Monday, December 31, 2007

Happy New Year!!!

2007 is in its last hours, and we are preparing to enter a New Year, full of challenges, excitement, ups, and downs.

To everyone, I wish a safe and happy New Year to you and yours.


God Bless,
Jonathan


If you enjoy this post, be sure to subscribe to my rss feed.

Debt and Savings Update 2007 #3 - 12/31/2007

This is my last financial "snapshot" of 2007.

For me, 2007 is the year I finally got my act together and started my financial makeover. After years of carrying credit card and other consumer debt, I am tired of living paycheck to paycheck, floating through on credit cards, and paying out a full month's worth of expenses annually in finance charges alone.

I am looking forward to 2008, a year to continue my progress towards a brighter picture of personal finance - turn the occasional crisis into a mere inconvenience with emergency savings, lay a better framework for the years to come through investing, and most importantly, reduce the consumer debt so we can stop throwing our money away on interest payments.

So, here is the our Debt and Savings Update for 12/31/2007:

Savings - $890.53

Goal Savings (ING) - $190.53
Short-Term Emergency (Key) - $200.00 (Target: $500.00)
Short-Term Emergency (USAA) - $500.00
Long-Term Emergency (UFB) - $0

The Short-Term Emergency accounts are linked to each of our checking accounts and are there to help in a pinch if we fall short between paychecks. The challenge with these accounts will be their accessibility and the temptation to use them for impulse purchases. The target for the short-term emergency accounts is $500 each, enough to cover most of the little emergencies without putting too much money in a low-yield account.

The Long-Term Emergency account is my priority for the beginning of 2008. The initial goal for the account is $1,000, to cover any minor unexpected expenses, with the ultimate goal being 3-6 months of living expenses. I just opened an account at UFB with 5.10% APY, and plan to start automatic contributions with my next paycheck.

Investments - $2,195.12

Edward Jones - $1,870.12
Prosper - $175.00*
Lending Club - $150.00*

The EJ account will eventually be our house downpayment, and is growing slowly but surely. I opened the two P2P accounts more out of curiosity and boredom, but mathematically the returns seem to be worth the increased risk. I want to see how these first few loans work out. I am going to report the total value of the account, as remaining loan principle plus current account balance, for lack of any better idea how to report the value of the investment.

Debt - $43,545.67

Universal - $8,250.00 (1.99%)
Capital One - $0.00 (15.4%)
Citi - $2,970.00 (10.24%)
USAA - $10,231.07 (11.65%)
Student Loan - $4,424.39 (6.97%)
Toyota Loan - $15,622.64 (7.4%)
Medical Loan - $192.44 (0%)
Medical Debt - $1,855.13 (0%)

I made substantial progress on the medical loan, thanks to my christmas bonus and some other gifts. I will have the full medical loan paid off on February 1. The USAA Credit Card should be the next debt target, but I am contemplating hitting Citi first, since the interest rates are so close and the Citi balance is so much lower - it will be a psychological boost to pay the balance in full, and I think I can do it in a couple of months.

Total Net Worth - $40,460.02 (-)

Comparison:
12/15/2007: $44,616.04 (-)
12/3/2007: $46,230.24 (-)

If you enjoy this post, be sure to subscribe to my rss feed.

Saturday, December 29, 2007

Articles Worth Re-Reading this Saturday Morning

Here are some articles that I enjoyed reading this week:

Latest Online Bank Savings & Checking Rates at The Sun's Financial Diary provides a list of the current rates from several online banks. As we build our emergency fund and other savings accounts, I want to make sure that money is working as hard as it can for us.

How to Deal with your Spouse and Get Out of Debt at Journey to Financial Freedom offers good advise for dealing with money matters with your spouse: Understanding your spouse's Character in Money, developing a communication style, compromising, and setting up a plan and taking actions. Since money is the leading source of marital discontent, any advice is always welcome!

Cash Money Life is Now a Member of M-Network at Cash Money Life announces the newest addition to the M-Network. I always enjoy the advice and lessons from the M-Network, and Cash Money Life will only improve the value of the M-Network.

http://www.thedigeratilife.com/blog/index.php/2007/12/23/beat-a-debt-habit-profit-from-cleaning-out-your-house-my-roundup/ from The Digerati Life is a roundup of the articles that Silicon Valley Blogger found helpful, as did I.

Do You Have a Will? Estate Planning 101 at Moolanomy provides the basics of Estate Planning and some questions that everyone should be asking themselves. Although we don't have any substantial assets right now, looking forward this is something we really need to do.

How to Fight with your Spouse about Money by Karen Datko at Smart Spending is another helpful article about money matters and marriage. She suggests examining your own attitudes about money, making sure you've identified the real issue, considering the place and time of the money discussion, being honest with your spouse, listening to your spouse, seeking compromise when possible, seeing the long term, and seeking help.

The Road to Becoming Debt Free is a guest post by Ryan of Uncommon Cents posted at Blogging Away Debt that offers more helpful advice for those of us burdened by comsumer debt. He suggests that we don't incur new debt, scour existing expenses for places to cut back, use free (or at least lower cost) services, ask for a reduction in interest and use balance transfer offers (with caution), make sure the unspent dollars from your cost cutting measures goes toward your debt, and find ways to increase your income. The advice is universal, and is a common theme across most PF blogs, but it always helps to see another perspective.

Zen and the Art of Item Replacement from The Simple Dollar provides sound advice for replacing property: (1) If it isn't broke, don't replace it, (2) When you do replace something, replace it with long term quality and reliability, (3) Upgrade before the end of the lifespan only if there is a clear and compelling functional reason for the change, (4) No item is upgraded unless all parties agree on the need, (5) Try to avoid things that have a steady "upgrade" cycle. Adhering to these rules will definitely help reduce expenses.

Everything You Want To Know About the Millionaire Mommy Next Door - And What She Can Teach YOU! at Millionaire Mommy Next Door provides a biography and FAQ stemming from her appearance on the Montel Williams Show. I've been reading MMND for a while, and have always found her to be a source of motivation and ispiration.



If you enjoy this post, be sure to subscribe to my rss feed.

Thursday, December 27, 2007

Knowledge is Power: Instant Gratification

Put a young child in a room, make a small reward available to him, and tell him that if he doesn't touch the small reward for a period of time, he will receive a larger reward. What happens?

  • He grabs the small reward, or
  • He screams, shouts, and yells in an attempt to get the larger reward sooner, or
  • He quietly occupies himself, whistling, humming, walking around the room, patiently waiting for the larger reward.

