My accountant suggested that we hire my daughter. Legally, you can hire kids when they are 7 years old to do basic tasks like filing or cleaning up. My daughter was only five. He told me to set up a photo shoot and use her pictures for advertising purposes. I could then pay her as a model. He said to think of child actors and models in Hollywood and how much they were paid for services. It was perfectly legal, and he said he would go to bat on that any day. Good enough for me.

We did hire a photographer and had a photo session. My business paid our daughter $5000 (she is pretty cute). Since it was earned income, we set up a Roth IRA and put the money there. She can use the contributions for things like college, or it can stay, gathering interest, until she is 59.5 or older. You can do the math on to see that it will be a good chunk of change, and something I would never have though of without the accountant’s suggestion. Thanks, Bruce.

We did withhold taxes. I guess we didn’t have to on that amount, but I’ve never hired a five year old. This was new ground. As a result, our daughter filed a tax return, and got a refund!  The accountant filed it as a courtesy, so I really didn’t think about it until we got two checks in the mail; $224 from the state, and $884 from the fed, made out to our six year old. It was pretty fun to have her sign her name to endorse them.

Well, now we have an extra $1108 that I was not expecting. It can’t be put into the Roth, so we’ve narrowed it down to three options. Since this is technically money meant for our daughter, I want it to be used for her benefit. If we had consumer debt, I’d have no problem using it toward that, as this would benefit the whole family. Luckily, we already crossed that bridge.

Our options:

1. Contribute the amount to her 529 plan. The money would grow tax free, but if she didn’t go to college, we’d get a penalty to use it for something else. Like Shannon at the Heavy Purse said this week, college isn’t for everyone.

2. Invest the money in dividend stocks. Interest would be taxed, but she could use it for school or something else we deem worthwhile in the future. If she drops out of school to play tambourine in a folk band, we could keep the money for ourselves.

3. Put it in the travel fund for a family trip. This would not earn much interest, but we’ve determined that family travel is a valued use of our money. This could fund a small trip or a portion of a bigger one.

I need your help. If you found $1100 to be used in the best interest of a six year old, which option would you choose? Or would you just go and blow it all on a swing set or one of those electric kiddie Hummers?

If you choose the stock option, what is your favorite one right now?

Image: Freedigitalphotos.net/Dominici

This is a guest post from Troy at The Financial Economist. If you’d like to guest post, please contact me. 

Yes, you did read the title correctly. In order to make profitable investments, you do not need to predict the future. I understand that at this point, what I’m saying doesn’t make much sense. Let me elaborate.

Most investors are accustomed to predicting the future of the stock market – where will it be in the next 3 months, 6 months, 1 year, etc. They do “research” online, and come up with all these predictions backed up with fancy data. However, I prefer to invest differently.

I’m not a very smart guy – I literally spent a year preparing for my SAT’s, just to get a meager 1490 (considering the effort v. reward ratio, my score was disappointing). Hence, my brainpower (or lack of) doesn’t let me predict the future like all those Harvard MBA analysts on Wall Street can. My investment style is simple and straightforward: instead of predicting what the economy will be like in the next 3 months or 6 months, I just recognize the fundamentals when they appear. Now you’re probably asking “How does simply recognizing reality give you an edge? You’re not ahead of the curve at all!”

Truth is, you don’t have to be ahead of the curve to make money, because often times the market is behind the curve. Often times, the market will ignore reality and continue on its disillusionment, as in the case with bubbles and market panics. Here’s how to make profitable investments without predicting the future.

1. Recognize a divergence between the real fundamental situation and what the market only wants to see.
2. Don’t invest just yet – other investors can carry on their disbelief of reality for a long time, and as long as no one cares, the market will not converge with the fundamentals.
3. Continue investing on the side of the market hysteria until it ends, even when you clearly see that the fundamentals and the market have diverged. It’s painful to be a benchwarmer and watch the game from the outside.
4. Wait until people are forced to notice the fundamentals – when the fundamentals are so obvious that like a 300 pound gorilla, you can’t do anything except care. This sudden change in investors’ perception of the fundamentals is evident because volatility spikes. Wait until people start to care. Then start thinking contrarian investing.
5. The key isn’t in knowing that an investment hypothesis is correct, but in knowing the investment is correct right now.

