moneybucks coffee

Netflix - Free Month

noreply@blogger.com (Jenna Coffee) — Sat, 20 Sep 2008 00:36:00 +0000

I have a few codes for a free month of Netflix (new members), which gives you an extra 2 weeks over their normal deal. These expire October 31st. First come, first serve...

www.netflix.com/tellafriend

M358005090045
M388065090785
M348035090065
M368025090165

2008

noreply@blogger.com (Jenna Coffee) — Wed, 16 Jan 2008 03:56:00 +0000

As it is now mid-January of the new year, I think it is fitting to reflect on the goals I made for 2007.

1. Give $200 per month to charity or non-profits. Accomplished. I now look forward to this every month.
2. Move to an apartment where either I or my husband can bicycle to work in order to save on transportation costs. Semi-accomplished. Moved to an apartment where I can walk to work, but usually didn't chose to do so. However, saved on transportation costs because the commute was much shorter.
3. Guard against lifestyle inflation in the case that I and/or Andrew receive a raise this year. FAILED. Both Andrew and I received raises in 2007, yet spending also increased beginning around mid-year. I began to spend more than double the former amount on food when I switched to shopping at Whole Foods. We also spent more on entertainment, especially movies and travel. We shopped and splurged more. I attribute the increased spending levels to my break with moneybucks. When I was writing about personal finance weekly and accountable to an audience, it was much easier to keep spending in check.
4. After a year with my current employer (August), request an annual performance review and a raise. Not necessary as I was given a 15% raise before I reached the one year mark.
5. Observe a no-spending day at least once a week. I quickly realized that this was somewhat a pointless goal and abandoned it. I usually observe several no spending days weekly anyway, and it matters what you spend not what day you spend it.
6. Increase our net worth to $50k dollars, not including material assets such as vehicles. Accomplished.
7. Max out my Roth IRA for the year by contributing $4k. Accomplished.
8. Continue contributing enough to Andrew's 401k to receive the full employer's match. Accomplished.
9. Determine a plan and timetable for becoming a homeowner. Failed. We are just as undecided as ever.
10. Adjust our withholding so we don't overpay or underpay the IRS. I believe I was successful at this. I will know more in a few weeks after I do my 2007 taxes.

And as to where I am setting my aim for 2008:

Remain employed
Function as a 1 car household for at least another 4 months
Give $250/month to charity or non-profits
Obtain a net worth of $145k
Max out contributions to both Roth IRAs
Remember that the majority of the goods and services I purchase are luxuries, not necessities. Similarly, try not to feel entitled to a certain lifestyle.

If you haven't yet made any goals for 2008 yet, I would encourage you to at least think about a road-map for the coming year. I hope that you can find a way to make you life a little better, whether related to personal finance or not. There's still 50 weeks of blank slate left. I wish you a prosperous and happy 2008.

"A goal is a dream that has an ending. " -Duke Ellington

Tips for Turbulent Times

noreply@blogger.com (Jenna Coffee) — Thu, 15 Nov 2007 20:08:00 +0000

Currently, there are multiple threats to the US economy. (The dollar is losing value. The stock market is extremely volatile. Homes are losing value. People are losing their homes to foreclosure. It has become harder to obtain a mortgage. It has become harder to refinance. There are liquidity problems in the financial markets. The price of oil is at a record high. Inflation is a problem. The national debt is $9.1 trillion. The federal deficit is $163 billion. The Fed is lowering interest rates in order to keep the US out of a recession. ) In short, there has never been a better time or a better incentive to get your financial house in order.

