Thursday, November 30, 2006

Holiday Budget

Unfortunately, this year I feel a little bit under-prepared for the upcoming holiday season. I am still managing to generate some extra income so I am not so concerned about spending a decent amount. However, the problem is that I cannot figure out exactly what is "decent". I need to buy presents for a fairly short list of people, but I would really like things to be nice and well-thought-out.

I generally try to make it easy for people to shop for me by creating/updating my amazon wish-list as my birthday and christmas roll-around. I encourage people to buy used items from reputable sellers because I have had very good experience with that before. For music, books, and dvds, it doesn't matter to me if they are used as long as they work. However, depending on the person, the might consider getting a "used" gift to be tacky. So I would check with people beforehand. I generally like it because that means I will get more of the stuff that I want rather than just one brand new item.

Next Friday will be the big test for me though; I have to buy most of the gifts at that point. My mom and I do a yearly shopping trip where I take the day off from work and we head out to a local mall. I like it because it is a great way to spend time with my mom and also for us to co-ordinate on bigger gifts for people in our family if we are doing a chip-in sort of thing. I wonder if my 300 dollars will be enough? How much do other people spend?

Tuesday, November 21, 2006

Estimating Taxes

As I get ready to wrap up another year, it seems there's always more financial work to do. Not long ago I went through my seasonal save-it, pitch-it fight with all the old bank statements, paperwork etc. However, I am realizing that the real interesting thing for me right now is getting ready for tax time and figuring out how much of a refund I will likely get.

I know that I am going to get some flack for this but I have extra tax taken out of my check each pay period. Mostly, I do this to make sure that I never underpay my taxes. The other nice feature about this is that it provides some built-in buffer against my side income so that I am not whacked with a large amount of money in tax at the end of the year. This little extra kick in each regular paycheck means that I can generally use the side income as I see fit throughout the year.

So now I am in the process of divvying up my expenses and such for the year into categories and getting ready to start filling out the forms once the W-2s come in January. Has anyone else started the tax season prep-work or am I the only one?

Friday, November 17, 2006

Changing Behavior Isn't Easy

A few weeks back, there was a short article on InvestorGeeks about "Why the Poor will Always Be With Us". I found the article thought-provoking, but the point made by <a href="">Jason</a> was particularly interesting.

Jason Commented:

<begin comments>

I'm thinking of my father, who in 2001 bought a brand new Jeep Grand Cherokee because he "needed something to make him happy". It didn't matter that a lot of what made him unhappy were financial problems, which the extra $20k he paid for that car vs. a comparable used car would have helped him out with.

I'm thinking of the guy you know who lives in assisted housing but has a more jewelry than you do and better stereo system than you do.

If either one of the people in the above scenarios had $30k in a "retirement account" they could gain access to, they would find a reason to spend it. The money feels idle and psychologically these people enjoy the scenarios and stories they get themselves into as "broke" people. They've been broke all their lives. They're used to it. They're comfortable with the idea in the same way a battered wife is comfortable. If they had money, they would feel bad for all of their broke friends. If they had money, they would have nothing to talk about anymore because a lot of their discussion revolve around their lack of money.

<end comments>

Personally, my personal experience in life has shown me that this is true for some people; often times with people I am very close to. I don't think that there is any magic wand that can be waved to change people's behavior.

Some people, in fact, when pressed about their lack of motivation to make positive changes in their lives will get very defensive. I find this to be upsetting and inevitably generates a rift between you and the other person.

Similar to other issues which can have psychological roots, our treatment of money can become addictive. We can become addicted to trading, or investing. We can become addicted to becoming apathetic and lazy about our money. Behavior is repeated over and over and over again for most people.

I've recently applied the idea that I cannot force anyone to change to financial matters. However, by blogging and being up-front about what I am doing in my own finances, I have become more confident. And naturally it has helped people around me to start investigating their own finances and ask questions and get advice.

I don't think its about being right or wrong. Rather, it is about taking control and being responsible for the outcome of your actions (or lack thereof). Once we make conscious choices, we can be confident that they were the right ones and become content and satisfied. It's when we don't focus on finances that problems start surfacing.

Do Something Nice, For Free and very little Effort

Does everyone remember any childhood trips away from home? I remember going away to camp and feeling a little bit sad and lonely when other campers would get mail to open and whatnot. The same is true for college when you feel like you are far from home and days on end go by without hearing from loved ones.
Xerox has captured this feeling/idea and put it to work to benefit soldiers in Iraq. Regardless of how you feel about the war, I think it is a great way to do a little something that doesn't cost anything but a moment of your time. It is a site where you can add your name, town, and message and Xerox will copy a card designed by a child and include your message and send it to a soldier in Iraq. And it is free.
Go to <a href="">lets say</a> to fill one out.