As a corollary, I’d like to add two side notes:

1. This investment style is only applicable for major market turning points, when the fundamentals & price diverge. When the fundamentals and price trend are aligned, the market is not moving against reality.
2. A big component of this style is that the market doesn’t care whether the economy is good or bad. The market only cares whether the economy is better or worse. Thus, less negativity in the economy means bullishness, contrary to what logic would have us believe.

Here’s an example. From 2010 – 2013, the Euro problem has never been solved. At random times, the Euro will tank and European interest rates will skyrocket because people are FORCED to care when reality has strayed too far from belief.

Welcome to the Future..

We’ve already established that you only need to recognize the future – you don’t need to predict it. The important question is, how does one recognize the current fundamentals as soon as possible?

Most economic indicators tend to be useless – I’m not questioning the accuracy of their measurements, although sometimes the numbers do seem to be oddly skewed (hey, at least our data is better than Chinese economic “data”!). The problem with most economic indicators is that they come out a month or two after the events have already happened! February’s economic data might be released in April, a whole 2 months after February’s over. What good is data that’s 2 months old? It’s almost useless for investment purposes. There is a solution to this problem though – gauge the economy via real time sources:

1. I follow serious business leaders who are in-tune with the business community and are known to speak the truth, such as Jack Welch.
2. I watch closely what the likes of Jeff Gundlach (the bond king), Ray Dalio (the investment god) and other serious thinkers have to say.
3. I pay special attention to people who speak out against the trend, especially if speaking out does NOT ENTAIL any personal gain. For example, banks were pretty much Ground Zero for the 2008/2009 financial crisis. In February 2009, a lot of CEO’s in the major banks came out to say that things weren’t actually as bad as expected. By saying so, they literally put their lives on the line – lying would be like committing suicide.
4. For perennial bulls like Warren Buffett, I probably don’t give a toot about his “Don’t Bet Against America” speeches. But on the rear occasion that he’s bearish – something that you don’t see every day – then red flags should start going off in your head.

Like this post? Read more about finance and investing on Troy’s blog, The Financial Economist. Cheers!

Image: Freedigitalphotos.net/Vuono

Image: Freedigitalphotos.net

One of the fun parts of having a blog is being able to see the search terms that people use to find whatever it is they are looking for. Some of them are quite comical. My two recent favorites have been Wow, I paid off my cat and Do snakes smell like burnt rubber. Why on earth those landed here, I’ll never know, but I do know that by and large my biggest search term is related to paying off credit card debt. My most popular post is my story of paying off over $30,000 in credit card debt. Obviously, there are lots of folks out there who are struggling to pay off their credit cards. I think there are tons of resources to help you with that plan, but how do you stay out of debt once you have paid it off?

Shhhh….

I have another secret confession. The amount of debt we paid off over the past two years is not cumulative. There were two other times in years past when we paid off our credit cards. Once, we paid off $8,000, and another time, it was $12,000. Early on, we knew credit card debt was not a great habit, but after we paid off our balances on those occasions, we ran them up again. Why can’t people stay out of credit card debt?

I’ve Got All Kinds of Money!

I think when we reach a major goal like paying off credit card debt, it is usually through some struggle and sacrifice. You’ve cut out all unnecessary spending to focus on a goal. After the payment is gone, you suddenly find yourself with more money in your pocket. Advertisers and society try to rope you into spending it. People may tell you to reward yourself, or you only live once.  Almost every business offers financing. How many people do you know who struggle with finances and then go out and buy a new car?

How Do I Stay Out of Debt?

Spending is like any other vice. Maybe there isn’t a surgeon general’s warning at the cash register, but if you think worrying over paying bills doesn’t affect your health, then I’ve got some beach front property in Colorado I want to sell you. If you aren’t ready to change your thinking and habits, you’ll never get out of debt. It’s just like losing weight or quitting smoking, you have to have good reasons and be ready to change. If you do it because someone told you to or because you think it’s temporary, you’ll never succeed.

Make Sure You’re on the Same Page as Your Partner- If you’re in a relationship, you don’t have to agree on everything, but you need to have the same basic goals about money. Glen at Monster Piggy Bank mentioned a couple who each spend money as fast as they can so the other one can’t get to it. It reminds me of the circus act where the guy has multiple plates spinning, and it gets harder and harder to keep them all in motion. This lifestyle might work when the money is rolling in, but if it stops, all the spinning plates come tumbling down. If you and  your significant other are never going to be on the same page, it might be best to cut your losses.