Here are some preparation ideas to help weather an economic storm:

Start living within your means. If you can, live significantly below your means. As inflation and higher prices of gas increasingly eat away at your purchasing power, spending less than you earn is more important than ever.
Build an emergency fund. If you were to lose your job, do you have a monetary safety net? I recommend at least 3 months of living expenses saved, but even having $500 saved would help you cover many emergencies such as a car repair. The amount to save depends largely on your life situation and your risk tolerance. Dual wage earners with no dependents may be okay with a small emergency fund while a single wage owner with a family and mortgage may want an 8-12 month emergency fund.
Mind your adjustable rate loans, including credit cards. Even if the federal interest rates are low right now, rising inflation could push those rates upward. Also, as countries are less willing to finance our debt, borrowing may become more expensive. If you are in an adjustable rate mortgage, consider refinancing into a fixed loan if you can. The less adjustable rate exposure you have, the more you are insulated from rising borrowing costs.
Don't mind your fixed rate loans (as much). If you have a low, fixed rate loan such as a mortgage, it is not imperative to pay it off. As inflation erodes the value of the dollar, each payment made on a fixed rate loan effectively becomes less. Having a low, fixed rate mortgage on an appropriately valued home gives you excellent inflation protection. However, if you are worried about losing your job, it may be beneficial to have as little debt exposure as possible of any type.
Diversify your investments. In addition to diversifing your US holdings by sector and by size, consider the following ideas: Invest internationally in both developed markets and emerging. Invest in commodities such as oil and precious metals. Invest in foreign currencies. Short the market. Keep some of your positions in cash in case of a broad-based market correction.
Make yourself more valuable to your employer. Perform your job well, tackle high profile projects, increase your education. If you have an at-risk job such as one in the housing industry, keep your personal network strong and keep a mindful eye on your local job market.
Become as self-sufficient as possible. The less you are dependent on the economy, the less its problems will affect you.
Stay alert to the economy's developments. This is perhaps the most important. We are not in a recession. The economy is still growing, despite its problems. However, there are increasing threats to the economy, and you will best be able to deal with their respective challenges if you pay attention and react before the majority.

Further reading at the Washington Post and Seeking Alpha.

"Right now people are saying 'Let's wait and see what happens. We like our big cars." -Carol Dahl, oil economist and professor at the Colorado School of Mines.

Abraham Lincoln

noreply@blogger.com (Jenna Coffee) — Thu, 08 Nov 2007 06:18:00 +0000

The Dollar Decline

noreply@blogger.com (Jenna Coffee) — Wed, 07 Nov 2007 03:52:00 +0000

There is breaking news on the front of the declining dollar. There are speculations that China, who is the second largest holder of US Treasuries and Mortgage-Backed Securites, is thinking of diversifying out of the dollar and into more stable currencies. "The currency slumped after Cheng Siwei, vice chairman of China's National People's Congress, told a conference in Beijing the country should improve the structure of its $1.43 trillion of foreign reserves by favoring stronger currencies."

The dollar has repeatedly been hitting record lows during recent months against currencies such as the Euro, the British Pound, and even the Canadian Dollar. The dollar is at a 26-year low against the Pound, a 23-year low against the Australian Dollar, an all-time low against the Euro, and a 57 year low against the Canadian Dollar.

The negative implications of the declining dollar are many.

It becomes more expensive to travel outside the country or relocate outside the US.
The less other people and other countries are willing to accept the dollar for payment, the less your money is worth. (World's richest model refuses payment in dollars.)
Goods imported from other countries become more expensive.
The price of oil, gold, and other commodities becomes more expensive.
Because of the increasing costs of imports and the decreasing credibility of the dollar, the US risks greater inflation rates.
America becomes a fire-sale for outsiders. More foreign investors will buy US companies, US infrastructure, and US real estate -- transferring American ownership abroad.
If other countries lose faith in our currency and stop financing our debt (producing more liquidity problems), it will ultimately make it more expensive for Americans to borrow money.
Increased borrowing costs increase the likelihood of a recession for a nation as in debt as America.
As confidence in the dollar wanes, it begins to be replaced as the world's dominant reserve currency. This contributes to a weaker US on the global stage.
The value of a country's currency is ultimately a reflection on the health of a country's economy. Some say that a prolonged currency decline is symptomatic of a country's decline.

There are also benefits to a cheaper dollar.

American companies that sell products overseas will benefit from higher levels of exports as foreigners flock to purchase cheap American goods.
The combination of increased exports and lower imports will improve the US trade deficit.
Tourism-related industries will benefit as more people vacation in the US due to affordable (to them) lodging, shopping, and dining.
The threat of global outsourcing diminishes as labor in the US becomes cheaper relative to other countries (whose currencies are appreciating against the dollar).

