finances.randypeterman.com

A wise man once said…

Archive for the ‘Money Management’ category

Pre and Re Views

August 22nd, 2007

Tomorrow I will be going in for a review of my contract with a major client (I am an independent software developer/contractor) and I’m hoping that all of my hard work will pay off and they’ll award me a contract that will at least cover inflation. If its more my wife and I have already discussed how we’re going to handle an increase in stable income. Its not that we’re focusing on getting more money, more money won’t make us happier or better people, but instead we’ve already planned where our income will go so that it doesn’t simply become outgo.

Many people get a raise and then immediately find somewhere for that money to go so that they can have more stuff or attempt to keep up with some trend. While this isn’t absolutely wrong on a moral level I would encourage readers and folks to consider the options that they have when it comes to saving or investing your finances. We haven’t got six months of living expenses saved up and we’re interested in getting to the point where that is the case so that we can further tackle strong investing ideas. I have a friend whom I will call Mark who has said for about as long as I’ve know him that whenever their family is the beneficiary of a raise they just tuck the difference from their old salary and the new salary away into the bank. What this means over time is that if they have to take money out of their emergency fund they can because it is well stocked, and otherwise other than inflation and areas where their cost of living might go up they don’t automatically spend the difference. They don’t treat it as windfall money, they don’t treat it as spending money, the treat it as an investment into their future.

If you can preview your budget and plan out ahead you will more than likely find events like raises and bonuses to be quite liberating and not a new distraction. The future you will know how to handle the scenario because you’ve already got a plan for the money and the implementation won’t be something new to handle either. Keep your focus on your plan and you should see growth accumulating again and again.

No comments »

Posted in Foundations, Investing, Money Management, Tips'n'Tricks

Wesabe Review II

August 21st, 2007

This last week I’ve been using Wesabe much more aggressively. Quicken was nice, but Wesabe is simpler and I think it has its merits. Wesabe has a lot to offer for being so simple. I can track how much I spend in different categories and also evaluate how those categories are accumulating in total expenditures. One cool thing about Wesabe is that it allows me to compare my spending with other anonymous users. I can get tips regarding the different categories and goals (more on goals later) that have been submitted by other users.

Interestingly enough my ‘crap’ tag brought up a report showing that many other people have bought stuff from Amazon.com and labeled it as crap. not crap as in quality but crap as in ‘stuff’. Unfortunately I’m using the crap tag to designate purchases of items that are of low quality such as dining out at a bad restaurant. What’s interesting is that I can see that I’ve spent money on items that I don’t want to spend money on again or services that offered low quality so I can be reminded not to go back there again either.

Wesabe can be slow at times due to its architecture, but for the most part the slowness in speed is not overly annoying so I’ll continue using it. Their website indicates some ‘pro’ features will be coming soon and that has my attention. It may be worth paying money per month or year if the added for-money features deliver needed functionality that extends the already nice user interface.

The goals functionality I mentioned earlier is neat because there are publicly shown lists of goals but you can also create your own and then associate various tags to associate with the goals. Because the goals are set by you you can get as granular as you need to. I find that setting a fewer higher level goals, such as save a million dollars, is all I need to do. But, being database driven means that the site can handle pretty much any goal you want or need.

Wesabe can also auto-update many bank accounts over the web if you choose to use that route. It handles file uploads as well for the web sites or credit card companies that don’t share their information openly. Wesabe is simple, clean and offers various security features that make me really enjoy their product. I wish them the best of luck and recommend all readers give them a serious look-see for their own use.

Wesabe gets a seven star Shake it! rating!

No comments »

Posted in Money Management, Shake It or Leave It

Self Discipline and Motivation

August 20th, 2007

This weekend my wife asked if I minded that we go as a family to a local farmers market. Turns out that by farmers they meant all sorts of things including chairs, windows and various other non-farm related items. One of the more food related booths had a bar called a J.E.N. bar. My wife and our girls each had a sample, but I declined due to a need to avoid sugar at the moment. My wife really, really wanted to purchase a box of the bars. The box cost $22.00 if I recall correctly. I told my wife that she could buy some next week if she saved that much from our grocery bill this week.