Surround Yourself with Like Minded People- Sadly, your friends and family might not understand or support your quest to be debt free. They might even be jealous if they have debt problems themselves. It’s much easier to knock someone off their pedestal than climb up to join them. Trying to quit drinking while hanging out at the bar makes it that much harder to stay sober. Likewise, if you continue to hang out with your friends who continue to spend money, you will be tempted to pull out the credit card.  If you can’t find people who share your ideas, look online. I’ve been thankful to find a great community of financially savvy people who are striving for similar goals.

Follow the Golden Financial Rules-  Really, they work for any income and any amount of debt. Some people might need longer than others, but if you follow a few simple rules, it is possible to stay debt free.

• Set up a budget by tracking your spending,
• Spend less than you earn.
• Evaluate every purchase as a want versus a need, and don’t buy wants unless they add value to your life. If you lack will power, stay away from the stores or don’t look online.
• Start saving for emergencies so you won’t have to use credit if something goes wrong.

While these rules are simple, they do involve some major life changes for lifelong spenders. If you are used to having a new car every three years, you might have to learn to love an older vehicle. If you pay too much in rent, you might have to move. You might have to tell your children that they don’t need the latest gadget. You might not be popular. What you will be is debt free, and that gives you all the choices that making credit card payments never will.

Tell the truth, have you ever paid off your credit cards only to find yourself back in debt? What is the biggest reason people can’t stay out of debt?

We never know what sort of note we’re going to find.

We’ve almost made it to the end of our daughter’s first year of school. It still seems like she should be toddling around with a pacifier, but she is almost a kindergarten graduate and ready to move on to the big time world of first grade. While, I’ve certainly spoken out about some issues with public school and the guilt trips that get thrown your way (please buy a t-shirt, water bottle, pizza kit to support our school!), it really is amazing what a year in kindergarten can do for a kid.

Wow, Mom, I Can Read That

Yes, my kindergartener has been reading since this past winter. I’d love to say it’s because we’ve  read to her since she was one day old, but kindergarten really takes credit for this huge achievement. She knew some letters and basic words going in, but now she can read and write just about anything. As you can see from the signs she leaves all over the house, the spelling hasn’t quite caught up, but I’m sure it will come later. She is super excited to come home almost daily with new words that she can read and recognize.

How Did You Get 24 Kids to Do That?

When I’ve been a visitor to my daughter’s class, it is amazing how well behaved and organized the classroom is. I’ve watched one teacher get all 24 kids to sit still and orderly while she counted out and distributed candy that was gathered from the homecoming parade. When I have a hard time getting one kid to brush her teeth or pick up toys, this is a truly amazing feat, and I was in awe. Kindergarten teachers are the true rock stars of the world.

Practical Life Lessons

Kindergarten has been a great way to learn life lessons. One day we were running late and didn’t make it before the final bell rang. I was mortified, because being punctual is very important for me. I don’t think it ever really sunk in to my six year old, though, until she had to stand in line for a tardy slip and then be late for class. We also talked about how being late affects the teacher’s plans for the day by disrupting them when someone walks in after class has started. Since then, she has been up and ready with minimal argument.

We’ve also used the school book fairs as financial teaching tools. I believe they have had four fairs this year.  Before a book fair, the kids get a flyer with all the books that will be available for purchase and how much they cost. We have let our daughter use her own money if she wants to buy a book. She studies the prices and decides which one she can afford. She also doesn’t want nearly as much if it’s her own money. Sometimes, she decides to save her money, and we get library books instead.

The other really neat thing kindergarten has taught her is that you can be rewarded for good behavior. All the students have a card for each day. You get one warning if you misbehave, and then the card is “turned”. A behavior folder is sent home daily with either a star for good behavior or an explanation of why the student’s card was turned. Parents have to sign every day that they saw the folder. If the student’s folder is signed every day for the week, a prize can be chosen from the prize box. I think it’s a good lesson that shows consequences for your actions. Do the right thing, you get a reward. Don’t behave, and you get nothing.

I often wonder when life stops being this simple. Is it because we make it harder or is it really that hard? I know that the problems you face as an adult are more complex than sharing toys and not speaking out of turn, but can’t we apply these same kindergarten concepts to real life?

-Enjoy every day, and cherish learning new skills.

-Think about how your actions affect not only yourself, but others.

-You can’t buy things you don’t have money for.

-You don’t always have to buy something because it’s offered.

-There is always a consequence for your behavior, whether it’s realized today or down the road.