Despite the possible benefits to a declining dollar, I believe the risks far outweigh the rewards.

"The Federal Reserve might lose control of interest rates if foreign buyers of government bonds stopped buying." -Jeffrey E. Garten, YaleGlobal

"Indeed, a global superpower with a weakening currency is an oxymoron." -Jeffrey E. Garten, YaleGlobal

Further Reading:
Washington Post: Dollar's Dive Triggers Concern
Telegraph UK: China Threatens 'Nuclear Option' of Dollar Sales
The Decision Strategist: How the Declining Dollar Affects You and the World

Euros to 1 USD (invert,data)



120 days	latest (Oct 10) 0.706364	lowest (Oct 1) 0.70279	highest (Jun 13) 0.752162

Canadian Dollars to 1 USD (invert,data)



120 days	latest (Nov 6) 0.9243	lowest (Nov 6) 0.9243	highest (May 24) 1.0841

Final Net Worth Update: May to November

noreply@blogger.com (Jenna Coffee) — Sun, 04 Nov 2007 13:12:00 +0000

(click to enlarge)

This will be my last public net worth update. My goals of taming Andrew's student loan debt, saving enough money for a house down payment, and having a good start toward retirement savings have all been accomplished. We celebrated the passing of 100k in assets a few months ago, and our total net worth has increased well beyond my 2007 goals. Although we have been saving less in recent months, increased investment gains and compounding interest have filled the gap.

You may notice that I have a large portion of our assets outside the market in online savings banks and CDs. We haven't made up our minds if we are ready to purchase a house, but I want to have money available if we so decide at the end of our lease. However, in January I will begin moving an additional $10,000 into the market as I max out our Roth IRAs for 2008.

"The great thing in the world is not so much where we stand, as in what direction we are moving." -Oliver Wendell Holmes

Fall Back

noreply@blogger.com (Jenna Coffee) — Sun, 04 Nov 2007 11:28:00 +0000

Many things have transpired since I shelved this blog back in the Spring.

I haven't been writing, but I have been unendingly reading and researching all the turmoil that has been hammering our housing market, our stock market, our financial institutions, and our currency. My outlook and strategy on personal finance has evolved from being more or less mainstream into something decidedly outside the norm. Thus you may find my tone has changed, just as I have changed as a blogger.

Additionally, I have decided to nix most of my ads, except the eBates. This blog is more about education and expression than earning income. Plus the ads clutter my page...

During my break from moneybucks, I have found myself not tracking my own money so closely. It is quite often far from my mind, and as a result, I have been spending more freely and with less guilt. My break from writing in one sense was a welcome return to normalcy. If one writes about money all the time, it's inevitable that that subject will become too significant and too present in one's stream of consciousness. Thus, this blog will never be an everyday thing enduring month after month year after year. I will shelve it once again, maybe next time for good. But for now, I have more to say...

"The birds are molting. If only man could molt also - his mind once a year its errors, his heart once a year its useless passions." -James Allen

temporarily unavailable

noreply@blogger.com (Jenna Coffee) — Wed, 18 Apr 2007 02:53:00 +0000

Moneybucks will be closing for the spring and summer, and will re-open in the fall. Consider it summer break from finance class.

Thank you to everyone who has faithfully followed moneybucks for the past 6 months. I've really enjoyed writing it, and I hope it's been insightful, empowering, and encouraging to all my readers.

If you wish to be alerted via email when this blog is back up, click here and choose 'get moneybucks delivered by email'. In the meantime, check out my archives as well as my favorite three (more prolific) bloggers:

Cheers, Jenna

Can Money Buy Happiness?

noreply@blogger.com (Jenna Coffee) — Thu, 12 Apr 2007 04:17:00 +0000

The answer is yes and no, according to recent studies.

For those living in poverty, additional money yields higher levels of reported happiness. However, once escaping poverty, additional money does not increase levels of reported happiness.

