Plant a Penny, Grow a Money Tree

Next to my desk at work, on the window ledge, I have a money tree.

More often than not, my co-workers excitingly mistake it for a marijuana plant and move in for a closer inspection. Not sure what that tells you about my co-workers.

When I tell them it’s a money tree, they kind of roll their eyes like they always do whenever the topic of money rolls into my office, and then walk away.

Again, not sure what that says about my co-workers… ;0)

April will be the first month in my quest that I switch gears, making savings my top priority rather than debt repayment.

With Spring officially getting started (our daffodils in the yard have popped up) — it seems like the right time to start planting things.

No, not in my window this time, but in my ING account.

Yeah, rates are currently terrible, but I don’t have enough on hand right now to drop into a fund with Fidelity or Vanguard (my top two choices).

One penny at a time and it should build up pretty quickly, I’m sure, just like the debts fell. The ball is already rolling with my $75/week savings plan that kicks off tomorrow.

Hey, that’s 75000 pennies per week! Something is bound to grow, right?

By mid-Summer, I think some of my pennies will most certainly have become trees.

Things are really starting to fall together nicely.

Posted on March 31st, 2008 at 7:33 am by Brainy Smurf
Finance, Savings | 7 Comments »

Find IT on eBay

I buy my pants on eBay.

Contrary to what you might think, they don’t even come in a can. Yep, it’s true.

For years, the jeans I wore weren’t exactly designer, but they weren’t from J.C. Penney either. I’d say I was generally spending around $60-$70 on a pair of jeans.

For the past 5 years or so, I’ve bought my jeans at the GAP. They had one style I really liked — the Worker Jean.

Baggy, but not loose meaning the crotch didn’t hang at the knees.

Not a flair cut, but not an 80’s style taper either. You could still plainly see that I indeed did have feet.

No silly carpenter pockets all over one leg. No hammer loops. No rivets in places that should never have rivets. And no silly back pocket embroidery.

Basically, they were stylish enough and didn’t make me look like I was trying to be a teenager.

On a side note, isn’t it comical when you see a guy in his 40’s or 50’s with camo-cargo shorts down to his ankles and a graphic tee from Hollister on? They’re not fooling anyone… Hey, even I’d look ridiculous in an outfit like that…

I owned 7-8 pairs of those GAP jeans at any given time, or over $400 worth.

But then the supply started to dwindle. A hole here, a hole there. It was time splurge a little and renew the wardrobe.

I went online and saw that the GAP no longer offered this “cut”. Oh no.

Disappointed, I bought the closest thing they had — low rise boot cut — and… well, let’s just say that I haven’t worn that pair very often. They’re not the same.

Enter eBay.

Now, my wife used to do the thrift store thing pretty frequently before I met her and I did my best to curb her of that. Thrift stores just aren’t my thing. I mean, I’m not really fond of wearing other people’s discarded clothes. I realize eBay is the same thing, but eBay lacks the musty smell of a Salvation Army or Goodwill store. You can’t deny that.

For me, that makes all the difference.

Recently, I hit the gold mine when it comes to jeans. An eBay seller was offering SIX PAIRS in my size, in my cut, and all in one listing.

Generally when my size comes up on eBay, the pants get a few bids and sell for around $15-$20. Add another $5, or so, for shipping. Still a pretty good deal considering when new, they run around $70. (And from the looks of the pictures, the jeans are as ‘new’ as my low rise boot cuts.)

Since this auction was in a lot of 6 (dumb move on the seller’s part), there wasn’t much competition. There was only one other bidder, and a newbie at that.

Needless to say, I won six pairs of jeans for $32. It’s like an 85%-off sale. That’s less than $6 per pair!

Best of all, they accepted PayPal, so I didn’t even have to use the credit card (which I most certainly would have had I been at the mall.)

That’s a deal you can’t argue with.