In the 1970's, US Psychologist Walter Mischel conducted this study and observed all three reactions amongst the participants. He put a series of 4-year-olds in a room with a bell and a marshmallow. If they rang the bell, he would come back and they could eat the marshmallow. However, if they waited for him to come back on his own, they got two marshmallows.

The children who waited longer for their reward went on to have higher SAT scores, attended better colleges, and had better adult outcomes. Those who rang the bell sooner went on to become bullies, had worse teacher and parental evaluations, and were more likely to have drug problems by age 32.

Self-control is a deeply-rooted behavior, but can be improved through consistent reinforcement and conscious decisions. Children subjected to the same test repeatedly got better at it over time. Children with parents who demonstrate self-control, who use every opportunity to teach self-control and demonstrate the rewards, demonstrate an improved self-control themselves.

What relevance does this have to personal finance? Self-control in personal finances takes practice, perseverence, and determination. We have to teach ourselves, through conscious decisions, to save rather than spend, and to wait for the right opportunity rather than jump at the first opportunity. I will use an extension of the Mischel experiment to demonstrate:

Take an adult who wants a new television that costs $1200. Put the adult in a room with a new television, a credit card, a cash account with a slowly increasing balance, and a bell. The adult can ring the bell, swipe the credit card, and walk out with a new television and a credit card balance, or he can wait until the cash account balance exceeds $1200 and walk out with the television and no debt. What happens?

If you enjoy this post, be sure to subscribe to my rss feed.

Monday, December 24, 2007

An Alarming Look At Our 2007 Spending

I decided just over a month ago to turn our finances around, get out of debt, and start saving for the future. In the long run, changing the way we manage our finances will secure a comfortable future - home ownership, capacity to handle emergencies, and ultimately retirement. In the short-term, so short that it is already starting to happen on the smallest scale, we will have more money for the things that are important to us by prioritizing our spending and applying a little common sense to our budget.

Part of the process to turn our finances around has been carefully analyzing our spending. Luckily, I used Quicken all year and have been vigilant about entering and categorizing every expense. I've been pulling reports from Quicken this month to figure out where our money goes, and it is definitely alarming.

The winner of the unnecessary and wasteful spending is ...

Finance Charges - $2,676.81 - This is the category that we are actively reducing. Carrying $43,000 in various forms of credit adds up quickly. One of our financial priorities is to eliminate debt - and fast.

With the money we paid out in finance charges this year, I could have bought the following items from my Wishlist:

4 Gateway T2080 Dual-Core 1.73GHz 15" Widescreen Laptops ($600 ea)
1 Sony Bravia KDL-46XBR2 46" 1080p Widescreen LCD HDTV ($2000)
5 Envision 32" LCD HDTVs ($500 ea)
17 Harmony 880 Universal Remotes ($145 ea)

Or ...

I could have purchased a Gateway T2080 Laptop ($600), an Envision 42" LCD HDTV ($700), and a Harmony 880 Remote ($145) and still had $1,155 left in savings.

Yet another addition for the long list of reasons to dig out of debt.

If you enjoy this post, be sure to subscribe to my rss feed.

I'm marking my calendar - Our First Debt-Free Christmas!!!

I did it! It is Christmas Eve, we're done with all of our gifting, and we made it through the season with $0 added to the credit cards.

That's not much of an accomplishment, you say.

I have lived on credit cards for the last 9 years, acquiring over $20,000 in credit card debt during that time. During that time, I went through periods of "debt-free" living, weeks or months without using a credit card, telling myself that I had to dig out of debt, but I always ended up caving in sooner or later and falling back into bad habits.

Towards the end of November, I decided that it was time to break the habit once and for all, and I'm doing it in the public's eye with this blog. I set up our finances to automatically contribute to our savings and investments, finally starting an emergency fund, and prioritized the debts. Now, any extra money we have is split between "rewards" to ourselves, debt snowflakes, and savings, and so far, I've made more progress in one month then I did all year.

With no time elapsed between starting on our road to savings and debt reduction and the onset of the holiday season, I can't believe we pulled it off - 100% of our christmas spending was cash. Of course, the money spent on christmas gifts could have lowered our debts, but it felt good giving thoughtful gifts to our friends and family - and even better not paying interest on them!

I am excited about the new year, and I can't wait to keep saving! To everyone, we wish you a safe and Merry Christmas!

If you enjoy this post, be sure to subscribe to my rss feed.

Saturday, December 22, 2007

Motivation and Inspiration for Saturday

Here are some articles that I found particularly helpful this week:

Manage Your Finances Together from Gather Little By Little suggests that couples manage their finanaces together, and recommends periodic budget meetings - seems intuitive, but not necessarily.

9 Financial Tips, by Patrick at Cash Money Life, is a part of the "12 Days of Christmas, Personal Finance Style" thread. Patrick lays out 9 basic financial tips: Set your financial goals, Spend Less then you earn, Increase your income, Pay down your debts, Invest your money, Find ways to save money, Make it automatic, and Give and ye shall receive. Tips we have all heard, for the most part, but nevertheless an excellent compilation.

Is an All-Cash Lifestyle Useful for Kicking the Debt Habit? by Trent at The Simple Dollar, points out that if the only way to avoid debt is to destroy all credit cards is not a true reform in financial behavior, but is rather like riding with training wheels. The goal should be learning how to use credit cards responsibly. I have to agree, and that's my goal.

Stop Asking Me If I Want To Apply For Your Silly Credit Card, at No Credit Needed, gripes about the incessant credit card offers pushed by ever retail clerk in America. "Woud you like to save 10% by applying for your card?" Just what I need - more credit inquiries, more available credit, and potential to pay that 10% and more on the exorbitant interest rates!

These People Must Know What They're Talking About, by Karen Datko at Smart Spending, is another source of inspiration and motivation, and one of the main reasons I love reading Personal Finance Blogs. Whenever I feel like I'm spinning my wheels and I'm doomed to a life of debt, it always helps to read success stories from people who made it work.

Another motivational post, You CAN Get Out Of Debt, by Ana at DebtFREE-Revolution, is a pep-talk for anyone struggling to get out of debt.

Don't Let Great Marketing Catch You Off Guard, by Pinyo at Moolanomy, discusses some of the advertising campaigns that impact consumers' purchasing trends. Only the most astute consumer is able to resist the marketing machine, and if you fall for the claims in every advertisement, you will no doubt pay for it.

If you enjoy this post, be sure to subscribe to my rss feed.