My wife’s motivation is apparently very high for this because she’s hunkered down and is attempting to meat the goal so that she can buy them as a treat to the family as well as meat our budgetary needs. I’m impressed and hope that she can get them so that she and the girls enjoy the treat but it doesn’t kill our budget just for a little bit of nutritional spoilage

Keep your budget as the main focus and you’ll find yourself in great shape to know whether or not you should buy energy bars, treats or that item that you’ve been eying!

No comments »

Posted in Money Management, Tips'n'Tricks

The Paycheck to Paycheck Mystery

August 18th, 2007

I heard recently of a person who was living paycheck to paycheck with payday loans keeping that precarious imbalance. Furthermore at a past residence they were beginning to receive phone calls from creditors. Actually, I’ve heard about this over and over. Its not happening to just one person, seven out of ten Americans in a a recent survey were living from paycheck to paycheck. I’m personally trying to distance myself from this approach to living as fast and efficiently as possible. Here are some things to consider in the process for those who may be involved with such a problem:

Reach for help from family and friends. Yes, its humiliating, but you have got to get out of the cycle you’re in. Find a place to stay that will reduce any rent/mortgage/utility bills. Those are the essential bills and if you can reduce those its a great place to start. Pride comes before the fall so don’t be proud and avoid the tumble.
Get a plan together to limit your expenditures outside of the food, clothing and shelter realm. Figure it out and then execute it. Figuring it out without action will just create continued failure.
Figure out how much you have coming in and then how much you have obligated yourself to pay out. You need to know how much you have to pay off creditors in the next step.
Contact your creditors. Be proactive – I know this sounds crazy, but if you don’t contact them and work out some sort of payment plan a lawyer may be contacting you. Depending on the type of loans, debts and such you could be sued for your debts and have your wages garnished. Given that your own choices got you into this mess its probably best to just figure out how to get out of it while cooperating with your creditors. The plan mentioned above involving limited expenditures will free up money to pay off debts!
Learn from your experience. If nothing else walk away from things having learned what not to do ever, ever, ever again. Find your personal weaknesses – whatever they may be - and start to evaluate why you’re weak there and learn things to grow and strengthen yourself in those areas.
Learn from others. Ask others around you what they’ve done to fix their financial situations. If you find others who are still financially broken – band together to learn more from folks you find who aren’t hosed financially Communicate when you learn something new. Often that communication about something new will help you remember it for the longer term.

The biggest thing I have learned while evaluating my own finances has been that I had to start somewhere. If you find yourself in the straights wondering if you’ll make it you have to figure out where you are and then plan how to get out. If the definition of insanity is doing the same thing over and over expecting different results then you have to break the cycle somewhere. Sure, you may be living on beans and rice and used clothes under someone else’s roof for a bit but once you’re on your feet again financially you’ll be ready to charge forward with greater productivity and you’ll know not to ever take out a payday loan again. Ever.

2 comments »

Posted in Lesson Learned, Money Management

Billy, Basketball and Burdens

August 9th, 2007

I was looking at my stats today and noticed that one IP address that hit this site was from Sunnyvale, California USA. I’m actually sort of from Sunnyvale. I spent about two years there while my dad worked in Mountain View, California. I have fond memories of Sunnyvale for the most part. One of the more negative memories is one from the playground where I used to play basketball with two friends. One of them was a kid named Billy. Billy had about 200 of those jelly bracelets that were cool at the time on his arms. I can’t fathom having to put those on and take them off for bathtime, bedtime or the likes, but Billy said he did that every time.

Billy, Jorge and I would play basketball together at every recess unless all of the courts were taken, and even then we would sometimes just practice dribbling and passing. In all honesty I am a horrible basketball player now, but back then I enjoyed it greatly. Billy was there every day at recess. The three of us would take turns shooting hoops as best as our second grade bodies could manage. At the end of the recess time we’d all pack back int our classroom and at the end of the day we’d say, “See you tomorrow!”

