, but this year I swore I would learn more about my money and do better than just being frugal. I would make sure I would make my money work hard for me.

As I have done this I have been giving impromptu lessons to a co-worker. I wasn't sure he was interested, but he keeps coming back for more, and today he said he was learning more in the past months then he knew for years (about money anyway). And I realized I was doing with him what I had done for years. I was teaching, and in doing so what I had learned was becoming solidly imprinted in my mind.

Its also nice to help someone while I am helping myself.

Hmmm, this weekend I did so-so on the yard sales. I picked up new work slacks for $1, a toy train set (my hobby) for $3, coaxial cable for free (looked like 25 feet), 6 old matchbox / hot wheel cars for $0.25 each, insulating foam in a can for $1.50, 2 lunch containers (to take lunch to work) for $0.50, and some other odds and ends. I think the total ended up about $12. All in all pretty good.

I ended up having to go back to the store (Staples) I got some software earlier in the week. The store charged $20 more than they were supposed to. After some looking about they realized there were two versions of the box with the software, and the one I got was for some reason bringing up the wrong price. No problem getting the money back, but one less trip would have been nice.

I returned my a book my ex-wife bought to the bookstore and used the store credit to get a DVD of a show by the BBC. While a lot of British TV is just plain weird, their documentaries are top notch. Its the 3rd documentary I got by them and I haven't been disappointed yet.

And I finished my latest toy train rebuild. I made a nice custom box car. Hey, it keeps me outta trouble!

Just a quick note here today for me. The items I add up on my spreadsheet as retirement money (includes retirement funds, pension contributions I can recover, bonds, CDs, and stocks(DRiPs), but not liquid savings and checking) passed $100K today. I know its an arbitrary number, but its nice to see my efforts starting to pay off. Especially after watching my retirement accounts dropping like a rock in 2002-03. And being job-less for a year thereafter.

I actually went out and spent some money today, but never fear, it was with coupons and on many of the items there are rebates. All the stuff had a regular price of about $160, and if they give me rebates like they promise, my cost will end up being $15. Now that I can handle.

Previously I wrote that I was trying to get money at 0% from a credit card offer and use it to invest (ok, put into a high interest CD) and make money. After reading how others do it, I thought I should experiement with this as well. Today the refund check arrived from the other CC company I had the money transferred to. It wasn't the amount initially transfered, but less about $150. I suspect that was my outstanding balance on the credit card. As far as I am concerned, that's a wash, so I really don't care about it, though I will check my account online to make sure.

Now I need to do some research on local banks and their CD rates so I am ready to move on Saturday. I know there are a couple banks giving about 5% nearby.

I'll be happier when I am not carrying this check around anymore. Then I can just watch it earn interest.

I believe life is what you put into it. I really do. Yet... there are times like now where the saying above really fits. While I don't have as large circle of friends and relatives as many do, of those I do have, perhaps the nicest relative died of cancer a few years ago, and now I am visiting this weekend the nicest friend, who looks to be suffering the same fate.

I know, "nice-ness" shouldn't determine who has to suffer this type of fate, but #%$# it all, it just ain't right. Neither one led any type of life that should have led to something like this. I guess you need to say to yourself at least I had people like this in my life for as long as they were.

I had some idle time today (always dangerous), and started thinking of what I was wearing yesterday, and then after adding up the cost, I expanded the thought, and went through most of my expenses for the day. I was mildly surprised at how well I had kept the costs down for the day. Perhaps this will encourage someone that it is possible to live very frugally.