Those are the averages. How can you be the exception? If you are going to use your money in pursuit of greater happiness, studies suggest using excess money to buy experiences rather than things. Accordingly, here are some examples on what and what not to buy, if you are using your money as a stepping stone to happiness.

Experience expenditures (to buy):

night on the town
new pet
lunch with a friend
vacation
musical instrument
concert or sporting event ticket
spa appointment
dance lessons or other classes
throwing a party
hosting a reunion
giving to charity

Stuff expenditures (not to buy):

new shoes
upgraded furniture
newest cellphone/pda
better car
bigger tv
new kitchen gadget
additional piece of jewelry
souvenirs

Keep in mind that the above lists are not absolutes. If you buy a musical instrument and never play it, that would constitute a thing rather than an experience. If you purchase a large flat screen tv in order to host parties every weekend, that might constitute an experience.

The point is, more stuff accumulating in your closets and in your storage unit is not going to make you any happier. Instead, focus on expenditures that help you make memories. As a corollary, you can save more money for experiences by not buying useless stuff -- all without decreasing your quality of life.

Read more in depth about the happiness/money research here, here, and here.

"The hippies are having their quiet revenge." -Andrew Oswald, economist

Traveling on the Cheap: A Case Study

noreply@blogger.com (Jenna Coffee) — Wed, 11 Apr 2007 12:32:00 +0000

When most people are on vacation, their day-to-day restraint and good sense regarding spending disappears. It's as if splurging on vacation is perfectly acceptable, no matter the cost.

This may be fine if you only want to take one vacation per year. However, if you can cut back on the lavishness of your trip, the more trips you can have. In order to vacation often without breaking the bank, it is important to control spending both in the planning stages of the vacation and during the vacation.

Take for example, my upcoming trip back to my Alma mater. By making small tweaks to my plans, I have trimmed 40% of the trip's cost.

Using the car that has the highest gas mileage and has the lowest octane requirements saves $15.66 (1474 miles, 33 mpg vs 30 mpg, 87 octane vs 89 octane)
Buying snacks to eat on the journey ahead of time at the grocery saves $15 versus eating meals en-route
Spending one night in campus guest housing ($35) and one night with family ($0) saves $110 over two nights at a budget hotel
Attending a free campus concert on Saturday night saves approximately $20 on Saturday night entertainment costs

By making smart choices even when on vacation we are saving over $160. I am estimating/budgeting the trip's cost to be $225, while it would have cost $385 without the savings measures.

You can minimize travel and vacation costs, beginning with a change of mindset. A vacation is not some alternate universe where budgeting and good financial decisions do not apply.

Try taking shopping off your itinerary or at least minimize its role in your adventures. Take the bus instead of a taxi. Look into alternatives to a hotel such as a hostel or a home-swap. Or book a room with a kitchen so that you can prepare some of your meals. See if the museum you are interested in has a free day. Also consider daytrips as a way of escaping affordably and frequently; my husband and I often take a Saturday daytrip to explore a neighboring city or state park, usually for $50 or less.

“I travel not to go anywhere, but to go. I travel for travel's sake. The great affair is to move.” -Robert Louis Stevenson

Cheaper Gasoline for the Summer?

noreply@blogger.com (Jenna Coffee) — Wed, 11 Apr 2007 01:59:00 +0000

Gasoline has been surging in recent weeks (64 cents since January), but the Energy Department announced today that the gasoline price increases should level out to a national average of $2.81 during the summer driving months. This would be $0.03 lower than the average price for a gallon of gas last summer.

The Department predicts that May will be the most expensive for drivers, although the average price of gasoline is not expected to top $3 per gallon like it has the previous two years. It is also projected that motorists will consume 1.2% more gasoline this summer than last, suggesting that $3 may be the new consumer threshold to pain at the pump.

Disclaimer: This forecast assumes that there is "no new international crisis this summer".

My personal threshold for discomfort is more like $2.50. This is why, in three weeks, I am moving apartments so that I can ride my bike to work! That, or have a shorter commute...