When life seems complicated or when we are having a hard time with a decision, maybe we should remember what we learned from kindergarten. It might be surprising how simple the answers can be.

What adult decisions can you trace back to kindergarten? Do you think we make our lives more complicated than they have to be?

Image: Freedigitalphotos.net

The following is a guest post from Liran Hirschkorn. If you would like to submit a guest post, please contact me.

A big perk for many employees is finding a job that offers life insurance through an employer based group plan or a similar. These policies can be great because they are often cheaper (or free) to the employee and usually don’t require a medical exam, which are added benefits if you are young, or have pre-existing conditions that would raise the cost of an individual term. However, there are also downsides to these group policies offered by an employer that may make you think twice about having one as your primary source of life insurance.

Constricting Terms and Benefits

Since group policies can include a large number of people they are often very limited when it comes to benefits, coverage, and options.

• Benefits: You’ll be hard pressed to find a group plan that is rich in benefits. Typically they’ll only over the basic plan, with some options to improve coverage if you’d like to follow up with them, but that’s it. There are rarely any riders, funeral expense, death from accident, or other benefits available in a group plan.

• Coverage: Many group life insurance policies that are offered through an employer are determined by your current salary. While the numbers vary, you can expect to find coverage between one and three times your base salary for a group policy. For most employees using a group policy, this will not be enough to support their family for an extended period of time. Group policies are also very limiting and if you need high risk life insurance or another specialty policy you’ll find yourself wanting more often than not with a group policy.

• Options: This is the biggest limiting factor in my opinion, and that is your lack of options. You’re stuck with whichever your employer chose and that’s it. No shopping around or comparing different group policies; what you see is what you get. You can’t just assume that your employer bought the best policy available either. They could mean well but could still be ignorant and provide a policy that will be difficult for your beneficiary to collect on or provides little help.

Shopping around for an individual term gives you the benefit of comparing multiple providers side by side, and leaves you access to choose the best policy for you. With group policies, what you see is what you get, and improvements to coverage are more limited than those in an individual plan.

Changing Jobs and Careers

An individual, term policy will stick with you for whatever the predetermined amount of time is not matter where you go or what job you have. This is not the case for an employer based group policy. If you change careers or jobs you could quickly find yourself without life insurance or with a new policy from a new employer that is drastically different or more limiting with your old one. Needless to say, an individual plan is more stable and can help to take the headache out of figuring out your life insurance after every job change. Plus, what happens to your group life insurance when you finally decide to retire?

Group policies can be a great option for those looking for cheap (or free) life insurance, people who have a preexisting condition that an individual policy wouldn’t cover, or a younger people who don’t feel like they need a life insurance policy yet but wouldn’t mind having one. There are other situations where a group policy can be beneficial as well, and this is why you need to look at all of your options before choosing to go with one policy over another.

Liran Hirschkorn is the founder of ChooseTerm.com and is an expert in the insurance industry where we works hand in hand with the best life insurance companies.

Image: Freedigitalphotos.net

May is the first month in well over a decade when the Eyes on the Dollar household hasn’t had to make a student loan payment. While we certainly took our eyes off the dollar in paying those loans back, I wanted to share some final thoughts on student loans and why I think it’s important to consider all of your options before you do something big like consolidating or even paying them off. We’ve made our share of financial mistakes, but a huge one was losing $6000 because we consolidated the wrong loans. Hopefully you can use our mistakes to save yourself some serious money.

Student Loan Forgiveness

If you work full time in certain occupations, you could be eligible for loan forgiveness. Keep in mind, this is for the US only, and I don’t have enough room to include all the details. You’ll need to research them if one seems like it could work for you.

Public Service Loan Forgiveness- This is the newest loan forgiveness program that was put into place in 2007. Basically if you work for the federal, state, or local government or for a tax exempt non-profit organization, you could be eligible for this program.  If you make 120 consecutive, on time payments, the balance of your loans are forgiven. In order to maximize the benefit, you would need to make the lowest possible payment, usually the income based option. You also cannot put loans into deferment or forbearance. I would not bother with this for small loan amounts, but if you have tons of student loan debt and work in this type of job, it is worth looking into.

Teacher Loan Forgiveness-If your student loans were first dispersed after October 1, 1998 and you teach in a low income or Title I school for five consecutive years, you could be eligible for this program. If you teach math or science in a secondary school or special education, you can qualify for up to $17,500 in loan forgiveness of certain federal loans. If you teach in an elementary classroom or teach a non-math or science subject related to your major, you can receive up to $5000. We almost got this one, but Jim’s first loan was dispersed in 1997, so we missed it by one year.