With that introduction, here goes.
====================
What I was wearing:
====================
Shoes: Italian made dress shoes - $1 (yard sale)
Pants: Nice dress slacks - Free (thank you Free Cycle)
Belt: Nice leather one I have used for past year and still looks new - $1 (yard sale)
Shirt: Decent dress shirt $1 (Thirft Store)
Socks: Top of line dress socks - $0.50 (JC Penney)
Undies: Top of line (no more detail, sorry - lol) - $0.50 (JC Penney)
Glasses: Wal Mart - ($90 with insurance - but with flex spending account my after tax cost was about $65)
Beard Trim & haircut: Used home trimmer with hair attachments - Free
Skin moisturizer: Free (Thanks to Wal-Mart samples)

=========================================
And then other expenses during the day...
=========================================
Lunch: Drink ($0.17 for can from Aldis, Precooked meal I made from kit with added veggies & tuna ($0.75), navel orange ($0.25)) Total of $1.17
Gas to get to job: ~$3.50 (44 miles with my car getting 35 MPG)
Gym for mid-day workout (+ daily shower): $0.40 (rate is $8 for a month)

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Dinner:
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Salad (spinach, carrots, olives, mushrooms, dressing - $1),
drink (free - gift of a couple of cans of fruit drink from person I helped move over the weekend),
turkey sandwich (included free cheese from same person above - $0.50)

=======
Others
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Online Bill pay: Paid two bills - Saved $0.78 in postage.
Heating / cooling at home: $0 - spring time is nice, isn't it?
TV viewing: $0 (no cable - Watched DVDs I got for free via trade-in of unread books)
Trash: Dropped off trash & recycleables at county transfer station on way to work - Free - Saves $30/mo. fee of pickup company.

Note: JC Penney sends out a great coupon each Christmas for $10 off any purchase, so I get myself top of the line items for a little over $10, so thats how I can get them so cheap.

Whew, ok, there it is. I don't feel like I deprive myself. Some may say so, considering I don't have cable, but I really didn't watch much TV anyway, and I'm happier right now without it.

Well I was away from the blog for a bit, so what has been happening?? Lets see....


I went yard sale-ing two weeks ago. I found a very good replacement vacumn for $18 and it works much much better than the junker I have at home. It is bagless which I like. Plus I got a Samsonite carry-on roller luggage piece - like new - for $5. Tomorrow is another day of yard sales - great!
I got my new credit card, and according to the web site after confirming the card, I'm supposed to be getting my 0% $0 bank transfer to do some rate arbitrage. Hopefully this money will appear soon.
Went with my train hobby club for 3 days to do a major display, and boy, was I tired when it was all over. Glad I did it, and will be happy not to do that for some time. LOL
My clothing expenses so far this year - $3.00. Two shirts for a $1 at a thrift store closeout, and another shirt at a yard sale. I don't know how long I can keep this up, but when I open my closet I still see shirts and pants like new just waiting. Its nice to see this excess clothing not go to waste. (and putting the saved money to use for me)
I finally cut down how much I am paying on my mortgage, but I hated to do it. There is nothing nicer than seeing that number drop faster, but I realized cutting my extra payment down could help me buy other investments and help me more in the long run. Intellectually I know it, but emotionally I hate it.
I have my one-third of a year progress report on my net worth (should it be called "one-third annual report"?). My home equity is up almost $3K. DRIPs are up about $2K, and my retirement numbers are up almost $10K. Alot of the increases are due to investing savings, but the market has done well this year. Other savings (MM, CDs, checking) are down slightly, but not a major amount. Hmmm, if I can keep this up I will get an increase of $45K for the year. I could live with that.

Percentage-wise the increase for the three months is less than 4% which looks bad, but that is due to my net worth being heavily weighted by my home, and I haven't tried to re-estimate its value. I am using $400K for its value, though I know identical homes have sold for over $450K near by in the past year. Removing my home from the calculations, the net worth increased about 14% over four months. Now thats a pace I could enjoy seeing for some time.