"Everything in life is somewhere else, and you get there in a car." -E.B. White

Free Cone Day at Ben & Jerry's - April 17th

noreply@blogger.com (Jenna Coffee) — Sun, 08 Apr 2007 20:39:00 +0000

From the Ben & Jerry's website:

On Tuesday April 17th from 12pm until 8pm participating Ben & Jerry’s scoop shops around the world will be hosting Ben & Jerry’s Annual Free Cone Day. Click here to find a participating scoop shop near you!

April 17th, coincidentally, is also tax day this year. (April 15th falls on a Sunday, April 16th is Emancipation Day.) So, mark your calendars and consider this a reward for paying the IRS on time.

Refinance the mortgage with your credit card

noreply@blogger.com (Jenna Coffee) — Sun, 08 Apr 2007 18:34:00 +0000

The cost of refinancing a mortgage can be significant, but it is usually worth the costs if you can significantly reduce your interest rate over an appreciable amount of time. But what if you only have 2 years left on the mortgage? If you refinanced, the associated costs would negate the effect of a better interest rate. Enter the credit card.

Could you pay off your mortgage in one year if your entire payment went towards principal? If so, you could 'refinance' your mortgage with a credit card. You do this by transferring your balance -- a term which applies not only to other credit cards but also to other loans such as a mortgage. All you need is a card with a high credit limit that offers a 0% interest rate on balance transfers for 12 months, preferably with low to no fees. (Check the offers on your current cards or try this Discover card or this GM card with $99 fee). At the end of 12 months, you can either pay off the balance (preferable) or transfer it to another low rate balance transfer card (if available). Some advice:

Before you transfer the mortgage, make sure the balance is paid of on the credit card. Also ensure that you will not make any additional charges on the card and that there are no automatic payments set up for that account. (This is because payments made after the balance transfer will be applied to the 0% balance, allowing finance charges to accumulate on all other purchases.)
Make payments on time every month or risk a much higher APR. I recommend setting up an automatic payment.
Mark your calendar or set up a reminder to alert you when the 0% interest rate is about to expire. Before it does, make your payment in full or transfer the balance.
Don't use this technique as a way to pay less towards your mortgage, thus prolonging the amount of time required to pay it off. Even if you only make the minimum payments each month, deposit the remaining portion in a high yield savings account to pay off the balance after 12 months.

Besides saving a lot of money on interest, you will have also reduced your risk by converting your secured loan into an unsecured one. After the mortgage is on a credit card, no one can foreclose on your house if you stop making payments because a credit card balance is not secured with any material asset.

Of course, you will no longer have mortgage interest to claim on your tax return; however, with such a low amount of principal left, there would be little interest to deduct anyway -- perhaps not even enough to make itemizing worthwhile. Also, because you will have a nearly maxed out credit card, your FICO score will suffer temporarily while the balance is high. Your score will recover as the balance is paid down.

How much could this save you? By transferring $15,000 at a 7.5% interest rate to a 0% interest rate, you would save $1,125 over the course of a year.

This trick can also be used with auto loans.

"Mortgage: a house with a guilty conscience." -Unknown

Monthly Net Worth Update: 04/02/07

noreply@blogger.com (Jenna Coffee) — Tue, 03 Apr 2007 04:14:00 +0000

(click to enlarge)

This was the month of the tax refund -- a way too large $2300 -- which boosted the bottom line significantly. Also, a five Friday month meant an extra paycheck.

All in all, this was the biggest monthly gain in net worth yet; unfortunately it is unsustainable.

Paring Down

noreply@blogger.com (Jenna Coffee) — Fri, 30 Mar 2007 04:57:00 +0000

Recently I decided to cull my personal belongings -- by fifty.

This was an effort in an on-going fight with household inflation. Every time I go shopping, every time I have a birthday, every time Christmas rolls around, our household gains more things. With so many things coming in, I similarly try to ensure things are going out.

I have several reasons for wanting to keep a check on the items I own.

-I have to house everything I own. It is very expensive to have a storage facility or extra bedrooms just to hold stuff.
-Everything I own I have to clean, insure, and maintain. This causes hassle and costs both time and money.
-Having too much stuff causes me to enjoy the things I have less.

