Minting Pennies - Personal Finance, Investing, and Microfinance

Top Excuses Debunked

Karl — Thu, 11 Feb 2010 20:30:30 +0000

Nobody wants to be called a loser. Much less a BIG loser. But that is exactly what excuses make us. They are roadblocks we ourselves put in front of us that prevent us from reaching goals that are otherwise attainable. Excuses for not achieving something is different from reasons for not achieving something in that excuses can be overcome. That is the distinction between the two.

So let’s look back and see how to overcome some very popular excuses that prevent us from achieving financial fitness:

Excuse: I have no time to keep track of my money!

DEBUNKED: This is the lamest excuse out of all of them. Sites like Mint, Wesabe, and Geezeo all can help you track your money and how you are spending it. They will categorize your purchases and even compare your “costs of living” with the general public in your respective cities. Personally, I use Mint.com because it also allows me to keep track of my investments so that I have everything in one place. Can’t get any more convenient than that.

Excuse: I cannot afford a professional financial planner nor can I afford classes to learn.

DEBUNKED: I do not claim to be all knowing but most of the stuff we write about here on this blog were gleaned from the web. We taught ourselves what we needed to know in order to change our lives and help change the lives of others around us. And the cool thing about it? The education is totally free. It is about leveraging the knowledge and experience of others to make yourself more financially competent. If you really want to learn, you can find what you want to know online. No fees. No payments. Just straight knowledge.

Excuse: There are way too many temptations around me, calling me to spend my money.

DEBUNKED: I have a neat trick that quickly neutralizes any impulse buys. I think about how much I had to work to be able to afford a particular item and weigh whether or not it is worth the time and effort I put in at work. Most of the time, it is not even close. If it gets past that first test, then I ask myself if the purchase will in anyway help me achieve my goals especially when it comes to starting my own microfinance institution. That usually is the end of the debate between the devil and angel on my shoulders.

Excuse: I do not have the energy to be so diligent about my finances.

DEBUNKED: One word: Automatic. Make everything automatic. Have your computer do all the heavy lifting. Get direct deposit. Make the computer pay your bills online automatically every month. Make the computer move money from your checking account to your savings account (or Roth IRA) automatically every month. Automatic. Automatic. Automatic. No energy needed at all.

Excuse: This is probably as good a paycheck as I will get. Especially with the job market the way it is right now.

DEBUNKED: There is no such thing as a plateau. We are only using a tiny portion of our brains. There will always be room for improvement and growth. You can always find ways to make more money and spend less of it. All it takes is motivation and resolve.

Excuse: I have good intentions to get all my financial houses in order but my routines and bad habits are just too much a part of who I am and what I do.

DEBUNKED: This is obviously a problem of behavior. Psychologists agree that the majority influence on a person’s behavior comes from a person’s environment. A good way to change behavior is to change the environment around you. If you want to stop buying expensive coffee so that you can participate in the Kiva Gift Guide, then do not put yourself in a coffee shop. If you keep eating out with friends, limit your interactions with those friends and your eating out bill should also go down. Before you know it, you will have an entirely new money-friendly routine.

Excuse: Budgeting and counting your money are some of the most boring things you can possibly do with your time.

DEBUNKED: It is hard to argue with this excuse. But it is necessary to get out of this mindset to reach financial goals. Boredom is a big factor when it comes to budgeting and keeping an eye out on your money health. The way I get over the boredom is to keep reminding myself what I am striving for. By having the goal always in the front of my mind, it allows me to keep going and going and going… Heck, there are even financial games that are actually pretty fun to play that can add some excitement and give you the motivation you need to stay on track.

Excuse: But it is so easy to just slack off! There are so many other things I could be doing.

DEBUNKED: OK, everyone knows that all work and no play makes for a very dull existence. And fun activities are just better when it comes to usage of time. And I support that. I have my hobbies. I go hang out with friends. I go outdoors. I do not spend every minute counting pennies. But I also know to do these things in moderation. Actually, I only do these fun activities when I know that I have taken care of all the things I HAVE to take care of. These activities are actually my rewards. It’s like eating Thai food after a good workout. With mini rewards to break up the monotony, financial goals become easier to handle and you will be less likely to just give up from sheer exhaustion.