Thursday, December 20, 2007

Hidden Savings? The Flexible Savings Account

I was shocked today to find out that none of the managers that I work with are taking advantage of the Flexible Savings Arrangement (or Account) that my company offers. I suppose I shouldn't be shocked - it is hardly advertised to our employees and never discussed in the workplace. I wonder who else isn't familiar with Flexible Spending Accounts.

The Medical Expense FSA is one more resource to save considerably on annual expenses by setting aside pre-tax dollars for basic medical purchases. The FSA can be used to pay for any medical expenses except insurance premiums, cosmetic items, cosmetic surgery, or items to improve "general health." The medical expenses covered by the FSA include co-payments, co-insurance, and deductibles, plus dental and vision expenses and over-the-counter drugs. A better list of allowed expenses is available at FlexibleSpendingAccountsOnline.com.

The method for filing claims depends on the company holding the FSA. In the case of our company, they offer an FSA Debit Card for a $20 annual fee, or we can file via fax for free. Once the claim is faxed, with the appropriate documentation or receipt, the funds are deposited to my bank account within 24-48 hours.

To further promote the Flexible Savings Account, lets look at the numbers:

Assumptions:
- 25% tax bracket for taxable income of $31,850-$77,100 (Single)

- We'll use $70,000 taxable income

- $2000 in annual medical expenses

Without the FSA:

Taxes on $70,000 are calculated as $4,386.25+25% of the amount over $31,850. For our $70,000 this means $13,923.75 in taxes, with $56,076.25 in after-tax earnings. After your $2000 in medical expenses, you have $54,076.25.

With the FSA:

Your taxable income is $68,000, meaning $13,423.75 in taxes, with $54,576.25 in after-tax earnings. After your $2000 in medical expenses, you still have $54,576.25.

The Comparison:

Using the FSA for $2000 in medical expenses saves you $500.00.

So if it saves so much money, why not use it?

As with anything, there are a few drawbacks. First, you have to file the claims. This requires a few extra minutes to save your receipts, prepare the fax cover-sheet, and dial the fax number. Second, the FSA is a use it or lose it account. Whatever you don't spend during the year, you forfeit.

If you enjoy this post, be sure to subscribe to my rss feed.

Tuesday, December 18, 2007

Finding the balance - Spending vs. Saving

I equate managing my money to managing a business - "money in" needs to exceed "money out" in order to be profitable. If only it were that easy.

What are the key factors that impact the success of a business?

Customers - No business is successful without selling a product or service to the customer. Customers generate income. Good customer service produces happy and better paying customers, and thus more income. My customer, the source of my income, is my employer. The happier my employer is with the services I provide, the better and more reliable my income stream becomes.

Employees - Quality employees are crucial to the success of a business. Depending on the nature of the business, employees produce a product, provide a service, or perform any of a number of ancillary tasks necessary for others within the company to produce a product or provide a service. I am the only employee on the payroll of my personal finances. Employee satisfaction plays an enormous role in quality of work and productivity. In other words, the happier I am, the more productive I can be in providing services to my employer and performing all of the ancillary tasks necessary to provide those services.

Taking the essentials of business management and applying them to my personal financial management:

Employee Satisfaction: Even though it reduces the profit margin, it is necessary to direct some expense to projects and programs geared specifically at improving employee satisfaction. I need to spend some money on myself, through "luxury" expenses, entertainment, and personal and professional development in order to cultivate employee satisfaction and improve productivity.

Invest in the future: Any good business manager knows that a stagnant business will flounder. The business needs to keep pace with a changing market, and some funds need to be invested in new product lines, research and development, marketing, and such - funds with no explicit payoff, but statistically will improve the performance of the business down the road. Some money needs to be invested in my future, through education and training, savings, and retirement planning.

Why am I writing all of this?

I have always struggled to find the right balance in my expenses. Through college and after graduation, I spent too much to develop "employee satisfaction" without a sufficient increase in productivity to cover the expense. The resulting debt continues to haunt me years later. I started to swing to the other end of the spectrum, ignoring "employee satisfaction" and instead focusing on debt repayment and savings. The resulting drop in employee satisfaction quickly led to burnout at work. If left unchecked, that burnout could threaten my productivity enough to impact income.

With every review of my budget, I reconsider the rates for debt reduction and savings and the amounts available for entertainment and "employee satisfaction" projects - new uniforms (clothing), work environment (household purchases), and benefit packages (vacations and such). With every review I get a little closer to a balanced approach to debt repayment and savings with enough "all about me" expenses to break up the month.

If you enjoy this post, be sure to subscribe to my rss feed.

Sunday, December 16, 2007

I got hit by the stupid tax.

The Stupid Tax (n.) - Extra dollars paid out for no reason other than an inattentiveness to the situation.

In July I accepted a promotion at work, bringing with it a company cell phone with little to no restriction on how I use it. Since I don't really want to carry two phones, I have converted over to the new number exclusively and turned off my personal cell phone.

I do not anticipate losing the company phone any time soon, and when I do I have no problem with taking on a new cell number. I could not, however, cancel the service on my personal phone because it was under contract, and paying a $200 early termination fee doesn't seem reasonable when I can ride out the last five or six months of the contract for less.

I was reviewing my cell phone statement the other day, and it turns out my contract was up two months ago - altogether I paid three extra months for cell service that (1) I had no intention of using (2) without any justifiable reason except that I wasn't paying attention.

$90 down the drain. Rats.

If you enjoy this post, be sure to subscribe to my rss feed.

Saturday, December 15, 2007

Some Saturday Afternoon Reading

As I read the various articles in my Google Reader, I star some of the articles that I find interesting and want to read again. On Saturdays, time allowing, I want to share links to those articles.

Six Streams of Income - Most people are familiar with diversifying investments, but Pinyo at Moolanomy talks about diversifying income. By generating income from several sources, losing one source will not lead to disaster.

A Talk With My Niece - Trent at The Simple Dollar writes about a talk with his niece where he gives some valuable advice about life - Listen to your heart above all else when deciding what to do, Debt will become your prison if you let it, You will make mistakes - don't make them into excuses, Be nice to everyone, even the people who seem "below" you, and The highest paying job is rarely the one you want. Even though this was advice given to a 15-year-old, it is definitely applicable to everyone.

51 Painless Money-Saving Tips - Karen Datko at SmartSpending gives 51 ideas to cut expenses and save money. Of course not all of the tips will work for me, but even if just a few work, that's a few dollars saved.

12 Investing Mistakes I've Made, and How You Can Learn From Them - Since I am just now learning about investing and considering my options, I had to read into the investing mistakes that Pinyo at Moolanomy made.



If you enjoy this post, be sure to subscribe to my rss feed.