Because of these reasons, I decided to get rid of 50 things, which I recently completed. It really wasn't a very difficult task in the ways that one might think. I didn't have a hard time locating superfluous items and I did not have a hard time parting with them. The difficult thing was all the negative emotions that were wrapped up in the things I was discarding.

The dark side of paring down:
The items that I selected for removal were often items that I wasted money on, items that were bad decisions. Many items were gifts that other people wasted their money on -- sometimes at my request. Some of the items I associated with negative events, hence their spot on the chopping block. Another unexpected source of negativity began innocently enough when I decided to list an item of particular value on craigslist. Two days later I found myself negotiating with a seemingly poor, elderly lady with a cane. Even though she was a legitimate, interested buyer, I couldn't help but feel guilty that I was selling my stuff to her instead of just giving it to her. All of this unexpected negativity really got to me until I deposited the remaining items at Goodwill.

But now I am better off for my efforts. My life is less cluttered. I am able to move to an apartment that I like better even though it has less square footage. The things that I never used now have homes. I have some extra cash to put towards an upcoming vacation. And now I may just have the power to control spending splurges by simply remembering my battle with excess stuff.

"Frugality is one of the most beautiful and joyful words in the English language, and yet one that we are culturally cut off from understanding and enjoying. The consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things." -Elise Boulding

10 Reasons You Aren't Rich

noreply@blogger.com (Jenna Coffee) — Tue, 27 Mar 2007 04:34:00 +0000

I found an excellent article today by Jeffrey Strain over at TheStreet.com, entitled 10 Reasons You Aren't Rich. These reasons emphasize that your relationship with money is more important that the salary you make. Here are the top three reasons with explanations and a recap of the remaining seven:

1. You Care What Your Neighbors Think: If you're competing against them and their material possessions, you're wasting your hard-earned money on toys to impress them instead of building your wealth.

2. You Aren't Patient: Until the era of credit cards, it was difficult to spend more than you had. That is not the case today. If you have credit card debt because you couldn't wait until you had enough money to purchase something in cash, you are making others wealthy while keeping yourself in debt.

3. You Have Bad Habits: Whether it's smoking, drinking, gambling or some other bad habit, the habit is using up a lot of money that could go toward building wealth. Most people don't realize that the cost of their bad habits extends far beyond the immediate cost. Take smoking, for example: It costs a lot more than the pack of cigarettes purchased. It also negatively affects your wealth in the form of higher insurance rates and decreased value of your home.

4. You Have No Goals
5. You Haven't Prepared
6. You Try to Make a Quick Buck
7. You Rely on Others to Take Care of Your Money
8. You Invest in Things You Don't Understand
9. You're Financially Afraid
10. You Ignore Your Finances

Opting Out

noreply@blogger.com (Jenna Coffee) — Mon, 26 Mar 2007 00:33:00 +0000

Junk mail is something nearly everyone dislikes, and with good reason. It's a hassle, it distracts us from the mail that is important, it produces unnecessary waste, the catalogs tempt us with items we don't need, and the pre-approved credit card offers raise the risk of identity theft.

Fortunately, there are several easy steps to reduce the amount of junk mail you receive. Even using one or two of these suggestions should significantly cut down on your junk mail.

1)Opt out of pre-approved credit solicitations by calling the Pre-Screening Opt-Out Hotline at 888-567-8688
2)Call the companies that send you mail. If you no longer wish to receive a catalog, for instance, just call the 1-800 number listed on the back and ask that your name be removed from their mailing list.
3)Opt out of all unsolicited sexually oriented advertising by filing USPS Form 1500, available at your local post office
4)Fill out the online form at the Direct Marketing Association's site. This request costs $1, but it will stop an estimated 75% of national mailings.
5)Whenever you donate money or order a product, specify that you do not want your name or address sold.
6)Avoid sending in warranty registration cards, which are usually not necessary for the warranty to be effective. These cards are often used for the purpose of obtaining and selling your address.