So we have gone through the most common excuses and how to overcome them. Are there less common excuses out there that are your personal roadblocks? Please share in this blog and let’s see if someone’s two cents might become the answer you are looking for.

Top 8 Reasons For Not Being Fit…Financially

Karl — Thu, 04 Feb 2010 20:30:58 +0000

January is over. For many, that means that the lives of their resolutions are over too. Especially resolutions about weight and fitness goals. I see less and less people walking/jogging in the streets in our neighborhood nowadays. Maybe they have already reached their goals but in all likelihood, their excuses got the better of them.

I have never seen the show before but apparently the Biggest Loser has a personal trainer who debunked the top excuses people have for not being as fit as they should be. The excuses she wrote about are very similar to what I hear from people whenever I tell them to shape up… with their money. So here they are. The excuses I often hear will be the ones italicized in parentheses.

Excuse #1: “I have zero time to exercise!” (I have no time to keep track of my money!)

Excuse #2: “I can’t afford a gym or fresh produce.” (I cannot afford a professional financial planner nor can I afford classes to learn.)

Excuse #3: “The cookies in my cabinet are calling me!” (There are way too many temptations around me calling me to spend my money.)

Excuse #4: “I can’t get up early to work out, and I’m tired at night.” (I do not have the energy to be so diligent about my finances.)

Excuse #5: “I’ve hit a plateau; I give up.” (This is probably as good a paycheck as I will get. Especially with the job market the way it is right now.)

Excuse #6: “I start off Monday with the best intentions, and then life takes over and I flake on my workouts.” (I have good intentions to get all my financial houses in order but my routines and bad habits are just too much a part of who I am and what I do.)

Excuse #7: “I get so bored counting all those weight reps or running.” (Budgeting and counting your money are some of the most boring things you can possibly do with your time.)

Excuse #8: “But the couch is so comfy!” (But it is so easy to just slack off! There are so many other things I could be doing.)

Do any of these money excuses sound vaguely familiar? Have you heard your families and friends make them? Have you made some of these excuses yourself? Next, we will talk about some ways to beat the excuses and stay the course. After all, we really do not want to become a BIG loser. Stay tuned.

Can’t Get No (Job) Satisfaction

Karl — Wed, 06 Jan 2010 22:10:19 +0000

After reading our last post, some people out there might be in the same boat as some of the people that participated in this study. I think the growing dissatisfaction amongst workers towards their jobs is not an unusual finding.

In fact, I think they might have interviewed or surveyed some of my old coworkers and some of them were ready to go postal. Service suffered of course but when people don’t care…

In every single job I have held, I was surrounded by people who disliked or even hated their jobs. Everywhere I turned, I heard people harping, complaining and I saw the faces of workers who were not very enthusiastic about their jobs. I even saw the very same face in my own mirror.

The cure

One of the main complaints recorded in the study is that workers feel that they are working jobs that are uninspiring or just flat-out beneath them. Since there is no challenge in being a lowly office clerk, these workers will often get bored and the sour notes will increase with every passing day. Everyone wants to be a CEO or be in some sort of position that will challenge and stimulate. But how do we get there?

You too

It is possible to start your own enterprise for very little money. For the record, my two cents is that blogging can be a good source of supplemental income if it is done correctly. It might not be enough to keep up with the Joneses or The Smiths but it will definitely be a lot more challenging than a clerical gig.

The killers

Well, one killer actually – thinking too big. Dreams of owning an empire is a state of mind that can sometimes be so grand that it actually derails an idea (e.g., like leaving a lousy job) before it can even debut into the real world. Maybe the right key is to start small and go in incremental notes or decibels and build to the crescendo. Keep the crescendo in mind but also work towards it in a methodical manner just as one would work towards saving.

Killing me softly

This slow build up towards a goal (whether it’s getting a new job or a musical climax) is a method employed by Sigur Ros in many of their tracks and I think it is successful because they take the time to actually execute until they get to where ever it is they want to go with the music.

The same strategy can be used in becoming a CEO from a lowly clerk. The right steps like going back to school and getting more skill sets can definitely help in turning an idea into reality. Administer lots of TLC to the goal but make sure to actually act on the steps needed to reach that goal. Otherwise, you’ll be hearing the fat lady sing because it will be game over before you even know it and you will be ushered back into your day to day boringness.