I have read off and on how expensive pets are. You know the stories, those that say they can cost almost as much as a child. Seriously, I just read this stuff and wonder what in the world are they doing.
Anywho, in the theme of this blog (that is - savings!), here are my thoughts on ways to save with pets (and btw, I have a dog and cat, so that is where my history lies).
And one more thing, these are my thoughts on the subject. Don't take this as gospel or an expert's opinion. Take what makes sense to you, and if you think its out of line, ignore it! YMMV

Remember they may be part of the family, but they are dogs or cats. They don't look at the world like we do. They have sympathy, feelings, and all that, but really, all they want is warmth, companionship, fun, food, and a nice place to curl up. Oh, and perhaps some excitement once in a while. (and maybe a nice mouse for your cat to play with?)
They don't need expensive toys. For dogs, find used tennis balls at yard sales or near tennis courts. Dogs love them. For other toys, look at yard sales or thrift shops for cheap, but solid stuffed animals. If there is a little something wrong with the toy (a small stain perhaps), you can get it for less than a dollar usually. And the dog will love it. Just amke sure the stuffed animal is solidly sewn together, so it will hold up to rough-housing.
For cats, just try strings. They usually like them. My cat will amuse himself with tie bands from loaves of bread. I would try to buy him a toy for a dollar or two, but he kept going back to the tie band. I finally gave up, and he will play with them for hours.
For food, you can supplement their food (dry or canned) with certain types of scraps from meals. Especially dogs, as in the wild they will eat most everything of an animal if they are hungry. Of course use common sense here.
Check with your city or county to see if they have discount veterinary service. This is usually once or twice a year, so be ready to go when its available. For me I got a rabies shot for my dog a month ago for $10. But it was available for only 2 hours, so it was then or else, and I got us packed up and in the car when we needed to go.
Buy food in bulk (within reason)(and with a coupon). There is a site you can get a free food coupon. Go to: http://www.purinaone.com/30day_landing.asp

Take a few minutes and play him/her. Its free, you will make them happy, and it should make you happy. And isn't that why you got a pet in the first place?

OK, these were just a few thoughts. I haven't tried to come up with the costs for my dog and cat, but thinking it over, I would estimate they cost me maybe $250 last year. And people keep saying how good mannered they are, so I don't think I have made a mistake in how I care for them.
Again, YMMV.

Everybody needs a hobby, right? Even me, the super frugal guy has hobbies. Of course I try to keep it as inexpensive as possible.

This is just some ideas for your hobbies, as always YMMV. For those curious, I am currently into toy trains.


Find ways to make the items you collect, instead of just going out and buying at current retail. As for me, I buy old toy trains that need love and repair on ebay, especially pre-war metal trains. I get the pride of building my train cars, and having a little more invested emotionally into those train cars.
Find a local organization to join. For me, I joined a local modular club. We set up at many non-profit events during the year. Now I get to go to all of these things, enjoy myself, and I can enter these events for free! Of course there is work involved, but so what, it beats paying for a ticket at the door.
Be sensible. I mean, really, who needs 100s of {fill in the blank}. Even for me, while I like trains, I try to keep the collection sane. And in doing so, I keep my expenses down.
Find something similar to what you like. I used to be into baseball cards big time. Thankfully I didn't drop too much money into them. Anyway, I found a lot of fun with sports pocket schedules. They're similar to cards, and the cost is minor compared to cards. For other hobbies, maybe there is an inexpensive substitute?


OK, those were just a few ideas, I'm sure there are more out there.

And now a lil bit of good news: I was reading various financial forums, and someone wrote about a good tax deduction I was probably able to take in 2003 and didn't. I need to pull out my paperwork and see if I would qualify. It looks like if I did I should be able to get a few hundred back. Well that would certainly be nice for a change!

I'm sure most everyone here has read about the power of compounding, but sometimes when you see it in action, it really is surprising.

I write this after reviewing my first quarter numbers for my four retirement funds (ok, I know thats probably too many, but it was six different a year ago, so I look at this as progress!). Two of them are old accounts that I am letting stay where they are. In comparing those two I have one account that has been going gangbusters with a return for the quarter of about 10%. The other has been ok but nothing great, returning maybe 4-5%. But the great account was at about $10k at the start of the year, whereas the so-so account started the year at $25k. Since these are old retirement accounts, there are no new investments.