Perkins Loan Cancellation-If you hold a public sector job, like a head start teacher, law enforcement officer, an attorney who works as a public defender, a nurse, teacher in a low income school, or volunteer for organizations like the Peace Corps, you could be eligible to cancel a percentage of your Perkins Loans. This one is a bit complicated, but Jim would have been eligible if we hadn’t consolidated his loans with a private company. Because we did that, he missed out on about $6000 in loan cancellation. If you think you might be eligible someday for this program, then don’t consolidate your loans or consolidate them through the Federal government’s  Direct Consolidation Loan Program.

If you call the government for information, make sure you get the terms correct. I asked about Perkins Loan forgiveness, and the lady kept telling me there was no such program. I knew I’d seen it online, so I made her stay on the phone while I looked it up. I realized it was called cancellation instead of forgiveness, and she then gave me information. Honestly, when calling the government for anything, if you don’t get the answers you need, call again. Eventually you’ll get someone who knows or is willing to help you out.

National Health Service Corps Loan Forgiveness-If you are a medical or dental professional, you could qualify for loan forgiveness by working in an approved site for two years. Generally, these are places where the population is under served. If approved, this program offers forgiveness for federal and private student loans.

Consolidating Loans

Consolidating loans can be a smart move if you are concerned about variable interest rates. Keep in mind that when you consolidate, the rate is based on an average of all your rates for various types of loans. If you have some loans sitting at a very low rate, you might want to leave those out because the higher rate ones are going to increase the over all interest you’ll be paying. Consolidation offers you the ability of one convenient payment, but the term usually stretches to 20 years or more. Of course you can pay more than the minimum payment, but we fell into the trap of not doing that. Our loans were like that Titanic song, they went on and on.  Also, don’t miss out on cancellation or forgiveness options because you consolidated with the wrong company.

Should You Invest While You Have Student Loans?

I’ll take the easy way out and say, it depends. If you have a small amount of student loans that you can knock out in a year or a large amount  that you are willing to sleep on a couch and eat ramen to pay off quickly, then I’d say get the student loans done before you’re old and gray. However, I would never pass up a company match on a 401k to pay off student loans. I also would not lose years of compound interest to pay off a student loan that has a reasonable rate.  I would certainly buy a house with interest rates at all time lows if that is a goal you have.  Waiting 5-10 years to pay of student loans before you buy real estate or start investing in retirement is too long in my opinion. However, if you start to adjust your lifestyle upwards before you pay for your education, you could end up on AARP while sill paying off student loans.

I’m sure there are other loan forgiveness programs that I’ve missed. If you’re like me and work for yourself, you don’t qualify anyway. You might as well get used to the idea of paying off your debt. In conclusion, I think looking at the long term picture before you make any big decisions about your student loans is very important. Otherwise, you could be like us and lose $6000 because you made a hasty decision.

Have you qualified for any type of student loan forgiveness? Would you invest or buy a home while still paying off student loans?

I’ve gotten several searches to my site along the lines of “I hate optometry” or “my optometry job is boring”. I really think those doctors are the ones that spit out prescriptions all day and never deal with any health issues. Eyes can tell you so much about the rest of your body if you do a little sleuthing and ask the right questions. It’s never fun to tell someone they might have diabetes or multiple sclerosis, but it does bond you to that patient in a certain way, and you feel the need to participate in their care and get them to the right specialist to keep them as healthy as possible. Eyeballs have been keeping me excited for almost 14 years. I’m really lucky to enjoy what I do, even if that makes me the biggest nerd on the planet..

Giveaways

I am co-hosting a giveaway for a sweet HDTV that runs until May 31st.

Tonya is celebrating her 1 year blogiversary at Budget and the Beach and is giving away $50 cash and a $15 Starbucks gift card.

Michelle at Making Sense of Cents is giving away $40 to spend at Novica.

 Mentions

These fine bloggers were kind enough to mention me this week. My your eyes always be in good health!

The Random Path

Canadian Budget Binder

Fearless Men

Fat Guy Skinny Wallet

Frugal Rules

Money Beagle

Fun Search Terms

2009 wrong way crash- Those tricky one way streets can get you every time.

half way down with furniture payment could they half the payment- I think you have to be all the way down with it before they do that, G.

how much cost girls- Wrong site, buddy!

i miss having money- Then get on a budget and start saving!

what to do when you owe a ridiculous amount of income tax- Head to Mexico?

