Monthly Archives: November 2007

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Interac LogoGrant from the Corner Office Blog recently posed a question on my posting about picking up a nickel that someone had dropped — and that no one else had any interest in.

What are your thoughts on removing the penny (and nickel for that matter) from our financial circulation? There are some that argue we don’t need tangible currency at all, and can rely on bank cards entirely.

Everytime this comes up, while it’s a move in the opposite direction, it makes me think back to me time in Canada. I was already living in the States when the $1 bill was phased out in favor of the $1 coin — the loonie. Thinking back, I think that was around 1987.

Later, while I was actually back living there in the mid-90’s, they phased out the $2 bill, as well, in favor of another coin.

At the time, the idea seemed kinda neat. The coin was cool looking — two-tone!

But quickly you realized how terrible it really was. Vending machines suddenly raised their prices for the new $1 dollar (or even $2 dollar) coins. This, of course, was before you could slide paper money into vending machines.

But the biggest downside was that you ended up with heavy pockets. Let’s say you went out and broke a $20 on some pizza or something. More often than not, you’d end up with nearly $8 in change. That’s not chump change. After a week’s time, you’d be broke. But sitting on top of your dresser was $40 worth of coins.

Prior to the coins, loose change was always less than a dollar. By the mid-90’s, it was big money — but you still treated it like spare change. It added up quick — or more accurately, disappeared to the top of the dresser quickly.

A slight tangent — around the same time, a new banking feature was being test marketed on our campus by a company called Interac. The idea was just what Grant mentioned, you’d have an Interac card attached to your bank account that you could run through the Interac machines recently installed at all of the local establishments to make purchases. No need to carry any cash at all. Really, it was just a debit card. Before debit cards existed.

That experiment was obviously successful, though I never took part, with all of the debit card machines in every grocery store, and even fast food restuarants, these days. Back then, it was weird, and cutting edge.

But back to cutting out the penny, and maybe even the nickel, entirely. I happen to like the idea. It would definitely save the government a mint. But it would also likely cost the consumer more money too. Retailers, which would still accept cash, would need to “fix” their pricing so as to come out in 10 cent increments — and I can’t imagine many establishments would choose to round the number down. State sales tax would make it even a little trickier.

Another challenge is that while the actual physical currency would be eliminated, the value on paper would still exist — but there would be no way to, well, grasp it.

Being that we’re the type to bend over to pick up such small sums, I’d hate to see it considered as negligible.

I guess it’s an all-or-nothing type of situation. To me, you can’t eliminate the smallest value currencies unless you’re prepared to eliminate them all and fly with the bank card idea.

Of course, I’m totally in favor of that now.

(What I was thinking turning up my nose at it in 1994, I’ll never know…)

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You know me, always starting up a new idea before I finish the last one. It’s not a very good practice, but I’m on a roll.

Things are going so well with the debt payment plan that I have in place now (even though I’m only entering my second month…), I’m already looking to expand. Crazy.

But is it crazy?

By the debt repayment chart, my total debt (credit card and auto loan) is supposed to be $21,162.61 at the start of December.

With one more day left in November, my balance is $19,897.44.

That’s $1,265.17 ahead of schedule!

Perhaps I should have made my plan more aggressive right from the get-go. But now I’m thinking maybe I should work my mortgage to the plan and cover all of my debts.

Now, I know, some out there think that pre-paying your mortgage is a bad financial move, and that your return will be better if you just invest the difference instead. And on paper, that’s probably correct.

But to me, long term investing is kinda like throwing money into a pile that you can’t touch. That’s probably because 90% of my investments come in the form of a 401k, where I really can’t get at it. It’s almost like it’s not there. Just a number on a statement.

Accelerating the mortgage wouldn’t really hurt my finances much — hey, and extra $1200 towards priciple is a pretty big dent — and the way things stand right now, that $1200 isn’t in my bank account anyway.

My day-to-day and month-to-month finances don’t change at all in the short term.

But a few years down the road, my biggest bill — the mortgage — would be gone. And that will definitely alter my month-to-month finances in a huge way. A positive way.

I put together a little chart this morning to spec out the various scenarios:

Mortgage Pre-Payment ChartRight now, with my $25/week, plus an addition $50 or so to make the mortgage check a nice round number, I fall somewhere between the $100 and $250 lines.