Posted on March 30th, 2008 at 6:15 am by Brainy Smurf
Bargains, Cutting Costs | 6 Comments »

Kick off to the Savings Season

With my credit card balances wiped out, it’s time to start putting some of the newly available money towards savings.

My finances aren’t totally in order yet and it will still probably take another two paychecks before the shock of zero credit card debt sinks in.

By then, things should be settled and back into a nice easy to manage pattern where one paycheck pays all of the bills and the other paycheck goes towards debt repayment (or now, savings).

I’m not there yet, but to get the ball rolling right off the bat, I’ve set up an auto-savings plan with ING to transer $75 into savings each Tuesday (starting April 1) from my checking account.

Weekly payments served me well while paying down debt, so I’m going to use the same track when it comes to savings.

It’s not much, to start, and well short of my previously mentioned “In the Black” plan, but considering I had as little as $101.75 in savings earlier this week, it’s definitely a much needed improvement.

Posted on March 28th, 2008 at 6:23 am by Brainy Smurf
Finance, Savings | 1 Comment »

$28k+ Credit Card Debt Eliminated

Well, today is the day I’ve been waiting quite some time for.

I just sent a $508.13 payment to Chase and effectively eliminated the very last of my credit card debt!

I received my first credit card, the first one that wasn’t attached to my parents’ account, back in the summer of 1997. The very first thing I purchased with it was a computer from Dell.

That $4k computer served me pretty well, allowed me to start my own company, and held it’s own until 2001. In fact, I’m still using the monitor from that computer purchased back in 1997. I’m pretty proud that my first purchase wasn’t one I regret.

But the rest of the purchases I made on that credit card, and the numerous others I’ve used since, haven’t all been such profitable or wise decisions.

In 2000, I took a personal vacation that cost $7k, financed entirely on a Visa card. Can you believe that?

The crazy part, while I have fond memories of it now, at the time I didn’t really enjoy it all that much. To date, it stands out as the biggest and most frivolous 10 day spending-spree of my life.

Since I purchased my house, just 6 years ago, I’ve bought a new furnace, a new washer, a new dryer, I’m on my third (!?) refrigerator, a new roof, new siding, new doors, lots of new furniture and I charged every single one of them.

I’ve also charged well in excess of $50k on game used hockey jerseys over the years.

Thankfully, they tend to hold their value and often increase in value. It’s tough to call that a stupid expenditure when I really enjoy it and the option is always there to sell them, but at the same time, the amount of money I’ve thrown towards it over the years is staggering — especially when I was casually using a credit card to finance it because I really couldn’t afford it.

One of the most intelligent things I’ve done using credit cards was financing last year’s home improvements by spreading it out across multiple cards and taking advantage of promo offers.

In the end, I believe we financed the entire project just above 4%. The previous year when we went the more traditional route, taking out a home improvement loan to finance the roofing project, the rate was a ridiculous 15.5%.

As a result, in the future, credit cards will be my financing method of choice when an expense comes along that I can’t afford. That is, if they still offer the nice promo rates in this “new” economy.

If you click on the chart above, as recently as June of 2007 (less than a year ago!), my total credit card debt was near $20k.

Today, it’s 100% gone.

The hockey jerseys are paid for. The vinyl siding is paid for. The roof is paid for. The furnace is paid for. The computers are paid for. The camera equipment is paid for. The BMW is paid for. Even the $7k vacation nearly a decade ago is paid for…

It feels good. Even had a little extra spring in my step as I walked into work this morning.

All that’s left now is the one remaining auto loan and that shouldn’t be there for long…

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If you’re going to use credit cards, you should make sure to stick to the best credit card offers and to only spend within your means. Take the money you don’t spend and put it in an internet bank savings account. The best savings accounts have a pretty good interest rate. The younger you are, the more important it is to save your money.