20/20 Posts of the Week

My Six Thousand Dollar Boat Ride at The Wise Dollar. No it wasn’t even on a Carnival Cruise

How I Quit My Day Job at We Only Do This Once. Yay Tony! What a difference a year can make.

30 Years and 30 Life Lessons at Fearless Men. I should come up with 40 for my birthday next year. How time flies!

Junk to Funk: Some Woman Down the Road Left Me With Hardwood at Canadian Budget Binder. Can’t wait to see the search terms on that one.

Things I Need to Add to My To-Do List at Money Beagle. Maybe my to do list needs to be re-prioritized?

Have a great weekend and be kind to those eyeballs!

Image:Freedigitalphotos.net/Vuono

Let me say that this person came highly qualified, has lots of experience cleaning houses like mine, and agreed to the price I offered. I have no doubt she will clean my house to the standards I’ve come to expect. I also know she’ll be on time and won’t give me a crap load of excuses about why she can’t do a particular task. Where did I find this amazing person? I didn’t have to look far, as I’ve hired myself.

What? How can you hire yourself? Before you start throwing virtual tomatoes at me, let me explain. I’ve always hated house cleaning because it seemed like work that had to be done but brought little gratification. Sometimes my husband notices and makes a remark about the house looking nice, but we often forget to compliment the ones we love for tasks we take for granted. I’ve never not cleaned the house, so there really wasn’t any other standard to compare to. I just hated doing it.

We’ve been going back and forth about hiring help. We have come a long way in our journey toward becoming financially independent. The last remaining obstacle in our minds is the mortgage. If we didn’t have that payment, we could pretty much live on peanuts. Yes, I know the arguments for and against paying off a mortgage, but it makes sense for us, and we were already on track to have it paid off in the next 6 or so years.

I’m going to pay myself the $200/month that a maid would cost and add that to our mortgage payment. Playing  with the numbers on the Club Thrifty Mortgage Murder Spreadsheet says we can shave an extra 6 months off our payoff date.

I realize this is a Jedi mind trick and that the money would have been mine to use however I wanted anyway, but by acknowledging that cleaning the house is worth $200 a month toward our debt payoff, it changes my whole mindset about the idea of a maid.

When you are trying to live a different lifestyle from most of the world by getting rid of debt and becoming financially secure, you have to think outside the box. The world sees me as a doctor and my husband as a professional who just got a big raise. Heck, the local paper did an article about him and his new job. We should be splurging on a new car, boat, or at least some hired help. In year’s past, I thought this way too, and it got me nowhere but in debt. Spending newly acquired money on something frivolous for the here and now feels great for about five seconds, then you have to look for the next thing to scratch the itch.

If you are struggling with debt, life can seem really boring. All work and no play eats away at your psyche, but you can come up with creative ways to boost morale. Instead of thinking about deprivation, think about how much your are paying yourself to be the maid, the entertainer, or the cook.

I have no problem with hiring help for things you don’t like to do or don’t have time for, as long as you’ve evaluated why and aren’t going into debt to pay for it. Having hired help just because the neighbors do is not a good reason. In my case, I’m now happy to be employed as the maid. It will get me to the place I want to be a whole half year sooner. After that, who knows? Maybe I’ll get someone to clean my house AND cook my meals. Being financially independent brings lots of choices!

What is something you hate to do, but won’t pay someone else to do it? 

 Image: Freedigitalphotos.net/artur84

Image: Freedigitalphotos.net/Miles

If you’re a Mom or if you have a Mom, you probably know that we will like whatever you give us for Mother’s Day (unless it’s a mop). I do love handmade gifts from my daughter or a dinner cooked by someone else. However, it might be a good idea to get Mom or Grandma engaged in the 21st century by giving an electronic gift this year.

I recently used some of my credit card reward points to get a Kindle Fire. Let me say that I am not very tech savvy, but it’s about the easiest thing I’ve ever used. I love to multitask, so I can watch shows or read books while I’m using the exercise bike or waiting for my daughter to finish dance class. Yes, you can spend a fortune on buying things from Amazon, but you can also sync it up to your local library to check books, and Netflix, Hulu, or Amazon Prime are pretty affordable for watching shows or movies.