"I get mail; therefore I am." -Scott Adams (Dilbert)

What Americans Pay For - and How

noreply@blogger.com (Jenna Coffee) — Sun, 25 Mar 2007 19:20:00 +0000

I recently read an article by the Pew Research Center on 'What Americans Pay For - and How'. Although this article covered a lot of material, I am highlighting two of their most interesting findings by reprinting the following two tables.

This first table shows what bills the average American pays each month, by age. The most common bill across all age groups is Cable TV. For a population so heavily in debt, I am a little surprised that cable is the most common household expense. Apparently I am one of the few that still enjoys no monthly cable bills, compliments of a bunny ear antenna.

This next table shows credit card habits, by income bracket. Only 58% of respondents cite using a credit card each month. This is lower than I would have expected. However, of those that have a monthly credit card bill, only 41% pay off their balance in full each month, while 53% make only a payment towards their balance.

Decorate on the Cheap

noreply@blogger.com (Jenna Coffee) — Sun, 25 Mar 2007 03:28:00 +0000

Here's an imaginative article from Real Simple, "Decorate on the Cheap with Everyday Items", that gives 10 ideas for decorating using items that you ALREADY HAVE. I have pictured some of my favorite ideas below.

You can also use these ideas as inspiration for resurrecting the things you have on-hand in order to avoid a shopping trip (and a credit card charge).

-Placemats from dish towels
-Vase from a toothbrush holder
-Photo arrangement using binder clips

What to do with your money

noreply@blogger.com (Jenna Coffee) — Sun, 18 Mar 2007 23:21:00 +0000

After reigning in your spending, you finally have something extra left over each month. That's great. But do you know what to do with it?

To answer that question, I am outlining the best things to do with your money beginning with the highest priority below.

1) Obtain car liability insurance and health insurance.

2) Build an emergency fund of $1000. Do not touch this money unless it is an emergency. Gifts, seasonal clothes shopping and vacations are never emergencies. Keep it somewhere easily accessible, such as in a savings account at your bank.

3) Sign up and contribute to your company's retirement plan if they offer a match. Contribute as much as you can up to the point where you receive the maximum match from your employer. Through matching, you are earning a return of 50%-100% of those contributions, so it's important to not leave that free money on the table. The only exception to this rule would be if you planned to change jobs before you become vested.

4) Increase your emergency fund to cover 2 months worth of living expenses. Keep the portion of your emergency fund over $1000 in an online savings account in order to earn a better interest rate; I recommend Emigrant Direct. Keep the $1000 in a savings account in your normal bank where you have your checking account.

5) Pay off high-interest debt such as credit card balances. I would consider high-interest debt anything over 8%.

6) Obtain disability insurance. Obtain life insurance if you have children.

7) Open a Roth IRA, with a goal of fully funding it each year ($4000).

8) Pay down other, lower-interest debt.

9) Build your emergency fund to cover 4 months worth of living expenses.

10) There are many things that could go in this space. Some ideas: increase your contributions to your retirement plan at work. Save for a down payment. Pay off your mortgage. Increase your emergency fund to 6 months worth of living expenses. Save for your child's education. Beef up your insurance coverage. Save the start-up capital necessary to create your own small business.

Two excellent sources of additional information:
My Money Blog's Rough Guide To Money (covers budgeting and investing for beginners)
My Money Blog's You Have Some Money. Where Do You Put It? (an alternative take on my "What to do with your money" list)

The Starbucks Short

noreply@blogger.com (Jenna Coffee) — Sun, 18 Mar 2007 19:39:00 +0000

I love going to Starbucks. For me, it's the place. I love to go and think and plan and discuss and read. The coffee for me is like popcorn to a movie -- it's not the main event. However, unlike at a movie theater where I rarely buy popcorn, I always buy a drink at Starbucks. Buying a drink at Starbucks is not cheap, but there is a way to downsize the cost.

Order the unadvertised short drink, which is one step down from the smallest advertised size, the tall. (There is actually a whole range of drink options that all baristas know but are not published on the menu -- this is one of those options.) A short drink does not have as much profit built in for Starbucks, but it's great for the consumer's wallet and waistline. A short is only available for hot drinks.