Thursday, November 16, 2006

1000 Dollars of Free Life Insurance

I just got a mailer from my bank that I was being offered 1000 dollars of free life insurance. The option, of course, is available for me to get more if I would like, all the way up to 300,000 dollars with no medical exam. Unfortunately, the costs are prohibitive so I do not want to do that at this time. Plus I am covered by my work policy and an additional add-on policy that gives me another 10000 dollars in coverage. The standard stuff applies to both policies in terms of accidental death and dismemberment. Quite a morbid clause really, but I guess it is better than being out of luck if you lose a limb.

So, after reading all of the paperwork, I feel comfortable that I can go ahead and send it in which is what I plan to do this weekend. I have to wonder though, did they get my name through the gold card that I recently got? Why all the sudden show of generosity from my bank?

Wednesday, November 15, 2006

Free AAA?

So, not too long ago, I was at the sporting goods store and I went up to pay for my purchases. Nothing terribly exciting really, except that when I got up to the counter and swiped my card it was denied. I of course tried again to no avail when I realized that my debit card was expired. I was not terribly happy about that because I it put me off and I had to use a different card. However, life went on and after a nice dinner and a beer, it didn't seem to matter much.

The next day, I called my bank to ask about getting a replacement card. They claimed they had already sent me one, which I never saw so they promptly offered to send another one, free of charge. Also, they would upgrade me to a "gold card". I thought, gold card? I don't want any credit junk here. They said it was still just an ATM card, but that it had additional services like AAA (Mastercard's version of roadside assistance). I thought that was great since it was free. However, I am now hard pressed to figure out how other people become eligible and exactly what services this includes. Some web searches seem to indicate that this is a service that provides basic AAA type assistance, but at a flat/reduced rate. Is that the case? Has anyone else ever used this who could provide some insight about how it works?

Sunday, November 12, 2006

IKEA was great! Christmas Shopping Has Begun!

On saturday, I went to IKEA in stoughton, MA and it was very different than I expected. It had a european feel, which is to be expected from the Swedish Home Furnishing's Store given their roots. However, I was also impressed with the prices. They were relatively affordable, even for someone who doesn't have tons of money. Unfortunately, though there was not much that was really ideal for my home because the stuff is definitely not at the same level of quality; but I wish that I had known about it when I first graduated college.

It is a great place to go if you want to decorate stylishly and then redecorate every 5 or so years....
Or you are on a budget and cannot afford to pay lots of money for furniture....
Or you know that you are going to have to setup house in a very small apartment or rooms (since much of their furniture is scaled down).

On the plus side, I bought several items that were only a dollar and it was fun because I got some christmas shopping done since I know that people in my family will not have gone there yet. Best part? The gift was inexpensive.

Friday, November 10, 2006

Wal Mart Acts Fast!

Well, I just recieved a comment from someone from walmart apparently which indicates that they are working to remove the articles from their stores that are offensive; refer to the previous post to get more information. However, I think that this is an excellent first step and I am glad that they appear to be taking this so seriously.

Walmart Selling Nazi Clothing?

I just came across this article and thought I would share. I think it is definitely worth reading and then doing some research on. I don't know enough to know if it is untrue or not. Clearly, I am not an expert on these matters, but the <a href="">implication that Wal-Mart is unknowingly selling clothing that perpetuates nazi thinking/neo-nazi stuff</a> is kind of scary from a stock-holder point of view. Again, just check out the article yourself and then make your own decision after you do some research. I'm glad I don't own any shares though. I would not want to have my money in a company that is getting this kind of negative publicity.

Transportation Costs Skyrocket

Personally, I spend just over 650 dollars per month just in transportation costs; this includes my car payment, insurance, fuel, and my commuter rail pass for taking the public transportation. However, yesterday it was announced that my commuter rail pass was going to increase by 22 percent and that there were likely more increases coming. For me, this puts my transportation costs at over 700 dollars per month. This is about a quarter of my entire net pay each month. This is absolutely insane!

I am looking forward to eventually being done with my car payment and I am going to now look into reducing my car insurance bill to try to offset the increase. However, as much as I am concerned about my own wallet, I am also concerned about the social implications. This change will result in approximately 11.9 million fewer riders of the mass transit system which will mean more pollution and increased emissions contributing to global warming. This is a real concern. Furthermore, the poorer you are, the more this level of increase hurts you. It pinches my wallet and I am making ok money. I cannot even imagine how the poorest people feel when this happens to them. How do you survive?

By letting people keep less and less money that they work for, we are increasingly encouraging people to be lazy in society. It is not a good trend. Furthermore, I genuinely feel that the increase is too much. Some of this money should be handled by better negotiations and/or better management. Not to mention the fact that there should be some taxes contributing to the system. The convenience of having transportation makes business possible for the economy and nearly everyone benefits. The complete burden should not be put on those who are riding the system. I barely use the roads, but I still have to pay my full share of tax dollars to keep them up. The same standard should apply to mass transit.

Thursday, November 09, 2006

Robbing Peter to Pay Paul

There's an expression "Robbing Peter to Pay Paul" that we have in the english language. One of my majors in college was Spanish and my favorite part of the language is the fun idioms that there are. Its no different in English. In fact, I think that some of them are even funnier in your native tongue because you can really get all of the implications.