While that’s good, the idea of finishing off the mortgage somewhere around 2024 doesn’t sound very appealing. That’s a long way off. I’ll be 48 years old then?! The thought of overpaying my mortgage for the next 17 years doesn’t really interest me.

But let’s say I jack up my $25/week up to $250/week (or around $1000/month). Then the mortgage will be paid off sometime in 2014 — just 6 years away.

Owning my house, free and clear, while still in my 30’s. That’s appealing.

VERY appealing.

As we near the end of the year, it makes it easier and easier to compare this year with last — and leaves time to make any end of the year attempts at besting last year’s numbers.

I use Microsoft Money to track my finances. Back in 1997, for unknown reasons (it probably had a nicer box than Quicken), I bought the program and started maintaining my checking account transactions.

After a few years of seeing how cool it was, once I had enough data, I expanded to keeping track of my credit cards. At first it was just the monthly balances, but eventually I started tracking every transaction and categorizing things accurately.

It took a few years to get things categorized to my liking, and by 2005, I had a pretty good system down. I’d added my 401k to the mix, my auto loans, basically everything financial.

The numbers this year look, well, okay I guess. I made more, which is always a good thing, but I also spent more.

While the original goal of 2007 was to increase my net worth to 6 figures, I think the main target in reaching that goal (which I won’t reach this year) was to curb my credit card use. And I think I’ve done that.

In 2006, I ran up $24,572 in credit card charges — $8k more than ever before. That’s a huge number. That’s an embarrassing number.

So far, in 2007, I’ve spent $22,305 on the credit cards. When you average it out over the past 11 months, that works out to around $2k per month, so adding in December, it will appear as though I’ve spent just shy of $25k this year too.

So why am I happy about that?

Well, though there’s a essentially no difference in the amount charged each year, there is a HUGE difference on where the money went.

In 2006, I spent all $24.5k on, well, stuff. The big expenses that year were a camera, a computer, a ring, a big car repair, and who could forget the hockey jerseys… Just stuff really. But that’s a lot of stuff.

Between July and August of this year, I charged $16k towards our home improvement projects. That’s something that isn’t going to happen again with any frequency. Take that out of the equation and I’ve really only spent $6305 so far in 2007.

I’ve cut my “stuff” expenses by 75%. And you know what? I still have plenty of stuff.

My habits have changed for the better and, at the same time, I can’t say my “quality of life” has declined any. At this rate, I’ll be credit card debt free this summer.

But it’s not all good news. While I spent less “technically” on the credit cards this year, I also paid less back.

In 2006, I sent $29,966 in payments towards three credit cards. This year, I only paid back $25,719. This is due in part to the aggressive repayment of the $12k bank loan we took out at the end of 2006 — and wasn’t a part of my “credit card” plan, but even still, that’s the only place I regressed.

Here’s the chart:

Credit Card Totals
That’s the great thing about tracking your finances in MS Money, or even Quicken if you choose that route. You can visualize your progress, and that’s a huge motivator.Look at the drop in Finance Charges!? That’s not something I would have noticed if not for this program keeping track of everything and all of its built in reports.

It just goes to show that, even when you charge like a madman, choosing the right card to use makes a big difference. And choosing when (and what) to refinance with a lower rate promo offer can save you tons. Look at that — that’s over a $2000 difference between 2005 and 2007. And the total balance hasn’t really moved more than $5k.

And to end on an even higher note, it’s truly reassuring to see that, even just taking into account the the credit cards on their own, I spend less than I pay back.

Even with these obscene totals, I can’t imagine how deep I’d be if that hadn’t been the case all along.

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Thomas JeffersonThis Thanksgiving, my wife and I attended the big football game between the two local high schools. The game itself was uneventful.

The weather, on the other hand, was quite nice. I actually came away with some color and we even considered taking the convertible out for a ride — not a common occurrence for the end of November!

But the highlight of the day came while we were standing in line to buy tickets. There were two women in front of us in line, and as one of them pulled her wallet out of her purse, a nickel fell to the sidewalk.

Ping!

She saw it. Her friend heard it — even looked down. Then they paid for their tickets and walked away!?

This wasn’t a penny…

I stalled a bit giving everyone in the vicinity the chance to snag the loot. No one moved. Not even the kids.

We shuffled forward with the line. Still, no one was making a move.