E readers are also great for senior citizens because you can change the font to a larger type. We have several patients with macular degeneration who have trouble with standard print, but are able to read on a Kindle or similar device. Yes, you can get big print books, but everything isn’t always readily available in this format. Plus, large print books are heavy to carry around. The other nice benefit is that it’s easy to use services like Skype. If your Mom or Grandma lives far away, that can be a great way to see the grandkids.

If Mom loves to watch movies, you can hook up her cool new device to a sweet TV, like the Samsung UN50EH600 50 inch LED HDTV. She’ll feel like she’s in the movie theater. Lucky for you, we’re giving one away this month. The contest is brought to you by QuoteMeaPrice.com, the best company for selling a structured settlement and runs until May 31st. Anyone can enter, but only $50 is available for shipping costs. Good luck!

a Rafflecopter giveaway

Mom would love this!

Image: Freedigitalphotos.net/Ionut

We recently received a bill for our annual post office box rental. We actually have a nice, secure mailbox at our house with a lock and key. All of our important mail comes there. We set up that post office box ten years ago when we were living in a temporary rental while building our house. The only thing that comes to the PO box is junk mail, and for some strange reason, a copy of Ebony magazine every month. Why on earth do we still have this PO box? It’s because of habit. Are there things you do out of habit that waste money?

Are You On Autopilot?

It’s very convenient to set up automatic payments. It actually saves money because you don’t have to worry about late fees or interest if you forget to pay a bill. However, there might be some things that you need to review and decide you’re getting your money’s worth before auto allowing that payment.

Subscriptions-We subscribe to two publications, Money and a mountain biking magazine my husband enjoys (never paid a penny for Ebony). Between the two, they cost $20 per year, which I think is worth it. However, some people (my parents) have been on subscriptions to a newspaper and magazine for decades. Weekly magazines and daily newspapers can cost hundreds of dollars a year. If you have a stack of unread magazines from 12 months ago, it might be time to cancel the subscription. You can find most information online or at the library anyway.

Car and Homeowner’s Insurance- Every year,  I’ve shopped my policies only to find the cost of homeowner’s going up every time, even though we’ve never filed a claim. Last year I finally went with a more expensive car insurance company that offered an umbrella policy, which also gave better rates on the homeowner’s policy. It was kind of a wash, higher auto but lower homeowner’s plus the extra liability coverage. Recently, I got a flyer in the mail from Geico and thought, why not? I’ve seen the little lizard on the commercials, but never called for a quote.  

Geico is owned by Berkshire Hathaway and gives a discount if you hold stock in that company, which we do. They also give discounts to teachers and about a million other organizations. They offer umbrella policies, and are just getting into the homeowner’s market. I was pleasantly surprised to find that they could do all of my policies, plus save me almost $700 a year!  I was a bit nervous to go with a company new to the homeowner’s market, but as of now, they contract those out. The actual policy is with Traveler’s, a company I’ve used for years at work. If you are renewing automatically without looking around for a better deal, you could be doing yourself a disservice.

 Free 30 Day Trials- Have you ever signed up for credit monitoring, Netflix, or other online services free for 30 days?  They make it easy to sign up, but like breaking into Fort Knox to cancel. We got stuck with a membership to a site for legal templates that I used for some work contracts. It took a couple of billing cycles before we finally got it cancelled. If there is a small monthly fee, it may not seem worth your time to cancel, but if you aren’t using the service, you might as well flush that $5/month down the toilet.

 Memberships-Are you on a monthly installment plan for a gym or social activity? Maybe season tickets for the minor league baseball team seemed like a great idea at the time? I’m all about saving money if you get a discount for paying for a year in advance, but if you aren’t using whatever you signed up for, then cancel it. It might cost more per activity, but if you only go to the gym twice a month, a punch card might be a better idea.

I bet many of us have been guilty of wasting money out of habit. Just because you’ve always done something doesn’t mean it’s the best way. Going back to the post office box, we actually decided to keep it. My husband is always a bit paranoid about people knowing where we live, and he likes using the PO Box for the return address on Ebay sales. I guess if some disgruntled buyer of my daughter’s old shoes wants to do us some harm, at least he or she won’t have our physical address. It’s really not worth the argument, and I still  get my free copy of Ebony!

What things have you put on autopilot and forgotten? Do you continue to buy things you don’t use because you’ve always done it?

If you do use this link to get a quote from Geico, I receive a small commission. This post was written before I knew I could do that, so my opinion stands, regardless. Geico saved me lots of money, and if you’re paying too much, give them a try.