Changing the way that I calculate my Net Worth

Until now, I have been reporting my Net Worth by taking the sum of the checking and savings account balances and subtracting all of the debt:

My Checking
Her Checking
Billpay Checking
ING Savings
Investments
Credit Cards
Medical Debt

I was not including the auto loan, since the value of the car more or less negates it. However, in looking at the auto loan this way, I realize that I've been tricking myself into thinking I have less debt than I do.

In addition, I have been including the Checking balances, and usually recalculating Net Worth early in the pay cycle when our checking balances are up, further inflating the Net Worth calculation.

To provide a figure that is more valuable to me as a reflection of our current financial situation, I will be using the following values to calculate Net Worth:

Savings - $670.94:
Short-Term Savings (USAA)
- $400.41
Short-Term Savings (Key) - $100.00
Goal Savings (ING) - $170.53
Emergency Fund (ING) - $0.00

Investments - $1804.34:
Edward Jones
- $1654.34
Prosper - $150.00

Debt - $47,092.32:
Universal
- $8,250.00 (1.99%)
Capital One - $0.00 (15.4%)
Citi - $2970.00 (10.24%)
USAA - $10,300.00 (11.65%)
Student Loan - $4,462.21 (6.97%)
Toyota Loan - $15,622.64 (7.4%)
Medical Loan - $3,361.34 (0%)
Medical Debt - $1,855.13 (0%)

Total Net Worth - $44,616.04 (-)

This is the calculation for Net Worth that I will report in my Debt and Savings Updates. The NetWorthIQ value will still include all assetts, i.e. checking and auto value. However, I think by excluding those when I look at the numbers, it will give me a far more accurate idea of our progress.

Using these new values, here are the Net Worth recalculations for the previous Debt and Savings Updates:

Debt and Savings Update #2 - 12/14/2007 - $44,616.04 (-)
Debt and Savings Update #1 - 12/3/2007 - $46,230.24 (-)

Friday, December 14, 2007

Debt and Savings Update 2007 #2

Debt and Savings Update 2007 #2 - 12/14/2007

Checking - $1,483.31

Savings - $670.94

  • Short-Term Savings (USAA) - $400.41 - I am within $100 of fully funding my short term savings account at USAA. The goal for this account is $500, to use as a personal "line of credit" in the event of unexpected expenses to float until the next paycheck.
  • Short-Term Savings (Key) - $100 - I just opened this account today and plan to use it just as I use the USAA Savings account, as a short-term "credit" line to cover unexpected expenses until the next paycheck.
  • Goal Oriented Savings (ING) - $170.53 - The first of my biweekly $20 contributions went through today. Still no specific goals for this account, though I'd like to step up the contributions for the account and use this for our vacation this year.
  • Long-Term Savings (ING) - $0 - I still haven't started the emergency fund account yet, but this is going to be a priority for 2008.

Investments - $1,826.69

  • Primary Investments (Edward Jones) - $1,676.69 - I started $50 monthly contributions in November and will make the second monthly contribution on the 20th. I am also sending $150 on Monday, to bring the cash balance in the account to $250, the minimum to jumpstart my new fund. Progressing towards the downpayment for the house.
  • Prosper - I moved $150 to Prosper, the peer-to-peer lending service. I have my concerns about investing in personal loans for two reasons - the risk of default is small but nevertheless present, and Prosper does not currently offer any means of selling loans if I need cash in a hurry. However, the returns are promising and the default rate is only 3%.

Credit Cards - $21,520.00

  • Universal - $8,250.00 (1.99%) - Paid $125.22 today
  • Capital One - $0 !!!!!!!!!!!!!! Paid $577.67 today
  • Citi - $2,970.00 (10.24%) - Paid $56.24 today
  • USAA - $10,300 (11.65%) - This is the next debt to attack.

Other Debt - $9.948.68

  • Student Loan - $4,462.21 (6.97%)
  • Medical Debt - $5,486.47 (0%)

Net Worth - $27,629.07 (-)

Comparison:

12/3/07 - $27,994.99 (-)

10/1/07 - $30,175.92 (-)

Until Next Time,

Jonathan

Looking Ahead - 2008

As the end of 2007 draws nearer, I find myself thinking more and more about my New Year's Resolutions and my financial goals for 2008. While I haven't advanced far enough in my Personal Finance education to lock in any hard and fast dollar figures as goals, I do have some general concepts in mind:

  • Revisit my debt repayment strategy. Instead of making decent payments on each of the debts every month, it will save money in the long run to put any extra money towards the higher interest debts first and the minimum on everything else. I also need to get in the habit of using debt snowflakes every time I have extra money, rather than waiting to make a regular payment.
  • Stop using credit. If I had an emergency fund, I would strongly consider destroying all of my credit cards. As it is, I have destroyed or frozen all except one card, but I keep one handy since I have no reserve cash. For the longest time, I have used credit cards to float from paycheck to paycheck, with the best of intentions to pay it off right away. However, this rarely happens, leaving me with a credit balance from month to month and every purchase made on the card costs substantially more than it should as the interest accrues.
  • Take a vacation -- a really good, well deserved, vacation. I often sacrifice personal luxuries and comforts in favor of more aggressive debt repayment. With the proper planning, I think we can afford a nice, long, relaxing vacation without impacting our savings or debt repayment. Should I use that money for more debt repayment? Probably. But our mental health is as important as our financial help.

That's the plan ...

Jonathan

Monday, December 10, 2007

The Car is No More

I got some very bad news on Friday - something went horribly wrong in the engine of my 1998 Chevy Cavalier, and it will take at least $1500 to fix it, in the best case scenario. The Blue Book value of the car, if it was in "Fair" condition is $1900, but to call it Fair is a stretch, and that's only if it still worked. To add insult to injury, I just invested $600 in new front wheel bearings and brakes two months ago.

For the next couple of months, my wife and I will have to share her car. It isn't a huge inconvenience, since we both work similar schedules and we were carpooling two days each week anyway, but it will make it difficult for us each to take care of personal errands without a good deal of advanced planning.

I haven't decided how to handle the replacement cost yet, nor have I invested much thought in the replacement vehicle either. I know this much so far: definitely not new, definitely searching for the lowest price while maintaining a modicum of reliability, and definitely want to pay cash for it. Unfortunately, I haven't gotten too far into building our savings.

I had planned to put our tax refund towards debt and a mini-vacation, but it looks like I will be using it towards the car. The other possibility, which depends largely on how the carpooling works, is to hold off on the purchase of a new car for a while, save some more money, and take more time to hunt for the right deal.