I compared the difference between the two accounts at the beginning of the year, and at the end of the quarter and found the dollar difference between the two barely budged, maybe a $50 change.

So what is this showing? Well with the head start of $15k, even with superior performances from the smaller account, it most likely will never catch up to the bigger account. This just falls right in line with what all the beginner's investing articles say, that investing early is very important, and compounding is certainly your friend.

And now... I'll return to cursing at my computers, as I am down to using backup number two (a $15 machine I got for the heck of it last year) to get onto the internet.

This isn't a story about controling your spending (I feel I already do that), but instead I was like most of the masses and didn't really keep that close track of how each asset I had was doing.

This past week I have been setting up online connections to each of my assets and trying to put together an overall worksheet with my net worth. (As an aside, I did have this already set up for my retirement funds and mortgage payments, everything else was tracked based on monthly statements.) Its amazing how some sites are so easy to work with, and others were made by some tech geek without a clue - BTW I am a tech geek, but with a clue!
Anyway, ignoring my home, car, and physical furnishings, my net worth looks to be over $111K at the end of March. Based on my memory (my official spreadsheet is encrypted on my computer at work), I started the year at about $101K, so thats a $10K increase for 3 months. Of that about $3,000 was due to investments in my retirement acct. Still, not bad.

Other news & notes:
I opened my fourth DRIP this past week. I got the opening statement for my Heinz account. It was only the minimum you could start with, but I wanted to get a foot in the door. With it, my total DRIPs come up to almost $8,000.After reading online about investing, and so many philosophies about it, I went today and bout my first investing book. It is Rule #1 by Phil Town. I make no claims about how good it is, but everything I read about it came across as a practical book for investors. Perhaps after reading it I can give my opinion of it.I am still touchy-feely when it comes to paying bills, but I am trying to learn. This week I set up my second bill (natural gas) to be paid online, saving me postage if nothing else. Today I got my water bill and noticed there is no way to pay online . Oh well, perhaps someday.And perhaps my biggest accomplishment, I got a co-worker to start putting money into his reitrement fund at work. He kept saying he couldn't afford it, but after seeing me these past few months tracking my funds, he finally admitted this was something he needed to do. Now he wasn't being that dumb about this, our employer doesn't match the 457 savings plan investments, instead it puts in a large amount into a pension plan instead. I can view this amount added by the employer at work, and so far they have put in at about a 6% rate. This rate changes every year based on actuarial calculations. I heard it is going to change to about 9%. In any case I have 2.5 years to go before I am vested into the plan.

Just a quickie follow up to the weekend. It was cold, but I did find a few yard sales. Nothing much that I wanted, I ended up spending $3 on minor tools and like new toys. Buying the stuff new would have cost around $25. The toys will be for kids when they are older. (Motto: Plan ahead!)

I have been reading up tonight on the concept of credit card bank transfer arbitrage (on the site www.fatwallet.com). Basically you use the 0% offers cards give you to have access to large amount of money to invest it (safe investments preferrably!), and then pay it off before it costs you. You keep the investment proceeds. My biggest quandry is how to get the money from the CCs, as they only want to do balance transfers. Having a CC balance sorta defeats the purpose of this. I think I know how to handle this, but I need to read more on this before I try this type of "investing".

If nothing else, its interesting reading.

OK, so its not a treasure hunt, but maybe, just maybe, the weather will be warm enough that yard sales will be starting tomorrow. After doing this for 4 years a big downside is that its become hard for me to get things that are truly useful. I have most everything (small) that I need. Its a waste to get the same things over again, so now I look for things like unique toys (toy trains anyone? ), tools, maybe a work shirt or belt.