One Monday Billy never showed up. Jorge and I passed it off as him being sick and threw the basketball around together. But the next day he was still missing – so we thought he must really be sick. But after a week of being gone and then another we realized that Billy was gone for good. I have no clue what happened to Billy. Maybe his parents moved, maybe his parents got a divorce and just one of the moved, but whatever happened: he was gone. Jorge and I played together for a while but two wasn’t the same as three and eventually things fell away and I moved onto some other playground games, as did Jorge.

I tell you that story to tell you this: Set up an emergency fund because you never know what might happen to your job. You don’t know what could happen to your health, and you don’t know what could happen to a family member that was an income source. It would probably be prudent to review your will, your insurance policies and anything else that makes up your “after I’m gone” plans. Planning ahead could prevent any of these events from being critical, and instead make them unfortunate, but not a burden. There is little you can do about those things, but whatever you do, don’t just be a sitting duck. Though usually on the playground they don’t play duck, they play HORSE. Don’t be a sitting horse either.

No comments »

Posted in Lesson Learned, Money Management, Outside the Box

Weed ‘n’ Feed

August 8th, 2007

This evening I spread weed and feed on my lawn. As I was doing that I thought about finances (which I find myself thinking about pretty much all of the time when I’m not thinking about anything else). Finances needed to be weeded and investments most certainly need to be fed. Weeds grow in our finances in areas that we don’t maintain. They can come in the form of constant expenses or they can show up over night in the form of unexpected bills. As things come up you need to keep your eyes peeled for what may be ahead. The emergency fund can help with those things. You do have an emergency fund, don’t you? Its money that sits there ready to tackle emergency needs. Once its been dipped into you need to replenish it, and then get back to your previous financial focuses.

Investments, much like lawn, need to have the right nutrients built into them. If your investments return too low a return then you’re going to need to add something to their soil mixture can let the water soak into the soil and then the grass can grow This may be involve changing your investment portfolio to have less fees involved with trades or any number of things that allow your money to work without distractions from brokers or fees. If you get bad stocks or investments you have to nip them in the bud and refocus that money.

Whatever you’re doing with your finances, don’t let them just go wild – that’s a garden of weeds and fungus waiting to happen!

No comments »

Posted in Investing, Money Management, Outside the Box

Adaptivate!

July 26th, 2007

One of the most powerful tools that humans have is their ability to adapt. When your budget comes close or overflows in a month you really need to take this into account. You’ll want to check your spending in various areas and look for trends. Are the prices of groceries killing your budget this month? Did they kill it last month and the month before? Adapt! Figure out if you need to change your grocery shopping style, figure out if you need to invest more time in wise coupon clipping? Do you need to make sure that you’re always using a shopping list so you know exactly what you need? Jerry Seinfeld, in his stand up movie I’m Telling You For the Last Time talks about buying milk this way: “Some of you are going to stop on the way home and buy milk because you’re not sure if your milk at home is bad.” [that's not a literal quote, but its the concept of one of his bits].

Adapt your budget over time for two reasons: 1) To stop the bleeding when those times come and 2) To pay off debts faster or save more when those times come. When you’re bleeding in an area of your budget you’ll want to make sure that the bleeding stops so as to keep your budget healthy. You’ll need to figure out if what you just experienced in your budget was an emergency or if you have to rethink its elements. When you are starting to accumulate money in areas that don’t need to have excess money (I can’t fathom needing to accumulate more than several hundred extra dollars in the grocery category so that your holidays are extra-fooded) you may be able to graft that into your high interest savings account, or put aside that money for a vacation if you’ve been working insane hours. But whatever you do: pay attention to your budget and adapt it on a regular bases – that’s smart money management!

No comments »

Posted in Money Management, Tips'n'Tricks

Finances & Computers

July 23rd, 2007

I’m a software developer by trade and so when it comes to computers and money I have some opinions. I use and love Apple computers. I have Quicken on a Windows desktop as well as Cha-Ching in OS X. I’m not a huge fan of either since Quicken sometimes behaves weirdly and can be complex at times (David On Finance writes he doesn’t like Quicken at all). I’ve also got Microsoft Money installed, but it doesn’t interact with my banks’ websites well and the money management system I use isn’t easily supported with their budgeting method. In the same article linked to above David talks about Wesabe – I’m checking it out right now.