How Much Does Your Job Cost?

Karl — Tue, 05 Jan 2010 21:24:13 +0000

The start of any new year always brings about reflections and resolutions. Gym memberships go up all over the country and people start really examining details in their lives. About 76% will look at their jobs and try to assess how they really feel about their current status at work.

There are many in this 76 percent who, despite the good fortune of still having a job, are nevertheless still unhappy with the their boss, coworkers, clients, customers. They come to this conclusion because they tally up all the costs their job is really costing them.

How much for a heart?

One common complaint that stems from work is stress. In particular, the amount of stress generated at work is usually so much that it carries to places outside of work like home life. With stress hovering over workers in the job and following them home also, it is easy to see how hypertension is so high up on the list of things that can kill you. And fighting stress is not cheap either. Destressors like yoga classes can easily exceed 16 dollars a session, especially here in southern California.

How much for the heart of your boss?

There are also those who are working at jobs where they get zero benefits outside of a regular paycheck. I consider this a cost because there are a lot of jobs out there that do offer benefits ranging from medical coverage, sick leave to retirement plans. Even sales representatives at a small company like REI are given excellent benefits. If your job is not giving you more than a paycheck, then it is definitely costing you.

How much for a new car?

A majority of people have some sort of commute to get to work every morning. In a city like Los Angeles, driving is almost inevitable. ALMOST.

I know not less than 5 people who work from home. Their commute to work is measured in steps. With all this technology allowing us to connect easier and more efficiently, people are finding ways to be employed while in their pajamas. They do not have gas bills like the rest of us. Their cars (if they own any) are serviced less and are therefore cheaper to own on year to year basis.

How much for your time?

In the end, this might be the most expensive part of your job. If you work a job that is not your dream gig and it is taking up a lot of your time, then you might be missing out on some opportunities out there. Opportunities that might “cost” less.

(photo: laverrue)

Enough Is Enough

Karl — Fri, 01 Jan 2010 22:44:53 +0000

Even if you are only a casual sports fan, you will be familiar with a very much anticipated fight/boxing match between Floyd Mayweather Jr. and Manny Pacquiao.

The press storm surrounding this fight is insane but it is much deserved. Both are unique fighters and both have distinct styles that they bring to the fray.

Now, mere mortals have their own battles, too. Mine is against the credit card companies. It is in no way as dangerous to my health but my financial well-being is another matter as I am constantly attacked by my credit card bills.

Against the ropes

For a while in the not too distant past, I was constantly taking shots from the credit card companies in the form of monthly bills. The punches seem to come from every angle, and every day of the week, I dreaded another bill coming in the mail. I was getting hit from the right, from the left, from everywhere basically. It seemed that I was on the verge of being knocked out.

Good corner men

But in between rounds I received good advice from my corner. They told me that I can and should just roll with the punches. This is a tactic that a counter puncher like Mayweather employs beautifully. When the bills kept coming, I did not stop paying them altogether. Instead, I had the credit counseling company lower my monthly payments by lowering my APR. They also combined all of the bills into one so I am no longer having to deflect all these punches every other day. This was my version of counter punching.

The big bomb

Then the credit card companies countered by raising the APR to ridiculous highs. I think this was their version of throwing a knockout punch. For most people, this kind of interest would have them down and out on the canvas for the rest of their lives.

“Float like a butterfly…”

I know others will dodge this very easily by transferring a high-interest balance onto another credit card with a lower APR. This way they do not get hit with the ridiculous rates. But is this still the best strategy out there?

Tough and wily opponent

Then, the companies countered with fees. Particularly, inactivity fees. If you still have some credit lines open, it would be best to check that no hidden changes are going on. An unknown fee coming out of no where can be as damaging as a liver shot. It can knock you down or out if it messes up your monthly budget. If you have a variable APR, keep a keen eye on that too since they can raise that up until new legislation next year finally outlaws it. It’s kind of like punching below the belt.

Fighting or boxing?

For me, I think the best way to handle it might just be to tackle credit spending head on just as Pacquiao goes after an opponent with focus intensity. Instead of countering, I will just make sure not to even give them a chance to throw punches at me. I will pay the balance in full every month and only keep the oldest line of credit. I will make sure that I am throwing so much offense at them that they won’t even have the chance to go after me.