Some weekends I get nothing, other times I hit the jackpot. One of the best from last year was when I found a lady selling her deceased husbands tools, filling a good portion of her basement. I spent maybe $100 and got power tools and lots of hand tools - retail would have been maybe $1000.

Thankfully I live in a decent suburb (not too dense but plenty dense enough) where I don’t have to travel far to get to yard sales to keep me amused for about 5 hours on a Saturday morning. Usually this can be done for me on less than a gallon of gas.

One thing to end this note on: if you have a child less than 5 years old, and you have yard sales available to you, you have gotta go. I see sooooooooo much of kids clothes and toys selling at pennies on the dollar. Not everywhere, but more than enough to never need to take kids to a retail store.

As always - YMMV.

Although I have had ideas that have saved money, one of the best (that is - highest impact) and easiest has been to work on my health.

You’ve probably heard that exercising is good for you, but you
haven’t really considered all the benefits (health and money wise) you can get from it.

Here is how I save with exercise. Of course my situation may be a little unique, your savings may not be nearly what mine are, and many people will not want to do everything I do, but still, this is just something to consider (read: your milage may vary).

My work place has a small gym that can be used at a rate of $8.00 / month. (Ok, I know this good rate isn’t available for everyone, so you’ll have to change the numbers to fit your situation.) I can use the shower at the gym and not shower at home. I can turn the water heater level down for days at a time (As I am by myself, I need only wash dishes once or twice a week.)

Here are my estimates in savings:

Fuel (natural gas for the water heater) $10/mo. (That was over a year ago, with higher prices today that might be $15 now.)
Water - This doesn’t save much, maybe $2.50 / mo. Still, it is a help.
Clothes - I have gotten my weight back down to where I can wear clothes that were good but I quickly out grew before I started in the gym. My clothing expenses last year were less than $100. Ok, this year my clothing expenses will probably go up, but not that much, maybe to $300? Still, for last year, if you say I was able to save about $360 for the year by using older (but still like new) clothes, that would be a savings of $30 / mo., although longer term this savings may be less. Also going to yard sales, smaller clothes are often sold as people gain weight, so losing weight gives you an
advantage in buying clothes really inexpensively that way.
Food - Once you lose some weight, and do those ab crunches, you feel full sooner than you used to. Its so hard to come up with a savings per month on the lower amount spent on food, but I will estimate a low $10 / mo. I think $2.50 less on food expenses a week is likely. Also this forces me to bring in my lunch every day. I would normally do this anyway, so no savings - it just enforces this to my mind to have my lunches ready each day.
Health - The past year my health expenses (other than insurance premiums) was one trip to the doctor ($15 co-pay) and a $20 co-pay for one prescription. Another one that is hard to estimate, but my health had to improve somewhat due to the exercise. If I guess one doctor visit and one prescription co-pay was avoided, I can estimate $3 / mo. savings.
One thing to note here - if you are doing any type of hard exercise (sports, weight lifting, or other intense exercise) there is always the chance of injury and a boat load of expenses that could follow.
This could mean the health savings are illusionary if you are not careful. So take that for what its worth.
Other savings - Not going out for expensive lunches with co-workers. This gives me an excuse to skip these outings if I desire, as I am now known for working out every day. I will do this occasionally, but can skip these. Savings of maybe 6 over a year, $20 per time, gives $10 / mo. on average.


OK, so what is the total:
Fuel: $15
Water: 2.50
Clothes $30
Food: $2.50
Health: $3
Other: $10
Cost: $8
Total benefits per month: ($55 savings + better health)

This is just food (or exercise in this case) for thought.

I had an idea typed up for today, but left it at work today - bleech. So for something completely different .....