Posted on March 27th, 2008 at 6:37 am by Brainy Smurf
2008 Goals, Credit Card, Finance, Success | 26 Comments »

Connecticut Named Richest State

Connecticut might not be gaining people very fast, but it’s at the top of the pack when it comes to gaining income. In 2007, Connecticut not only remained the nation’s richest state — it widened its lead, a report today showed.

Total income per person rose from $50,762 in 2006 to $54,117 last year — the highest in the nation and more than 40 percent higher than the national average of $38,611, according to the report, from the U.S. Department of Commerce.

The 6.6 percent gain in Connecticut’s per capita income from 2006 to 2007 was well above the 5.2 percent national average.

Connecticut’s high proportion of white-collar workers has been a major factor in keeping the state’s per capita income the highest in the nation; 39 percent of workers over 16 saying they are employed in management or professional jobs, according to the Census Bureau’s 2006 American Community Survey. Another 15 percent said they held office jobs.

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I knew I lived here for a reason…

But seriously, while it might sound like it’s the greatest place in the world to live, it’s also very expensive… Not Southern California expensive, but not real far off either…

I couldn’t find the raw data anywhere, but I find it shocking that the total income per person was around $54k!?

Do they really mean per person?

I’m pretty sure the “average” family of 4 in Connecticut isn’t pulling in over $200k… At least I hope not… or I’ve got to start thinking about getting a second job!

My guess is that it should say that it was the average among wage earners.

Still seems a wee bit high to me.

Posted on March 26th, 2008 at 1:01 pm by Brainy Smurf
Current Events, Life | 1 Comment »

Señor Bernanke? In a Sombrero? Really?

You hear about “the Fed” on every broadcast of the nightly news these days, you see his face more often than not in the graphic to the right of your local anchor’s head, but who is this guy? Where did he come from?

Amazingly enough, Ben Bernanke came from South of the Border…

No joke.

For anyone who has ever driven the entire length of I-95, from Maine to Florida, there isn’t a lot to look at. From Boston to New York it’s a seemingly endless traffic jam for no apparent reason. New Jersey to Washington DC is just one toll booth after another.

Once clear of the related congestion, things open up, but then you have to deal with the Virginia drivers.

This is also where the signs begin to pop-up for Dillon, South Carolina’s kitsch roadside attraction “South of the Border.”

This is no Taco Bell.

The billboards for this place start to dot the shoulders along I-95 well over 100 miles in advance — with mileage updates every few miles. It actually makes the drive go by a lot faster, getting a small chuckle every few miles.

For a kid, or even an adult, the anticipation these signs ingrain is incredible. You honestly start to think that in “just” 133 miles, you’ll see the greatest thing in the world.

Five miles later, it gets even better. “You never sausage a place.”

By the time you hit the South Carolina border (assuming you’re traveling south), and then Dillon, you can see the Sombrero tower on the horizon. You’re there.

The destination you’ve heard so much about, albeit via primitive highway billboards.

Yes, you’re now South of the Border.

And this is where arguably the most influential man in the country today got his start…

Waiting tables… wait for it… wait for it… in the Sombrero Room.

My wife and I stopped (how could we not?) and, gasp, even stayed at South of the Border back in 2006. I can’t say it was the greatest hotel we’ve stayed in (what can you really expect for under $40/night) and I wouldn’t recommend staying there, but they weren’t kidding on the billboard where they state that they have a car port for every room. They really do.

In fact, I’d guess that almost everything they boast on their 100 or so billboards is actually true. It’s… odd.

We spent a couple of hours walking around, posing for photos with all of the ridiculous kitsch sculptures as most of the shops and attractions were closed while we were there. Understandable as it was late on a Tuesday night, I believe.

But we did have a late bite to eat there, oddly enough, in the Sombrero Room. Unbeknownst to us at the time, it was Bernanke’s old stomping ground. It’s hard to fathom.

I remember being slightly disappointed with the quality and the service but quite happy about the price.

One thing I don’t remember, however, were any future Fed Chairman types working the counter.

