Don’t Forget to Make Money
The simplified formula for personal financial success is to spend less than you earn and invest the rest. Blogs like mine concentrate on the spend less part but don’t say much about the earning part. This makes sense since this is a frugality blog but I think the earning part of the personal finance formula is too often overlooked. I’m certainly guilty of it. It is one of the issues I addressed in my “I’m Frugal So Why Am I Poor” series of posts. Other personal finance bloggers are guilty of it as well. In many cases I think this is because they are already earning a better than average income and assume the spending part is what every one needs to address. If you’re only making $15,000 a year though you need to concentrate on earning more, not just on spending less. At that level if you manage to save 10% of your income it is only $1500. This is better than nothing but you’re not likely to ever become financially independent at that rate. I’m looking forward to finishing the semester so I can start concentrating on earning more money and making financial progress. There are probably plenty of others out there who need to concentrate on earning more as well. I’ve added a “Make Money with TFM” page to get the earning more started.
COPF #150 and FOF #123 Posts
The Carnival of Personal Finance is being hosted this week at Lazy Man and Money. It includes my post “Save Money,Save the Planet, By Not Having Kids.” The Festival of Frugality is being hosted at Sound Money Matters. It includes my post “Tracking Every Penny and My Non-Budget.” There are plenty of other good posts but I don’t have time to look at them right now since I should be studying instead of reading blog posts.
Making a Challenge Challenging
There are various bloggers out there who have no spending challenges. The typical no spend challenge isn’t very challenging for me though. I don’t have any desire to buy most things that aren’t allowed in a no spend challenge. The only tangible items I’ve bought this year besides food are detergent, toilet paper, and books. These were all necessary and I didn’t spend much money on them. The books were bought used for school and I’ll sell them again when I’m done with them. Entertainment is where I’ve been spending way too much money and I need to challenge myself to spend much less there next month. This will be complicated because I just started dating someone and I put dates in the entertainment category. She doesn’t expect me to spend a lot of money on her but when you first start dating you don’t want to be too cheap. Also my best friend is coming back to town after being out of town for a month and a half. We will be spending some money while hanging out and catching up. My goal for the month is just to spend less than my average monthly entertainment expenditure. This shouldn’t be too hard since my entertainment spending has been very high this year due to a vacation and excessive gambling.
There is also a May Grocery Challenge at Give Me Back My Five Bucks that I’m going to participate in. My goal will be to spend $50 in groceries for the month. This is what I usually budget but I’ve been going way over the past couple months. I’ve also been eating out too much. To make this challenge more challenging I’m not going to eat out unless it is on a date or with family or friends. I will try to keep those occasions reasonably limited. I won’t invite my friend or girlfriend out to eat just because I want to eat a meal out. These conditions should make this challenge challenging to keep.
Boost Your Economic Stimulus Check
There are a bunch of promotions offering 10% bonuses for using your economic stimulus check to fund a gift card with a retailer. Retailers offering the promotions include Kroger, Radio Shack, Supervalu, Sears, K-Mart, Home Depot, and Staples. If the supermarket names don’t sound familiar to you check the supermarket sites because they have several chains under the company name. Most of the bonuses work by giving a bonus of 10% on increments of $300.
This isn’t a deal if it causes you to spend more than you would otherwise. I’m not planning on making any large purchases so I don’t think I’ll be able to take advantage of this bonus. I could use it for groceries but it would take me a long time to use it all up. Also none of the participating supermarkets are located close to me and any savings would be negated by the extra driving. I’ll be getting my bonus by direct deposit rather than check but apparently it is still possible to take advantage of these deals even if you don’t receive an actual check. This Reuters article has a roundup of the various promotions.
It is Finals Time
I have completed classes for the semester and am now in the final exam period. I might miss a couple days posting over the next couple weeks because I need to make preparing for my exams a priority. In law school 100% of your grade is based on your final exam. This makes it hard to know how well you’re doing in class until after you take the final. Sometimes you can’t even be sure then, you have to wait until you get your grade. This semester I feel ok about two of my classes and am worried about the other two classes. I’ve already taken one final which I think I did well on. My feelings about how I’ve done on finals have been wrong in the past though, usually the result is worse than I expected. I’ve already been given a second chance at law school so I have to do well now. There won’t be a third chance. Wish me luck.
The Fisherman and The Investment Banker
When I was reading some books for my trip to Cancun I came across the following story. I had read it previously and it has been around for many years but I like it so I decided to share it for those of you who haven’t read it yet.