Anyway, I have a loan that I've successfully paid down to about 6500 bucks; it was a student loan from college but it doesn't fall into that nice stafford loan category. So, instead, I am stuck paying on it monthly and there's no tax deduction for the interest being paid. Recently, the interest rate (which is variable - don't ask me why) shot up to 8.5%. That was the final straw for me; I knew that I could get a 0% interest credit card offer and save myself gobs of cash, albeit by taking a small ding on my credit score.

However, after a month or two of contemplating, I finally got an offer from the Credit Card I just paid off; 0% for 6 months. So I bit and now I am saving myself a ton of interest, but I know that I will have to do a balance transfer again since there is no way to get all of that paid off in time, but in the next 6 months or so, I will save myself a few hundred bucks in interest, even with the balance transfer fee. Score!

Sunday, November 05, 2006

I had "The Talk" with my Mom

Whenever you think of the talk, you think of safe sex right? The birds and the bees? Well, when it comes to personal finance and talking to your parents, the talk is when you talk about how they plan to handle the difficult stuff like what to do when they retire and all of that.

Yesterday, I gave my mom a call and she was not busy and thought it would be a good idea for me to come over and we would talk about "money stuff". So, when I got over there I was totally impressed.

Without even asking, she had written out exactly what her income and expenses were. She had a paystub to show me what she is currently contributing to savings and retirement accounts and was quite at-ease about the whole thing. This made me very happy and comfortable because I know that despite some of the debt hurdles and other issues she is facing, there is a reasonable plan to deal with them.

We talked about how she would handle her debt and also discussed a couple of small steps for her to do. Next time when I visit her to discuss this stuff in a couple of months, we are going to start working on getting her setup to pay bills online and such. I love online bill pay and I think that now that she realizes how much of a pain it can be to write out checks, she is more interested in doing that.

It matters to you. If there is anything that you can do for yourself it is this: discuss these issues with the people you care about. If they are older, especially if you might end up being some kind of caregiver, it is extremely important. Bills and expenses for a parent or loved one can be difficult to absorb if you haven't planned for them. Having "the talk" can help you remove any surprises way before they become a factor.

Saturday, November 04, 2006

100 dollar bonus

Well, a big project just wrapped up at work and I was super busy doing all of the work for close to a month. So, on friday, my boss came by with a small bonus giftcheque. It was a really nice touch and made me feel good that all of my hard work hadn't gone unnoticed.

After a little bit of thinking I decided that it would be mad money. I have been doing really well lately and I'm continuing to save and pay down debts etc, but once in a while, I think it is really good to keep some perspective and really enjoy yourself. This little unexpected bonus was just the right way to do it.

So, I went to see my cousin later that day and we splurged at Starbucks. It was a fun time and a nice way to spend some of it and a nice way to start the weekend.

Friday, November 03, 2006

Fixing the Produce Supply Chain is Big Business for Supermarkets

Most of us remember last month's ban on spinach due to E coli, one of those nasty intestinal bugs that can easily cost you significant cash by putting you out of work, into the hospital, and for some who are really unfortunate, even kill you.

The situation is not much better for those who drank contaminated carrot juice made by bolthouse farms, the producers of one of my favorite drinks - a strawberry/banana blend of juices which are quite tasty.

In the end, there is not much to say about the ideas of prevention because in these circumstances, there is not much that can be done at the consumer level with regard to prevention. So, as was done by many, these products are simply avoided or banned by federal agencies to ensure that people don't get sick.

<b>What does this mean to your Investments?</b>

It does not take much imagination, however, to recognize that this is going to have a significant impact on your investment portfolio if you hold stocks of these companies or if you hold mutual funds that specialize in these businesses. The bottom line is that the trust that these companies had can be destroyed by a scandal of this nature and it can even effect the bottom lines of the retailers.

In my case, stop and shop and walmart are the places where I usually purchase bolthouse products. But, sure enough, after the news, the products were pulled from shelves, presumably costing these stores significant amounts in terms of wasted inventory and even more when you consider the lost profits. It is not easily seen exactly how much, but as time moves forward, it would be nice to think that these types of losses are both preventable and unnecessary.

<b>Nature Fights Back</b>

As time goes on, these "bugs" mutate. They change and become more and more resistant. And they are more potent than thought originally. So what does this mean? In simple terms, it may not be as easy as we would like to believe. Previously, using fertalizers that were non-manure seemed to significantly reduce risks, but with more resilient strains and more transmission methods, this basic safeguard doesn't seem to get the job done anymore.

Voting With Your Wallet

With no clear solution in sight, despite the O.K. signal from the government, my instinct still tells me to avoid some of these products. After all, what has really changed in terms of the screening process for these produce products? And are those changes enough to combat the resilient strains? Personally, I am not sure that the risk is worth it. I'd like to see retailers and produce farmers create a better screening and a more concrete plan to cope with this problem. That would make me comfortable as a consumer.