I bent down, picked it up, and dropped it into my pocket.

I was almost embarrassed. Ashamed, even.

It felt really awkward. Bending down to pick up something that wasn’t mine, and that so many people knew wasn’t mine. They had, in fact, witnessed the crime.

It sorta felt like I was being devious — taking someone else’s money. Were people judging me that way?

Or were they thinking I was a cheap?

To think, I bent down to pick up something that no one else saw any value in — but to me, it was, well, a typical Google Adsense click — and I’ll take those any day.

And even better, this was tax free. All five cents were mine.

I have no idea where that nickel ended up. It even could have rolled out of my pocket at the game, but it just blows my mind that people wouldn’t even make the smallest of efforts to pick it up.

I’ll even bend over for pennies, you?

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Gobble, gobble…With my paycheck coming in today, a day early, because of the holiday, I just fired off another $800 towards my Bank of America credit card allowing me to cross November off on my debt snowball payment chart.

In total, I ended up paying back $2075 total towards that card (around $550 extra); partly because I want it finished off a month earlier than the chart indicates, but mostly because I ended up charging just over $420 (!?) on it this month.

The big expense was a $220 upgrade for Adobe Illustrator, which gets chalked up as a necessary business expense. It is, afterall, a business card.

$420 – $220 = $200

Where’d the additional $200 go? I thought you were trying to cut back expenses and get rid of these cards?! You’re more flippy-floppy than any of the pf bloggers… I’m never reading pantsinacan.com again.

Well, $100 of it went towards a new mailbox. Since we had the house sided over the summer (they finally finished the job a couple of weeks ago?!), we haven’t had a mailbox on the house — just the old one sitting on the floor of the front porch. It had to be done sooner or later and the business card is the only card that I carry so that’s what paid for it.

The remaining $100 went towards gas. Perhaps it’s my age, but I’ve only paid for gas inside a gas station maybe twice in my life. And even then, it was with a credit card. Pay-at-the-Pump is the only way to go. I’ve even pulled out of gas stations with the indicator on E without filling up because the pumps didn’t have a credit card slot — it’s that much of a convenience for me.

Anyhow, across the entire snowball plan, this morning I’m sitting at a total balance of $20825. That’s $337 ahead of schedule.

Obviously, I’ll have to pick up the pace some in the remaining weeks to get the business card paid off in full, but I’m not against dipping into my ING Savings to make that happen.

Happy Thanksgiving!

(and for those in Canada and elsewhere — have a nice, um, Thursday.)

Mmm… Credit Crunch Bar!With all of the persistent news lately about how it will be harder and harder to borrow money, I’ve been really content with the fact that I’m well on my way to being out of debt and never really “borrowing” again.

But the deals from the various credit card companies that I hold accounts with have been getting sweeter and sweeter by the week.

Wait, I thought it was supposed to be harder to borrow money now? But the fed cut rates, so money should actually be cheaper to borrow, right?

Huh?

I’m not going to try to figure it out — I don’t really care.

But with teaser rates of 0% through December 2008 already arriving in my mailbox, well, it makes my mouth water.

But then I look at my little chart and realize I’ll be debt free by then anyway and into the trash they go…

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Can I get some fries with that?Over the years, my wife and I have often received gift cards to area restaurants. Most of them are for borderline fancy places too.

Just this week we received another $100 card.

Problem is, I’m a bit of a picky eater. Okay, that’s a stretch.

Put it this way, if french fries aren’t an option on the menu and refills aren’t free, chances are, I’m not going to like it.

I like to think that it’s my frugal taste shining through. Others may think it’s just that I have no taste.

The issue at hand now is that we’ve collected well in excess of $500 worth of these cards. All essentially useless to us. That’s frustrating.

Of course, we could re-gift them, but deep down, I have a fear that a $100 gift card from two years ago may have expired, wrong as that may be on the part of the restaurant.

My wife researched the various websites that allow you to trade gift cards this week, but it seems a little troublesome. It would be very difficult to find a trade partner (since many of the restaurants are regional at best), and in auctioning one off, well, we probably wouldn’t get even half the value and again, I’d be worried that I may have just sold an expired card to someone.

So what are our options? I’m thinking a few nights out at expensive restaurants where we can order to our hearts’ content to celebrate our newly open schedule.