The American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.
The fisherman replied, only a little while.
The American then asked why didn’t he stay out longer and catch more fish?
The Mexican said he had enough to support his family’s immediate needs.
The American then asked, “but what do you do with the rest of your time?”
The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos, I have a full and busy life.”
The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and with the proceeds, buy a bigger boat with the proceeds from the bigger boat you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then LA and eventually NYC where you will run your expanding enterprise.”
The Mexican fisherman asked, “But, how long will this all take?”
To which the American replied, “15-20 years.” “But what then?”
The American laughed and said that’s the best part. “When the time is right you would announce an IPO and sell your company stock to the public and become very rich, you would make millions.”
“Millions.. Then what?”
The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”
This story is an oversimplification but not far from the truth . My ideal life would be just about as simple as the Mexican Fisherman’s.
The Power of Blogging
Sometimes I am pleasantly surprised when I blog about a company and then get a response from that company. My blogs only get a few thousand visitors per month, they don’t get anywhere near the traffic of the major blogs but they somehow get the attention of these companies. I suppose they have someone doing blog searches for the company name.
At my other blog Bank Bonuses I wrote about the problems I had with Revolution Money Exchange. I signed up for the service but I wasn’t able to complete the registration because I have a fraud alert on my credit report. They were supposed to send me an email telling me how to complete my registration but apparently it went to my spam folder. My emails to customer service went unanswered and calls to customer service were met with the reply to just wait for the email. After blogging about my experience though I received an email from Revolution Money Exchange explaining there had been some problems with their contact form and apologizing for my problems. They approved my account so I could complete my registration. This improved my opinion of them but made me wonder what would have happened if I didn’t have a blog. I might never have been able to open an account. Since this company is an alternative to PayPal,which I’m not a big fan of, I’m willing to give them the benefit of the doubt. If you want to give them a try I’ve added a sign up button in my sidebar.
Tracking Every Penny and My Non Budget
Over at My Two Dollars last week David wrote a post arguing against what he called “Watching Every Last Penny Syndrome.” Since I track every penny I spend and earn I have to disagree with that post. This is something I started doing after reading “Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence
That being said I don’t budget every penny. I just keep track of what I spend and when my spending gets out of line in a certain category I adjust my spending accordingly. Stephanie at Poorer than You uses a similar system and Nick at Punny Money has his own variation of the system. This system works well for me but it won’t work for everybody. You need to determine what kind of budgeting system works best for you.
Frugality Picks and a Meme
This weeks edition of the Festival of Frugality is hosted at On Financial Success. It includes my post “Do Reward Cards Actually Reward You.” Some of my favorites from the rest include:
“Inconspicuous Consumption” from Money Changes Things. Not buying stuff in the first place is even better than recycling.
“10 Frugal and Eco-Friendly Ideas” from Monroe on a Budget. This post shows the overlap between frugal and green.
“5 Things You Shouldn’t Go Cheap On” from Know the Ledge. I mostly agree with these but there are always exceptions.
I also got tagged for a meme by Cricket at Being Booga. I’m a little late in replying but here are 3 random things about me.
- I’ve run 4 marathons despite being overweight and out-of-shape.
- I’ve hiked over 1000 miles on the Appalachian Trail and I still have a goal of hiking the whole thing one day.
- I was an extra in the movies “The Alamo” and “The Ringer.”
I’m not going to tag anyone else but if you feel like sharing go ahead.
Save Money, Save the Planet, By Not Having Children?
In honor of Earth Day I decided to post on a topic that can save money and help the environment. Choosing to not have children can do both of those things.
According to a report from the USDA it costs almost $200,000 to raise a child to age 17 in the United States. Many consider this figure to be misleadingly high. I certainly don’t know where the $200,000 I’ve saved from not having children is. Even if that figure is high there is a considerable financial cost to having children. The decision to have children isn’t primarily a financial decision but the financial consequences should be considered when deciding to have children.
The concept of not having children to help the environment seems outrageous to many but it is a logical idea. No matter how green you are you’re unlikely to be able to offset the environmental cost of adding another child to the world population. This is especially true here in the United States where individuals do much more damage to the environment than in developing countries.
This would be a voluntary decision not like the mandatory population control they have in China. Nevertheless, in the articles I read while researching this topic many people seem to think that people voluntarily deciding to not have children will lead to government mandated programs. People seem to think this idea is an attack on humanity. I don’t see it that way and think this is a reasonable idea. Most people will probably disagree so there is still going to be plenty of people.
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