Until next time,
Jonathan

a.k.a. Debt Magnet - I just seem to attract it.

Thursday, December 6, 2007

Foiled - Car Trouble

In The Plan: Savings, I wrote that I was going to wait a while before I start building our "Long-Term Emergency Fund." I mistakenly considered that Emergency Fund a buffer against lost income. Had I been paying more attention, I would have seen the value in that Emergency Fund as a buffer against unexpected expenses that overwhealm our budget.

One unexpected expense jumped into our financial picture today. I was driving from Albany to West Hartford, CT to spend a couple of days at my Reserve Unit tidying up some issues before I transfer to a new unit. As I was clearing the toll plaza in Canaan, the last toll plaza in New York before crossing onto the Mass Turnpike, my car just stopped. Luckily, the tow back to Schodack didn't set me back a dime, thanks to the AAA. I am waiting for a call on the extent of the damages.

I need to revisit our savings plan, so I can start building that Emergency Fund. As of this last paycheck, our Short-Term Emergency Fund sits at $300.41, just a couple of months away from the $500 goal. Once I hit that goal, I will shift that contribution to the Long-Term Emergency Fund.

Until next time,
Jonathan


From My Blogroll:

Karen Datko gives a simple approach to budgeting at MSN Money's Smart Spending (originally posted at The Dough Roller).

Shannon Christman talks about insulting advertising at SavingsAdvice.Com. I have to say, I agree with her assessment.

Tuesday, December 4, 2007

The Plan: Live Frugally

In Our Feelings on Spending, Debt, and Budgets, I outlined the four main categories of our financial planning: establish savings, pay off debt, live frugally, and get real about the future. Since then, I've gone into more depth about savings, to include retirement planning, and debt reduction, but I haven't talked much about my ideas on frugal living.


I don't have too many ideas on frugal living, since I really haven't been living frugally. As I've said before, that is the biggest reason that I carry so much debt. Over the last year, it has become increasingly apparent that we need to plug some of the leaks in our spending, save where we can, and generally make better financial decisions. My lack of experience in budgeting and frugal living makes that quite the challenge.

The biggest struggle we face in forming a budget is finding the right balance between reducing expenses and still having enough "fun" money. In forming the budget, I am keeping three key factors in mind: flexibility, simplicity, and reality.

Flexibility - If the budget drills down to the last penny, it is doomed to fail. There needs to be enough room within the budget categories and within the budget itself to allow for unexpected rate increases, changing needs, etc. In addition, if the budget is too tight, one small expense that runs over budget throws the entire budget off balance.

Simplicity - If we can't figure out the budget, track the expenses, and know when we're reaching the upper limit of a budget category, it can't possibly work. To have too many categories, too many moving parts, or too much money shifting from category to category will result in failure. We may consider switching back to cash for our living expenses, instead of the debit cards, so we can track our spending by putting designated amounts in different envelopes. However, that introduces its own challenges and requires the discipline not to spend the cash out of category.

Reality - If the budget doesn't allocate enough money for certain things, it is doomed to fail. For example, expecting to buy enough groceries for the two of us for $25/week is unrealistic. Expecting to fuel both cars for two weeks on $20 is a joke. There needs to be enough money in each category to comfortably cover the expenses - and this is the biggest challenge we are facing.

Where does frugality enter into this conversation?

I want a budget that offers flexibility, simplicity, and reality. All three of these goals require one thing -- enough money. For the budget to be flexible, there needs to be enough money to go around. For it to be simple, there can't be a lot of moving money from one category to another to compensate for overspending -- there needs to be more money. For the budget to be realistic, there needs to be enough money to comfortably cover all of our expenses, and then some.

In order for the budget to succeed, we need to minimize our expenses wherever possible. I do not want to pinch pennies, but I know there are many ways we can reduce expenses with minimal work on our part. I've gotten many good ideas from other blogs, and I plan to throw them up here as time allows.

So, my Live Frugally plan is still pretty vague.

Until next time,
Jonathan

Monday, December 3, 2007

Debt and Savings Update 2007 #1

I am trying to decide what format is best for providing financial updates. Between my wife and I, we have three checking accounts, two savings accounts, an investment account, four credit cards, one student loan, one healthcare loan, one miscellaneous debt account, and one car loan. To post the entire list every couple of weeks would take a great deal of time and, frankly, nobody really cares about the specifics.

I thought about posting every detail about our recurring monthly expenses, but instead I will only post information about those if there is a change from the norm. As for balances, I will only post the balances that have changed.

So, here is Debt and Savings Update 2007 #1 - 12/3/2007

Checking - $2,120.99

My Checking (USAA) - $87.45 - Usually right after pay day I have about $100-150 remaining for two weeks worth of personal expenses. I drove to Mass. this past weekend for military training, and with the price of gas it hit hard. I need to drive to CT this coming weekend for more training, and may have to dip into the short-term savings to pay for the gas. I will pick up a couple extra days of pay for the training, so it will not be hard to refund the savings account.

Her Checking (KeyBank) - $89.99 - Again, right after pay day Jen should have $100-200 remaining for the two weeks. However, her friend had a baby shower over the weekend that Jen contributed to both the planning and financing of, which took its toll on the balance. She also bought cat food over the weekend, which actually comes out of the grocery budget, so I'll end up transferring that money back to her checking account once we're done with the grocery shopping. If she is careful with the next two weeks, though, she should be able to make it through.

Billpay Checking (USAA) - $1,943.55 - This is right about where it should be. After all of the scheduled payments, there is about $47 extra in the account. Once I am certain that money is clear, it will go towards the credit cards.

Savings - $450.94

Short Term Savings (USAA) - $300.41 - I moved $50 from the last paycheck into the Short Term Savings account, the low yield account destined to bail us out when we underestimate our expenses between paychecks. The goal is to reach $500, which should be right after the first of the year.

Goal Oriented Savings (ING) - $150.53 - The high yield account will start its automatic funding on 12/14, at $20 per paycheck. Any extra money after expenses will be split between debt snowflakes and goal oriented savings. We still don't have any goals established for this money, but I'm leaning towards a few days of R&R this spring.

Investments - $1,770.12

I have had one investment account, we'll call it "Primary," since my grandmother started it as my graduation present. She continues to add to it for birthdays and gifts for other occasions -- probably the best gift anyone has given me. Starting in November, $50 each month will automatically transfer, to start to build the account so that, one day, it will fund the downpayment on a house. I haven't done the math yet, but $50 per month over five years is $3000 invested, and the fund's 5-year average return is 15.33%. It won't be the entire downpayment, unless I can up the $50/month contribution substantially, but it should take care of some of it.