It’s just a shame that I probably won’t enjoy any of the food.

And the refills probably won’t be free either.

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hockey.jpgSo this afternoon I put the finishing touches on my very first resignation letter which, barring any unforeseen circumstances, I intend to drop into the mail on Friday.

In addition to my full-time day job, through my own personal company, I’ve done contract work for a professional sports team in the area for the past ten years.

The team is, by far, the biggest client my small company has.

The ongoing project has been one that I’ve been really proud of.

Financially, it’s brought in nearly $15k each year for the past few. Not an insignificant number.

But I want to walk away.

It’s tough because I’ve never just quit anything that I’ve been good at.

I feel like I owe them something. And like, by leaving, I’ll be hanging them out to dry. Maybe I’m giving myself too much credit.

The fact is, they actually owe me. They’ve been notoriously behind in paying their bills — currently around $2400 behind.

Oddly, that’s something that’s accepted in this line of business (web design and photography services), for whatever reason, and that has a little something to do with my desire to walk away.

The bigger issues are time and respect. What are they worth?

For the past 10 years, I’ve been essentially tied to a computer just in case an email came through. When I was younger, that was fine. The excitement of being part of a professional team, and the perks involved, was enough to make it worthwhile. Also at the time, working until the wee hours of the night wasn’t a problem. Just a continuation of the university lifestyle — except with a paycheck.

Now that I’m over 30, married, and have a house of my own to take care of, I really wish I had the weekends free. I’m sick of spending every Friday, Saturday, and Sunday at the arena.

I wish I could come home from my primary job, lie on the couch, and just watch TV with my wife. Instead, each day I come home and, if there isn’t a game to go to, I march straight upstairs to the computer and sit down for a marathon session fulfilling requests for the team.

Of late, those requests have gotten more and more ridiculous. To the point, they don’t actually even relate to the team, or even the sport. Can you believe that?

And that’s where the respect issue comes in. I’ve never missed a home game for this team. I’ve worked for them since their second season of existence. As of today, there is only one person, a great guy too, who has been with the team longer than I have.

Over the summer, after a lot of last minute backdoor deals, the off-ice management of the team was taken over by another company — not the company that manages the actual on-ice product who we all previously worked for.

They, naturally, brought in a few of their own people — which in turn caused a lot of the veteran employees to bail out. I took note. I should have joined them, but decided to try to stick it out thinking that I’m on the fringes of the office — it should be business as usual on my end.

The “new” people they brought in are, well, let’s just say your typical inexperienced recent college grads that have been given a big fancy title right out of the gate. They’re on power trips. Big time.

I’ve always been the sort to respect my elders. Even at my real job, though I may be considered “higher-up” than some that are far older than me, I still look up to them simply because they’re older or have been with the company longer. It just seems like the right thing to do — ask those with more experience for advice.

That’s not the case with the next generation. The most frustrating part is that they’re not even fans of the sport — there is no passion there.

They’re not from the area — so they have no idea of the history or the market they now find themselves in. And they don’t care either. It’s just a job.

It’s obvious as day that they’ll likely only work here for a year or two before moving on — I’m sure you know the type. The day a new hire starts, for some reason, you can just tell if they’re going to stick or not.

In this business, for them, it’s a paycheck and a chance to rub elbows with pro athletes.

Well, from experience, that gets old. If you don’t love the game, it’s not the job for you. It doesn’t take long to come to the realization that 95% of professional athletes are selfishly arrogant SOB’s. That’s a fact.

What’s pushed me over the edge is that these disrespectful kids with fancy titles have been telling me how to do my job.

Again, I’m not one who won’t take orders from a higher-up.

But when, by all accounts, I’ve been doing a hell of a job since they were in the 4th grade and I’m told to take photos during “halftime” of a hockey game, well, that just rubs me the wrong way. I happen to know what I’m doing.

(For the non-hockey fans out there, hockey doesn’t have a halftime. There are three periods in a game and two intermissions. You’d think that to be employed by a hockey team, you’d actually have to have been to a hockey game before.)

Anyway, this move will put a pretty large dent in my income, but the idea of having weekends and evenings for myself is worth more than $15k ever could be.

Not looking forward to Friday, but looking very forward to the days ahead when I can finally, after all this time, go to a sporting event as a fan.

Go team!

Can You Dig It?

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