Hey, you never know…

Posted on March 26th, 2008 at 7:40 am by Brainy Smurf
Current Events | 1 Comment »

Goal on the Verge of Being Crossed Off

Having just submitted payment for my auto insurance this morning (via an e-payment), all of the bills are now paid for the month of March.

Nothing due to come in until the second week of April.

Best of all, I only have $500 left in credit card debt and payday is this Thursday.

Wow.

Looks like I’ll be crossing off this goal for 2008 by the end of the week:

Eliminate all credit card debt by the end of June 2008. Current credit card debt is $10318. I’m aiming to achieve this goal slightly ahead of schedule, by about a month, according to the snowball plan I started in November.

The auto loan is in my sights now…

Posted on March 25th, 2008 at 6:15 am by Brainy Smurf
2008 Goals, Finance, Success | 1 Comment »

Re: Carnival of Personal Finance #145

So I participated in my very first “Carnival of Personal Finance” this week and I have to admit that for the past few months, I’ve been avoiding all of the carnivals as they’ve always seemed a little goofy and essentially nothing more than, well, link farms…

But I must say, it’s brought me some new traffic and best of all, it’s also opened my eyes to a ton of blogs that I hadn’t ever read before.

I think it’s safe to say, I’ll be back…

Posted on March 24th, 2008 at 6:38 pm by Brainy Smurf
Blogging? | 1 Comment »

The “In the Black” Plan

I’ve started putting together a few ideas for when the time comes that I’m finally in the black (excluding the mortgage).

My first idea was sparked by a recent comment that Dedicated made on my posting about my rapidly approaching dilemma of uncertainty.

After running the numbers this morning, over the past 36 months, I’ve been paying down my credit cards at an average rate of $2441.66 each month, or in weekly terms, around $563 per week.

With that monthly expense eliminated 100%, I should, in theory, be able to reach my goal of $10k in savings by applying that former payment towards savings in a little over 4 months. That is astounding to me.

More realistically though, with my income down somewhat after dropping numerous clients on my side business, I think a slightly smaller goal of $400/week to ING is within reason.

This too may be difficult as I’m not taking into account the additional money I’m paying towards the mortgage on a weekly basis, but I’ll give it a shot and see where it leads me.

At a rate of $400/week and not including any interest earned, $10k is just 25 weeks away or less than 6 months.

That sounds like a plan for now, but first I’m going to concentrate on paying off the auto loan…

The 2008 goals all seem to be falling into place nicely — especially considering we’re just beginning our 13th week of the year.

Posted on March 24th, 2008 at 6:44 am by Brainy Smurf
2008 Goals, Finance | 1 Comment »

Thank You, Easter Bunny!

Posted on March 23rd, 2008 at 6:24 am by Brainy Smurf
Current Events, Retro | No Comments »

Not So Lucky Lotto Winners

You can’t win if you don’t play. That’s my problem. I don’t play.

But for those out there who do play and are hoping to get rich via the lottery, here’s a story from Canada that may make you re-think the “lucky” numbers you select…

239 2nd-prize tickets cut payout

Second-prize winners of Wednesday night’s Lotto 6-49 draw probably thought Lady Luck had favoured them in a big way, but she actually smirked instead of smiled.

The draw for a $3.99 million jackpot saw 239 tickets with five of the six winning numbers plus the bonus number, making for a smaller second-prize payday than some ticket holders might expect.

Total second prize money was valued at $285,294.30, but holders will only receive $1,193.70 each after the loot has been divided.

The number of second-prize winners is striking when compared to recent draws for similar jackpots

Don Pister, a spokesman for the Ontario Lottery and Gaming Corporation, said a draw on March 15 yielded only three second-prize winners, while no one picked five numbers and the bonus on March 5.

Pister conceded Wednesday’s result was unusual, but said only one factor is to blame.

“6-49 draw results are determined solely by random chance, so every set of possible six numbers coming has exactly the same chance as any other set,” he said in an interview.