I recently opened a second investment account at Sharebuilder, and I was planning on using it to diversify my investments a little. There is $100 sitting in their money market account waiting to be invested, but I've been second guessing that move. I think it would make more sense just to send the money from Sharebuilder to the other investment account. Still working on this one.

Credit Cards - $22,297.03

Broken down, it is:
Universal - $8,360.00 @ 1.99% - Paid $136.52 today.
Capital One - $435.00 @ 15.40%
CitiSimplicity - $3,000.00 @ 10.24% - Paid $185.98 today.
USAA - $10,502.03 @ 11.65%

This week, $202.03 is posting to the USAA account, bringing it down to $10,300.00. The balance on the cards continues to drop, though not as fast as I would like it to.

Other Debt - $10,098.68

Student Loan - $4,462.21 (6.97%) - Making the standard payments. ($70.00)

Medical Debt - $5,636.47 (0%) - This is actually a composite of several major accounts, one healthcare finance account and a collection of what started as six medical bills that we are making payments on.

The healthcare finance account was going to pay for Jen to get braces, before she decided that she really didn't need/want them. The balance remains for now, but the orthodontist is supposed to be refunding the money to the creditor soon.

We started with six medical bills last year, totalling $3,995.00, and we've knocked it down to three bills remaining for $2,005.13. We are scheduled to pay $150 monthly, but I usually try to put in a little extra.

12/3/2007 Net Worth - $27,994.99 (-)

Comparison:
10/2007 Net Worth - $30,175.92 (-)


That's my update for now - I'm still working on the format and the "right" amount of information to put with each update.

Until next time,
Jonathan

Friday, November 30, 2007

The Plan: Debt Reduction

The Problem

I have always been a math and science person. In elementary school, I participated in a special program for math and science that exposed us to lessons two to three grade levels beyond our class. In high school, I participated in every extra-curricular activity geared towards math and science, including robotics competitions, math clubs, engineering clubs -- ok, I was a geek. My degree is in Biomedical Engineering with a concentration in mechanics and a minor in Psychology, with a huge number of complicated sounding math and science courses under my belt.

With all of that math and science background, and what tends to be a very analytical mind, why, then, would I dig myself in to debt like I did, knowing fully the extent of the debt versus my income and the effects of compounding interest?

I started with my first credit card my freshman year of college. I did well with the card for the first year or so, before I carried my first balance. It got worse from there, and through the next three years or so I consistently carried a balance. Some time later, I got serious about the debt and paid it down. Then I ran it up again. Then I paid it down. Then up. Then I opened a second credit card account, and ran that up too. Eventually, I ran the debt up to where I felt uncomfortable, so I took out a personal line of credit to consolidate both cards under a more structured payment plan. Then I ran the credit cards up again.

Hindsight being what it is, I think I had a problem with impuse buying. Two or three years ago, I realized that I was stuck in a cycle that I had to break before I dug myself deeper. I can attribute most of that epiphany to meeting my wife, growing up a little, and looking forward in my life's timeline at the bleak picture of my financial future that I was painting.

The Solution

Spend Less Than We Earn

The first step in the resolution of my credit card problem is to stop making more debt. I mentioned in a previous post that we have been doing much better for the last year - our overall income exceeds our overall expenses and we've made some progress towards the debt. Even so, there were many times where we underestimate our expenses between paychecks and had to resort to the plastic to hold us over. We've been good about using the credit cards only for "needs," but typically the only reason we had to resort to the card was because we spent too much on "wants. I still consider it an unnecesary use of the credit card.

Avoid Temptation

To counter the temptation to break out the plastic in the face of every "irrestible" deal, special, sale, or bargain, I destroyed my two high-balance cards and froze my low-balance card in the freezer. My wife still has her card in her wallet, but I'm trying to convince her to freeze hers too. For those unfamiliar with the strategy of freezing the card in a block of ice, I still have access to the card in case of an emergency, but in order to use it I have to anticipate it, take it out of the freezer, and set it out to thaw. If I am about to make an impulse purchase, the hope is that by the time the card thaws, the impulse will have passed.

Reduce The Debt

Putting the breaks on adding to the debt is half the battle to reducing it. The second weapon in the war on debt is to make payments. There are many schools of thought on how to pay off credit card debt. Mathematically, to spend the least on interest while reducing the balance the fastest, the best strategy is to pay the minimum payment on all debts and maximize the payment on the highest interest card first. Psychologically, making the same payment to the card with the smallest balance is more noticable and satisfying. I decided on a plan somewhere in the middle.

The Plan

I think I have a touch of OCD when it comes to the card payments, and I like to make payments that leave the balance as a nice round number. For example, if the balance is $10,502.03, and the minimum payment is $180, I will pay $202.03. That being said, the plan is to pay higher interest rates any excess funds, and pay the "minimum" payment as described above. I won't be able to work out how much I will be paying every month, though, until I figure out what impact the 401(k) contributions, automatic savings, and changing health insurance will have on my take-home pay.

So, once I work it out, I'll post more details of the plan.
Until then,
Jonathan

Thursday, November 29, 2007

The Plan: Savings

Overview

I've mentioned in previous posts that I am still developing a plan, working out the budget, finding the right balance between repaying debt, building savings, and still having enough left over for here-and-now spending. I have spent a good deal of time in the past year evaluating my own behaviors, and I know that without some intervention, any money left over after paying the bills will go to here-and-now spending at the expense of any savings whatsoever.

I never realized the impact our lack of savings had until recently when I started looking back on the last 12 months of Quicken records. I found a pattern that repeats itself many times - paycheck comes in, bills go out, and I'm getting good at sending most of the balance towards the debt and holding back a small amount for us. What keeps happening, though, as the next paycheck draws nearer, something comes up that exceeds my cash on hand and we put it on the credit card with the good intent to "pay it off as soon as we get paid." The problem, though, is that my next credit card payment goes mostly towards the recent expense and does nothing for reducing the overall debt.

To counteract this pattern, build a larger emergency fund, and lay the framework for goal-oriented savings fund, I developed the first version of our Savings Plan. I established four basic savings categories:

- Short-term "float to the next paycheck" funds, to cover the small unexpected expenses that used to crowd my credit card statement.

- Short-term and Long-term goal funds, to save for future big-ticket items such as vacations, furniture, or "other." A not so short-term goal is the downpayment for a house, also in this category.

- Long-term Emergency Fund, should the worst happen, to cover three to six months of living expenses in the event of catastrophe.

- Financial Future fund, i.e. Retirement.