As I have saved money I always like to have milestones. You know, like "Today I completely paid off my credit cards", "Next month I should have 100K saved up", "By 2008 I will have my mortgage paid off". Those type of things (note that none of those are true for me, they are just examples). Anywho... I was talking with a co-worker today, and I mentioned how one milestone I passed last year was that I had more money in my savings, stocks, retirement, and bonds combined than I owed in liabilities (my only liability was my mortgage). To me it was like the point where you can say "even if the worst happens, I have money to pay my house and not get kicked out".

OK, I know that statement wasn't exactly true. If I were to pull out my retirement funds I would lose 10% plus taxes. And of course there are living expenses and taxes, and so on. But the point was it was sort of a liberating point where I felt more in control. Does anyone have this type of esoteric milestones they use (or have used)?

I was reading various blogs, and a few discussed the stress of getting a renter for their (house, apartment, basement, ...). As I have a renter in my home now, I thought I should put my two cents in on the subject.

Since I have moved back to the US from living overseas (13 years ago) I have had renters in my house for 3 of those years, plus I have had renters living next to me often.

I have not had problems with renters in my home yet. One of the things I do is consider do I want to restrict the number of people renting from me (that is, charge a high amount) and take a chance, or charge less and and be picky on who I rent out to. So far I have gone the conservative route (charge less) and it has worked for me.

When I lived in my old townhome the neighboring home was rented out by this immigrant car salesman. When I saw him, which was seldom, he would always be friendly, and talk like he knew what he was doing. Well he would charge a high rent, and could only get people in that place that couldn't rent elsewhere (ie. had issues). They would cause a ruckus all the time, get visits from the police, and finally trash the house after living there for a year and move out. Mr. Brilliance would come in, fix up the house, and look at me like "Why are you upset with me?", and do the same thing over again. He wouldn't make any money because all his profits went into fixing the place after each set of renters left. I tried to explain it to the wife, but she thought her husband knew best.

About a year after I moved out I heard that the guy finally sold the place after losing so much money on it. I know people here wouldn't be as stupid as that, but it is painful when you have to live next to that nonsense.

As for my current renter, I advertised for less up front, and picked who I wanted, not who I could get. He likes the lower rent and decent location, and make a point to pay on time and even helps on any projects around the house (which has been rare).

I guess my point is, like investing, going the slow and steady way is the way to earn the most in renting out your real estate.

Normally I wouldn't care to write about the amount of groceries I spend each week. I don't really have a budget, instead I just observe what I am spending on, and make sure not to waste money (or at least not often).

Anyway, last week was a little different. I have found I usually spend about $25/week, and the past week was certainly very close, at $25.90 (Aldi's plus some loss leaders at another store). However, as I do mystery shop dining at a local restaurant from time to time, and did one this past week, my weekly expenses on food was a net of $0.90 due to my work on a shop this past week. They pay well ($25), but the work is hard (a few hours of typing). I thought it was cool to have a very inexpensive week.

This is just a little thought for the day.

One thing I haven't seen discussed often in the blogs is making the best of a bad situation. Usually it is on the lines of how to save, where/what to invest, how to get a better paying job, and so on. All excellent things to know or do. And some of them have helped me in the past year.

But what do you do when something bad happens? For me that happened a few years ago when I was laid off one day. Of course the first thing I did was apply for unemployment benefits. Next was start scouring the papers, employment centers, etc... looking for a job. But its not like you can be out trying to get a job every day 9 to 5. After a while there isn't that much you can do, but plug along and keep trying.

After a month or so I got to the point of asking "now what"? I looked at what I had available (extra time) and thought how could I make the best use of that. While different answers can come up for different people (classes, research, projects,...), I noticed my house needed a new roof. For the next four months I took my time and re-roofed my house by myself. Thankfully I had some money saved up for a rainy day, and while I would have liked to have kept the money in case something really bad happened, I looked at this as making an investment. Even if I needed to sell the house and move, I knew the ability to sell a house with a new roof would give a excellent return on the cost. It turned out to cost about $700 versus many thousands from various contracts. And by the next year I was able to get a new job (lower pay, but thankfully only a ~15% pay cut)

I guess this is just a little reminder to step back when you think something is bad and say "OK, now how can I make this work for me?"