Pister said the nature of the winning sequence also played a role in skewing the number of second-place finishers.

The numbers 40, 41, 42, 44 and 45 were all winners while 43 rounded out the consecutive string as Wednesday’s bonus number. The opening number was 23.

In addition to the 239 second-prize winning tickets, a further 106 winners picked five correct numbers without the bonus. The top prize went unclaimed.

Pister said many winners play consecutive numbers as a matter of course, but cited the popularity of that particular string for the high number of winners.

He said that particular set often corresponds to people’s ages or the years in which they were born, making them common choices for habitual lottery players.

Tom Salisbury, a professor of mathematics and statistics at York University, was less surprised by the sequence of Wednesday’s winning numbers as by the number of people who appear to adopt a losing strategy.

He said lottery fortune-hunters who consistently choose numbers in a pattern run a much higher risk of having to share the wealth than those who play random numbers.

He said Wednesday’s results only prove that playing consecutive numbers in a popular group like the 40s is not a surefire route to easy street.

“The moral of the story is that if you’re one of the people who chooses six numbers in a row, it’s certainly not going to help you win. And if you win, it’s going to guarantee that you don’t take much money home,” Salisbury said.

One thing that did appear to be well dispersed was the location of Wednesday’s numerous second-place winners.

Although 120 of them hail from Ontario, 16 prize cheques will be bound for Atlantic Canada, 63 for Quebec, and 40 for the western provinces.

Can you imagine going to collect your winnings, expecting $285k and walking out with under $1200?

I wonder if they’ll even bother with the giant oversized novelty checks (or in this case, cheques) with this many winners?

The quoted article above was by Michelle McQuigge.

Posted on March 21st, 2008 at 2:20 pm by Brainy Smurf
Current Events | 1 Comment »

Monthly Payments vs. Weekly Payments

While paying down my debts, I’ve noticed that there is one thing that stands out more than anything else as being responsible for my success.

I’ve been doing some calculations recently on how I’ve managed to pay down my debts as rapidly as I have.

What I’ve found is that the pace seems to exceed my income — I mean, I can’t believe that I made $4615 in payments to credit card companies during my January 2008 billing period, but I actually did.

The secret?

Weekly payments. More specifically, automatic weekly payments.

Some will say that the difference it makes in finance charges alone is reason enough to go the weekly route (or the often mentioned twice-monthly mortgage payment), but for me, it’s just easier to part with, say $100 each Wednesday than it is to part with a big number like $400-$500 once a month.

That’s a big noticeable drop in the checking account for people like me who generally only have between $1000 and $2000 in there at any given time. $100 is like a new outfit or something — I dunno, it’s totally a mental thing, but it really doesn’t hurt the wallet as much as a huge one time payment.

The $4615 “payment” in January is admittedly very high for me and I’m not usually able to make payment even close to that.

It’s also a little deceptive because of the way my credit card due dates overlap — January isn’t just 4 weeks, it’s more like a time period of 6-7 weeks depending on when each billing period begins and ends.

Besides the down payment on my house, and a couple of the high priced renovations, I have *never* written a check for even close to $4615 dollars. I don’t have the funds available to write checks that large.

But let’s divide that $4615 by 7…

$4615 / 7 weeks = $659.29 per week

Still a high number, and not an amount I’d like to part with, but it’s an amount that I’m at least capable of parting with.

Yeah, it’ll bring my checking account balance down by over 30% with each payment, but on a short-term basis it won’t wipe me out before the next pay day comes around.

It’s this process that allowed my debts to fall so quickly.

I’m certain that I wouldn’t have been mailing in $1000 each month to the credit card companies (that’s a hefty sum), but $250 per week? Well, that’s not so bad.

So that’s what I did.

And you know what?

It worked.

Posted on March 21st, 2008 at 6:01 am by Brainy Smurf
Credit Card, Finance, Success | No Comments »