Short-term "Float to the next Paycheck" Funds

Over the last year, our overall spending has been less than our overall income, and our overall debt balance has gone down. About once a month, though, we're charging expenses that we shouldn't be, and this fund is designed to limit that.

I have a low-yield savings account with the same bank as my checking account, USAA, which offers the convenience of same-day transfers between them. I want to minimally fund this account to cover those unexpected expenses that I know I can cover out of the next paycheck, while not leaving too much cash at a low interest rate. I also know if the money is there than so is the temptation to spend it, so I don't want too much on hand.

Short Term Funds - Goal: $500.00
Short Term Funds - Current: $247.01
Short Term Funds - Method: Initial funding will be $50 per paycheck until the target balance is reached. After that, funding will be the maximum "residual" from each paycheck as needed to maintain the target balance.

Short-term and Long-term Goal Funds

The sad truth about our financial situation, to this point, is our tendency to be impulse oriented on big-ticket items are concerned. We decide on a big purchase, research the best price, and buy it on credit. Although we have always stayed within our means, technically, on the payments - i.e. we have never missed a payment in the three years we've been handling our finances together, it doesn't do much to research the best price only to pay more in interest.

For the Short and Long Term Goal Savings, I setup the Automatic Savings feature at ING Direct to transfer money from the Billpay account biweekly. That transfer is small right now, since debt-repayment is our biggest savings priority. Different portions of those deposits will fall into different sub-categories, depending on our savings priorities.

I also have an investment account that is automatically funded every month for the long-term goal funds. It tends to have a higher return rate over the long-term but it fluctuates more. Our plan to purchase a house is dependent upon eliminating our consumer debt, which will likely take at least five years. Once the consumer debt is eliminated, we can evaluate the state of the funds and, if necessary, wait for a shift in the returns. Although there is still some risk that the return will take a turn for the worse, the flexibility in timing will hopefully counter that.

Short-term and Long-term Goal Funds - Goal: TBD
Short-term and Long-term Goal Funds - Current (ING): $150.02
Short-term and Long-term Goal Funds - Current (Inv.): $1,659.60
Short-term and Long-term Goal Funds - Method: ING is setup to take $20 biweekly. The investment account is setup to take $50 per month. I make seven payments every month towards our debt, and as each debt is paid, the payments will be increased on the remaining debts. However, I think after every other payment is eliminated, I will split the balance of that payment between goal savings and the remaining payment.

Long-term Emergency Fund

I don't usually like to think about worst-case scenarios, but should the worst happen, we need to be prepared. Most personal finance authors seem to be in agreement that having three to six months of living expenses in the emergency fund is reasonable. Since predicting catastrophe is quite difficult, the risk that our investments will dive right before catastrophe strikes is a great concern, so ING Direct wins this one. A second ING account will eventually be the Emergency Fund.

As far as the rate of building the emergency fund, I've decided to hold off on building this rapidly for now, and focus the money instead on reducing our living expenses through debt-reduction, since debt payments are our biggest expense right now. There are two reasons behind this decision: First, we work in an industry that is always short-staffed, and should either of us lose our current employment, I already know of several employers where we have a standing offer. Second, in the event of accident or illness, our disability insurance will cover the same three to six months of income that the fund will. Eventually, the fund will take the place of the accident and illness disability, thus eliminating the monthly premiums, but for now the interest on the debts exceeds the premium amount, so our greatest payoff is reducing the debt.

Long-term Emergency Fund - Goal: $10,000.00
Long-term Emergency Fund - Current: $0.00
Long-term Emergency Fund - Method: Eventually, automatic transfers will fund the account biweekly, but not until a few of the debt payments are eliminated. The plan now is after three debt payments are eliminated, a portion of those payments will be directed here.

Financial Future Fund

Also known as retirement, the finanical future fund is in its earliest stages of development. I submitted the paperwork to enroll in my company's 401(k) plan this month, so starting January 1 it starts to grow. My company matches 50% of my contributions, up to a total employer contribution of $1000, so for the first year I am going to maximize their contribution.

Financial Future Fund - Goal: Maximize
Financial Future Fund - Current: $0.00
Financial Future Fund - Method: Automatic pre-tax contributions at $77.00 biweekly, with the employer match at 50%, for a total of $115.46 biweekly or $3002.00 annually. As with the rest of the savings plan, I want to push this contribution up as the debt payments go down.

The Principles of the Savings Plan

1) Save the money before we miss the money - By transferring money to savings before it even figures into the account balances, we are less likely even to realize that the money is gone.

2) Redistribute the money before we miss the money - As debts are paid off, that payment will be immediately added to the remaining debt payments, and periodically added to the savings transfers, and never added to our here-and-now spending budget.

3) Frequently evaluate the balance of the plan - Finding the right balance between debt payments, savings, and here-and how spending will take a while. For the first couple of months, we will most likely be reviewing our contributions biweekly to make sure we are still moving towards our goals.

Until next time,
Jonathan

Tuesday, November 27, 2007

Our feelings on spending, debt, and budgets.

Our Financial Childhood

My wife and I butt heads occasionally on money matters. They are usually small, inevitable differences in opinion about how much of our income should go to savings, debt-repayment, and here-and-now spending. I tend to pull towards debt-repayment and savings, while she wants to enjoy the fruits of her labor now.

There is a middle ground, where we can continue to make progress on the debt, stash some extra money away in savings, and still have some money left over for entertainment and other material luxuries. Since our wedding last year, we have swung back and forth around that happy medium. Some months we do very well with savings and debt-repayment, but do nothing for fun, while other months we spend a little more than we should.

Our Finances: An Update

I've been picking away slowly at debt for a long time. Getting married last year was a wakeup call of sorts, and its time to get organized, get a plan, and get into a more comfortable position with our money. For our plan to be successful, it needs to satisfy three key elements: it must be flexible, it must be achievable, and it must meet both of our needs. Here are the major steps in our plan, and I'll write more about each step in future installments.

The Plan

1) Establish savings - in the last year, for every month we make substantial progress on debt and savings, we have another month that sets us back with an unexpected (and sometimes expected but not anticipated) expense.

2) Pay off Debt - ok, that goes without saying. With better planning, I want to figure out how much we can reasonably afford to pay towards debt every month, decide on an order for the payments, and snowball and snowflake until its gone. With the bolstered savings plan, we won't have to resort to credit in the face of unplanned expenses.

3) Live Frugally - This one is somewhat vague, and this is where the balance really comes into play. If I invest hours each week researching the best price for groceries and nit-picking at every little expense, I have accomplished nothing. However, I am always looking for ways to trim expenses.