That title question probably has a million different answers depending on the situation. I guess in this case what I am asking is, if you have a daily expense, and with not too much effort you can save 10%, wouldn't you do it?

For me that question comes up as I have been trying to car pool to work. Most people don't want to do it, or only if the amounts saved are really extreme. I now have someone I carpool with, but due to his schedule its only twice a week. And since he is half the way to work, the one day he drives I still have to go half way. So my savings are 10%, which is about 2/3 of a gallon of gas. Some people behave like its just not worth it, but I'm ok with it. Its not like I have to do it every day, and it is a saving.

I dunno, just a thought on my part. Saving 10% is worth it, isn't it? Right ... right?

This is just a quick thought, thinking ahead to summer. And by the way, this info is my take on things, your situation may vary.

For those of you owning a home, you know (or will some day) that one of the biggest costs you can have is getting a central a/c unit. The darn things are super expensive. Yet, what are you to do?

Years ago people did without a/c. In fact I grew up without it, though I lived in the mountains of PA, and it was always cool at night, so the most that would be needed to sleep at night might be a fan on occassion.

Well now I live near DC, and summer nights can be brutal, and certainly the days can be. So when I bought my house 8 years ago, and looked into a central a/c unit (yes, the system in this house was dead - that's why I got it so cheap!) the prices were more than I felt comfortable with. I had yet to build up any savings to handle a bad stretch, so I decided to do what everyone did where I grew up, look into a window a/c unit.

The cost of an a/c unit then was (I think) about $175. This could handle two rooms. I figured two of these could handle 2/3 of the house, and since there was only me and my wife, I didn't need more horsepower. Comparing this with the cost of a new central system ($3k to $5k) was a no brainer for me. And as I have come to understand, an even better decision than I realized.

I have co-workers that have new systems that have had them brake down within 3 years of installation, having to spend hundreds of dollars to fix. Then since they have a central system, they have to cool the whole house. Their bills, even with slightly higher SEER ratings on their central system (SEER is a rating for how efficient the unit is) have usually been 50% higher than my bills, and with houses my size or smaller.

One nice thing about my window units is I never worry about the cost of repair. I have yet have one break down on me, but if I do, I only need to go to the store and buy another, and they are cheaper and more efficient than they were 8 years ago!

The downsides have been few for me. Of course the window is now used by an AC unit, so you can't look out it. There is more noise from these units, though I don't feel its that bad. And to make them last longer and work better, I take them out each fall, open them and clean them out with a hose, put them back together and store them in the house.

And lastly I live by myself now (with a renter), and before with my wife. If you have a large family, this technique might not be as efficient for you.

I guess the moral of the story is to look at all the costs (a/c units - or anything else for that matter) when deciding on something expensive (or even cheap). I went the way that I was told wasn't the best, yet over that time I have saved thousands (unit costs + power bills).

(Warning: long story)

People here on the financial blogs talk about how to make the best retirement investments all the time. And one assumption is that the companies will be competent and get your money to you when the time comes. While that's probably true, let me pass along what I went through last year with these financial companies, and you can draw your own conclusions.

This started about a year ago when my prior employer contacted me indicating that I didn't have enough money in my money pension plan to keep it there on its own, and I would have to roll it over to a new account (to my current employer account or a custodial IRA - that may be the wrong term, but I think you know what I mean) The money had been there for 2 years with no problem, why it was an issue now I didn't know, but ok, I'll transfer the money.

Once I get the paperwork from the manager of my account I find I have well over the required amount to keep my funds where they are, and ask my employer about this.
I'm told the amount vested is not really that amount, actually less than the $5K required. So ok, I'll get what I can, roll it over, and life will go on. My larger current employer has 401ks available with three different fund companies, of which I am investing in two of them. I decide to roll over into funds controlled by company "A".