The difficulty is that if some of your products are cheap, you may lose money from customers who would willingly have paid more. So, businesses try to discourage their more lavish customers from trading down by making their cheap products look or sound unattractive, or, in the case of Starbucks, making the cheap product invisible. -Tim Harford.

Read more about the mystery of the short here. For an insider's guide to the Starbucks menu, go here.

Free QuickBooks Simple Start Edition

noreply@blogger.com (Jenna Coffee) — Thu, 15 Mar 2007 18:13:00 +0000

If you've been wanting to start a small business or already have one, you may want to check out this free Simple Start version of QuickBooks accounting software. It is not a trial version; it will never expire. Here's a summary of the features it offers compared with the $99.95 Simple Start QuickBooks version.

With this free Simple Start version, you can create invoices, track payments, receipts, and deposits, write checks, issue refunds, create reports, etc. If you ever need to upgrade to a more deluxe edition of QuickBooks, all your data can be exported into the other editions. I am very surprised that QuickBooks is offering this for free, and I think it would be a valuable tool for any starter business.

"Do what you love. When you love your work, you become the best worker in the world." -Uri Geller

Austin Housing Market

noreply@blogger.com (Jenna Coffee) — Thu, 15 Mar 2007 05:43:00 +0000

Goal #9 on my 2007 Money Resolutions List is: Determine a plan and timetable for becoming a homeowner.

Currently my husband and I are apartment renters and have just signed a lease that will run from May 2007 to April 2008. One of the reasons we are still renting is that Austin is currently in the midst of a strong seller's market. Unfortunately, the Austin real estate market shows no signs of slowing down as evidenced by the following recap on the February real estate numbers:

New listings were down by 16.32%, Solds increased by 16.28%, and "New Listings" average list price is up 15.65% to 298,480. Sold average sales prices increased 6.45% to $232,259 compared to $218,188 in 2006. Commentary: Sellers are enjoying the times and getting their prices and terms. Multiple offers are very common on the the best listings.

Every month seems to be the same story. Austin job growth is high, the population keeps growing, real estate investors are fleeing other declining markets and buying heavily here -- all contributing to the rip-roaring Austin real estate market.

While the Austin economy may continue to boom, there is one new development that may help pull Austin home prices down. This development is the national decline of the subprime lending market. Here is an excerpt from a recent article by Bill Fleckenstein:

Essentially, the subprime mortgage industry -- which lends to consumers with credit issues -- is gone. Alt A lenders, those one rung up the ladder creditwise, will be next. Together, they comprise approximately 40% of the market.
This credit collapse is an unequivocally important event. Because, as I've been writing, the ability of anybody with a pulse to get a loan for any amount is what drove the real estate market, and the real estate market is what drove the economy. Sometime in the next three to six months, the real-estate market will basically just freeze up. Of course, inventories are going to explode and prices will eventually drop rather dramatically as a vicious cycle feeds on itself.

Will this decline in subprime lending eventually take a toll on Austin real estate? If so, will it be enough to turn Austin into a buyer's market?

I will be intently watching the developing events in subprime lending and its effect on the national housing market in an attempt to answer the above questions.

"The only surprise about the downturn in mortgage financing and housing is that anyone is surprised." -Randall W. Forsyth

2nd Annual Starbucks Coffee Break

noreply@blogger.com (Jenna Coffee) — Thu, 08 Mar 2007 01:03:00 +0000

On the Ides of March (March 15th/next Thursday), you can pick up a free Tall cup of coffee at Starbucks between the hours of 10AM and noon. This applies to all company-operated and licensed Starbucks stores in the U.S. and Canada.

Monthly Net Worth Update: 3/1/07

noreply@blogger.com (Jenna Coffee) — Thu, 01 Mar 2007 06:01:00 +0000

During the month of February, our net worth increased by $3,885.09. It was a good month despite Tuesday's stock decline that took about $1000 off our gains. (The increases shown in stock accounts were solely due to contributions.)

It was also a month for reaching milestones. Our net worth passed the $25,000 mark. Also, Andrew's credit score broke 700 for the first time in years; he now has a 702, up from 697 last month.