Can you tell who is itching for a fight?

Leaving The Rat Race

Karl — Wed, 30 Dec 2009 20:51:48 +0000

Unless you are one of the fortunate few who have found that your job and your passion are the same thing, you are most likely working at a job where escape is a constant wish.

For many, that exit will only come when they are around 65 years old and ready to fully retire. For others, it might even extend further than that age threshold. It’s a sad fact but finally retiring can sometimes mean that the worker just died and could not clock in anymore.

What it takes

For some, it might mean having a million dollars in squirreled away somewhere so that they can live worry free. Surely these are enough nuts to last a lifetime, right? After all, how many people out there can really call themselves millionaires? To most people, this is just some mythical number.

More nuts

Looking deeper though, I get the feeling that one million dollars will not be enough for many people. It is very possible that that nest egg will vanish completely before the end.

The average cost of nursing homes in the Los Angeles area is about 173 dollars a day. If we divide the million dollars by that number, then the “millionaire” will only be able to afford long term care for about 16 years. After that, they better hope that their kids or grandkids love them.

Wealth is not measured in nuts

Kiyosaki, the author of Rich Dad, Poor Dad has suggested that the true measure of wealth is the unit of days. The number of days going forward wherein one does not have to work is a more realistic measure of wealth. If you have one million dollars and your cash flow shows that your monthly expenses are in excess of 8300 dollars, then you will most likely be broke in ten years. Then you have to generate income again and join the rat race all over.

Other rodents

There are also other things that can gnaw at your precious hoard. The biggest culprit is inflation. This is a very real pest when it comes to trying to leave the rat race forever. If you think that you have hoarded enough, you must first calculate exactly what quality of life you are expecting in the future ten or twenty years from now. If you rely on 8300 dollars up until the last month before your death, that last month can quite possible the most miserable. The money will simply not get as much as it will today.

Keep Hoarding?

That is one way to prepare but that just means a longer stay in the rat race. For me, I prefer to adjust my cash flow so that money coming out will be a lot less than money coming in. If I start this practice today then maybe I can manage to live comfortably even if I do not use up a large amount of nuts a month. Coincidentally, since I will not require that much to survive in the future, my stay in the rat race will not be as long. By tweaking my lifestyle, I might actually be able to become wealthy.

Now I just have to find out what I need to cut out of the budget.

Seems like it is time for resolutions again. Good luck everyone.

Kiva Winter Price Guide

Karl — Fri, 25 Dec 2009 01:19:36 +0000

The following is a list of ways that might make it possible to be able to give a hand up towards other people without completely taking money away from yourself. These money saving tips can help you become part of something grand (alleviation of poverty) with very little cost and effort. If you are able to afford any of these “prices” then please help us fight the good fight.

Gift for yourself

During the holidays, in the midst of shopping for everyone else’s gift, I often get the urge to get something for me too. I think I am not the only one who feels this. But instead of buying something right away, we can choose to lend $25 to an entrepreneur. Once we get the money back, then we can treat it like a regular gift card although my feelings about them are pretty clear.

Data plans

Most carriers allow you to take off or add a data plan to your service package. If I go without internet on my phone for one month, I will suddenly have $30 to lend. You can do the same.

No soda

I like to drink soda. I usually go through about sixteen bottles every month. If I were to give that up at one sixty five a bottle, I will have $26.40 to put towards helping someone out.

No coffee

I do not drink coffee but I hear lattes are expensive. Ten and a half lattes at Starbucks is all you would have to give up in order to save enough ($25) to loan to someone at Kiva. When you get the loan money back, then you can double your caffeine intake to make up.

DirecTV

This service costs $30 a month. If you watch Hulu instead for the month, then that is one extra loan that can go out there in the world.

Gas downgrade

Switching from 91 grade to 87 grade gas for three months will net a savings of $25.20. I used a fifteen gallon tank a week for my calculations and a fourteen cent difference between the two grades which was common in my zip code.

Netflix

Downgrade Netflix has multiple levels of subscription. I found that switching from the premium to the lowest, will save eight dollars a month. In three months, these savings will be enough for a loan.