After getting help with the paperwork from the on site assistant from "A", I send the paperwork off to my old employer for them to write a check. About two weeks later a check arrives, for the whole amount of my money pension, not just the vested amount.
I wonder if this will actually fly, so I cross my fingers, give the check to the on site guy, and off the check goes (with a photo copy for me - and I needed it).

Being patient I wait, and wait, and wait (and almost forget about it). I was told this should take 2 weeks at most. After 6 weeks I contact the on site guy and ask him what is going on. He doesn't know and will check, and a day later contacts me indicating that the check was sent to the wrong department, but now will be going to the right location. Just give it another week. I give it two, and the money is still not showing up. I contact the guy again, and he indicates they have the money, but there is some problem, and it will be in my account in a day or two. Again, after a week no money. This time I contact my company's HR person for retirement funds. (Yeah, I know, I was too patient). This time I get the answer that they have lost the check, and can I get a new check from the other fund company?

Ugh, ok, so I call the prior company, give them the SOB story about what heppened. "Sure no problem, what was the account number?" I give them the number. I'm then asked for the amount of the prior check. At this point I wonder if they don't know and I could say anything and would they accept it???, but I decide not to test my luck. Sure enough a week later the check arrives (with the same amount as previously!). I give it to "on-site guy", and a week later the money shows up correctly in my accounts.

All's well that end's well, right? True... but I decide a month later to tempt fate. I have a small roll - over custodial IRA, and I decide I would like to have one less statement to look at.
After the fun with company "A", I try to roll this over into my funds with company "B", the other company I have a reitrement fund with at my current employer. As I start this, I find no better luck. Now company "B" insists I get papers from the original company I invested the funds with, so they can know it was a true 401k and is a proper roll over. Sounds good except my old company from 8 years earlier is no more. I try to have them get the information from the company holding the IRA currently. I mean, if this is so important, they should have the information, right? Well this company holding my roller over, call this one company "C", can't help them. This wouldn't be so absurd, except for the fact that company "B" *IS* company "C"!!!
If they think this information is needed, why the **** don't they have it themselves???

I'm about ready to give up on this, but on a lark I check with on-site guy from company "A", and he tells me the other company doesn't know the rules, and sure, they can put the money into my account. And this time he is going to double check what is happening for me. No problems from this point forward, and the money moves just fine.

If you've read this long winded story to this point, I hope you understand my "concerns" when it comes to actually getting my money when I retire. Intellectually I'm sure I'll get the money. Emotionally... thats another story.

Just a quick thought for tonight. If you don't think of things ahead of time, you may miss out on simple ways to save a few extra bucks.

What brought this to mind was a few months ago I had to replace two tires to have my car pass inspection. I tried to get a low price / decent quality tire. As I'm not Mr. Auto Fanatic, I'm not sure how I did, though I know I didn't do too bad. In any case, I remembered last time there was a tire disposal fee. I checked with my county disposal service before the tire change and found you could dump off tires for $1 each. So when the paperwork was being written up I paid attention for that, and saw they would charge $3/tire. I asked to have the tires left in my car, and then dropped them off at the dump myself for $1. Ok, not a large payoff ($4), but considering the cost (10 minutes of time & 3 extra miles of wear on car), I think it was a smart decision.

Moral of story: just think ahead to situations where you can save a few bucks easily.

Today I received in the mail evil twin of that sweet gal Ms. Housing Appreciation.

No, Ms. Tax Bill didn't arrive, but her friend Mrs. Real Estate Appraisal came. It seems my previous appraisal was a little low (actually I knew that, but I thought the system was jiggered that way). Well it came roaring back with about a 40% increase from last year. Yeah, the tax rates here are being lowered, but that ain't nearly going to compensate for this number. Live by the sword, and die by the sword I suppose.

Hopefully next time I will write something more interesting, I have too much to do tonight.