4) Get Real About the Future - I am 27, have no savings and no retirement. I should have, could have, and wish I had started earlier. It makes no sense to cry about it now, but it is time to start planning.

The Progress

I setup some automatic transfers to start moving money into our long-term savings and investment accounts before we even realize it is there. Starting in December, each month I will put $100 into low and moderate risk investments and $40 into Long-term savings. Eventually, I want to increase those amounts, but I want to clear up a couple of credit accounts first.

December is Open Enrollment at work, and I have all of the paperwork for the 401(k) and Flexible Spending Account. Our company matches 50% of 401(k) contributions up to $1000. I plan to maximize their contributions by investing $2000/year ($77/paycheck) for this year. I figure on about $2200 in medical expenses annually, including glasses and contacts, co-pays, and OTC products, so there's another $85/paycheck.

With the automatic savings, 401(k), and FSA setup, I just cut our bi-weekly income by about $200, once you consider the decrease in withholding. Now, I need to sit down with the wife and review our expenses, look at our debts, and get our budget on paper for the first of the year.

Until next time,
Jonathan

Monday, November 26, 2007

Getting started on the quest

I have not made any specific "get out of debt" goals yet -- I am still trying to find the balance of debt repayment versus living comfortably and enjoying life. While I try to find that balance, here is the lay of the land to get the quest started - this should be current as of December 1, 2007:

About Us
We are recently married, September 2006, and still feeling out our financial values. I ran up quite a bit of debt during college, and she has some debt from old medical bills she incurred while uninsured. We both work for an Ambulance Service, so we spend a great deal of time every day on the road, yielding some rather essential "extra" expenses - dining on the road and cell phones are at the top of that list.

We are both hourly employees, paid biweekly, myself a manager and my wife a "blue collar" employee. I am also a reservist, which generates some handy extra income. Since I make about twice as much annually, I usually figure on one-third/two-thirds when paying the monthly bills and each of our "fair" contributions to the joint expenses.

-----------------------------------------------------------------------------------------------
Our financial summary as of December 1, 2007

My Checking (USAA Bank) - $190.08
Her Checking (KeyBank) - $43.84
Billpay Checking (USAA Bank) - $713.82

Primary Savings (USAA Bank) - $247.01
Long-Term Savings (ING) - $150.02

Universal Card - $8,496.52 (4.0% until paid) - Cards destroyed.
Capital One Card - $435.00 (15.4%)
Citi Card - $3,185.98 (10.24%) - Card frozen in large block of ice.
US Card - $10,502.03 (11.65%) - Cards destroyed.

Investment Account - $1,628.04

Car Loan - $15,855.47 (7.4%) - Asset valued at approximately the same.
School Loan - $4,499.81 (6.97%)

Misc Debt - $5,755.13 (0% until 12/2008)

Current Net Worth = -$29,842.99
------------------------------------------------------------------------------------------------

So, the picture is not a bright one. The credit cards are a problem, the lack of savings is not good, and the interest is rediculous. Luckily, I never have a problem meeting the monthly payments - just in hammering down the principle.

Over the next week, I will outline my current plans and goals for each category. I hope to post once every couple of days, to include progress reports, new ideas that I'm trying, and other personal finance tidbits that I pickup along the way.

Until next time,
Jonathan

Sunday, November 25, 2007

Changing Directions

Trying to earn money doing surveys does work - I have a $30 check coming from InboxDollars for many nights of surveys and following advertising links. However, the payoff really isn't worth the time spent trying to hit that $30 threshhold. It is, however, $30 more than I had and will make a nice snowflake for my credit card debt.

So, the making money on the internet idea really isn't paying off for me - too much time, not enough return. I'm far better off spending that extra time at night with my wife.

I am shifting the direction of the blog and using it to log our progress towards becomming debt free. A few words on my debt-reduction philosophy - everything is about balance. Yes, I could live uber-frugally and pay off the debt faster, but at what cost. Instead, I plan to reduce the debt at the fastest pace possible while still enjoying a comfortable life. Through smart decisions, I think I can reduce the debt at a reasonable pace but still enjoy some luxury.

I need to review my budget and accounts this month anyway so I can setup my 401(k) and FSA, so my first post about My Debt Quest should be ready in the next week or so.

Things to look forward to with this blog:
- Frugal ideas that don't sacrifice personal comfort.
- My personal thoughts on money and debt.
- Links to other personal finance blogs that share my ideas and values.

Until then,
Jonathan

Sunday, September 30, 2007

Not really working here ...

Across the seven or so survey sites that I am now a member, I'm making some progress. Inboxdollars is at $17, SendEarnings is at $13, but it takes more of a committment to make any real progress. I suppose if I had the time each day for the daily surveys, it would move along faster, but my wife is not a big fan of me sitting on the computer all night doing surveys.

Ah well, I'll keep trying.

Sunday, September 16, 2007

Surveys Take Time

My inbox is full of spam, as I expected -- I'm glad I setup a new email address just for this stuff. I do get a small handfull of "Paid Emails" from Inboxdollars and Sendearnings every day, worth a couple of cents each just for viewing the advertisements. Some of the spam emails are actually somewhat interesting -- they're advertisements, but they have good information about eating healthy and finding coupons.

The surveys at Inboxdollars and Sendearnings don't take too long to do, but I can only do one per day at $1.00 each. I've made about $12 on each site in the past week, so as long as they don't pull a fast one, I should be able to hit the $30 payment threshhold in about one month. Making $60 per month just for doing surveys and looking at ads isn't such a bad deal. We'll see if it works.

More to come later.

Tuesday, September 11, 2007

Starting the Blog

I cannot take credit for the idea behind this blog - I found http://iwanttobehomewithmykids.blogspot.com/ while surfing the web and really liked the idea. I am convinced that the plethora of websites dedicated to "earning money" by taking surveys are a hoax, but reading the blogs at this site have given me a glimmer of hope. I don't think I'll be getting rich doing the surveys, but a couple of extra dollars couldn't hurt.

I'm going to use this blog to post about my progress -- perhaps, if it does work, it will give you an idea of where to start.

My start:
I created a new email address at yahoo, jogr1980, specifically for the survey and advertising sites. I don't need to fill up my personal inbox with the abundance of spam that I'm expecting once I blast my email address across the internet.

To get a start with the surveys, I setup accounts at InboxDollars and SendEarnings, and from there I've been directed to many other sites. I'll include links to all of these sites on this blog.

Well, I'm off to do more surveys.
Jonathan

Business & Personal Loans. Great Rates. Prosper.