Zankou Chicken– eating out

Everyone likes to eat out but a meal between two people usually runs me about 26 dollars. For the sake of helping those less fortunate, I can postpone one meal. Then when I get my money back I can eat all the chicken I want.

TGIF

This is another place that is offering a meal for two costs only $20. One less visit to this place will be all it takes to fund a loan.

DVDs

The X-Men: Origins costs $24.99 at the Best Buy website. We can instead help originate (it’s a stretch) some hope for an entrepreneur in developing nation with a loan and when they pay the money back, then we can buy the DVD.

2 AMC tickets

A movie night for two people costs $26. Loan instead and watch real drama unfold as you get updates on how your money is making a difference. And after you get your money back, you can go watch movies to your hearts delight.

Stamps

The average person has a phone bill, one car payment, and six or seven credit card bills. If you were to use online billing instead of postage for all of these, you can save $38 a year. That money would be greatly appreciated in developing nations.

Freeze gym membership

Most gyms will let you freeze your membership without completely canceling it. Freeze for one month and that is an instant $30 you can use to fund a loan.

Avoid one overdraft

Chase Bank charges $33(!) per overdraft. That money could be doing so many other things, better things… Use tools such as Mint.com to keep track of your cash flow.

Pedicure

It was awkward to do the research and ask girls how much the average pedicure costs but most agreed that it usually falls between $25-$35. One month of regular looking nails is not too big a sacrifice, I think, to help someone get out of poverty.

One new hardback

Some time off from work might finally allow the bookworms among us to catch up on reading. But a brand new thriller from Amazon can easily cost $25. I think that money can go to microfinance and bookworms can instead read up on the story of how Kiva got started.

Stocking stuffer

While I was shopping for presents, I accidentally walked into Crate & Barrel. They had signs all over the store stating that they had stocking stuffer gift ideas starting at $25. Why not stuff a Kiva certificate in someone’s email inbox instead? Then when the loan gets repaid, the recipient can go to Crate & Barrel themselves and buy a $25 whisk. At least that’s what I think it was.

So there you have it. Last minute gift ideas? Maybe. But more importantly, these are just some examples of things we can give up just for the moment to help entrepreneurs in developing nations. They might seem small and trivial to us but it could possible mean surviving or not surviving for others. But one thing is clear: they do not need our charity to survive. They only want to be given a chance. That in itself is a great gift.

(photo: mercedesdayanara)

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Looking In The Rear View Mirror

Karl — Wed, 23 Dec 2009 19:34:58 +0000

It’s that time again. Time to look back and reflect. Was it a pretty straightforward and easy road? Or were there more road bumps than expected?

Rough patch

For many of us, this year closing has been very hard and trying. I knew about the unemployment rate reaching levels not seen since the Great Depression. To me it was just a fascinating bit of trivia, like a fact you store for games like Jeopardy! but then a friend told me that he lost his job. Then a friend told me she lost hers too. Then another friend.

Close calls

Then it started getting closer and closer to me personally. My dad who works for the state now has to worry about furloughs and the subsequent pay cuts they entail. Then cuts to educational grants threaten the progression of higher learning pursuits. And closest of them all is the drastic drop in revenue from the state of California from the accounts I handle. For many months there, my accounts were not paying us. That was a little scary.

Wrong turns

Of course, the past year has also seen me make my own financial troubles to deal with. This was the first time I really started putting significant money in the stock market and I never realized why they always say that hogs get slaughtered. That was until I started playing with triple leveraged ETFs and then becoming greedy with them, holding them longer than I really should have.

Getting lost all together

With all the places I decided to invest in including my fellow man (check out our lending team), it would have been very easy to lose track of where exactly my money is at and how it is performing. But by using Mint.com, I am very confident in my knowledge of exactly what my money is doing and what I am doing with my money. It has allowed me to really fine tune a budget that I hope I can perfect even more into the next year.

Looking ahead

Now that we are at the end of this particular stretch of road to financial independence, it is very helpful to look back and see where we made good decisions in the past year and where we hit bumps on the highway. This way we can more accurately take advantage of good opportunities or shortcuts and avoid making the same mistakes as we move forward into the coming year and onto the next stretch of road.

(photo: chelseagirlphotos)