Brother Can You Spare A Minute?

1. You have pile of cell phones in a drawer.
2. You open a closet and find a piece of electronic gear still shrink wrapped.
3. You stay up until midnight to check out the next day’s Woot.
4. The only way you can keep all of your USB Cables/Chargers/Docks straight is by using a label maker.
5. You find a cool gadget on sale and buy it only to find out you already own one once you get home and look.

So far I’m 5 for 5.

What else should go on this list?

A pack a day smoker spends $1825 annually on cigarettes (according to this calculator @ $5 per pack). I’ve got plenty of friends who like to make fun of smokers for wasting their money on cigarettes yet they’re putting nothing away for their retirement. Clearly the smoker has made a choice to waste their money on cigarettes, but my non-smoking friends are simply making less obvious decisions to spend their money in other ways instead of putting the money into savings.

Whether it’s the Marlboro factor or the latte factor (or heaven forbid, both) it’s easy to fall into bad financial habits which do nothing to advance our long term goals. And it’s not enough to just break those habits (as hard as it might be)  you have to start a new habit of actually saving and investing the savings.

Creating a new habit is hard, but you can help yourself by setting up an automatic transfer to savings. If you were to transfer $150 per month to savings each month you remove the money you would have spent on <insert vice here> from your available pool.

Some recent events have started me thinking about the need for me to flesh out my personal safety net. Conventional wisdom holds that you should have the equivalent of 3 months of your net salary in savings for emergencies. I’ve been more focused on long term retirement savings over short term, but I’m beginning to think that might have been a mistake. So I’ve decided to dedicate the first half of 2008 to the following goals:

• Increase my safety net to 3 months take home pay
• Identify recurring expenses which can be eliminated
• Add to my professional certifications
• Reconnect with 10 professional contacts a month
• Update my resume

I think the lesson for me anyway is that I need more balance in my investing. Ideally I’d probably make this transition a more balanced one rather than making a 180 degree change, but my concerns are somewhat time sensitive. By June I should be in a position to reevaluate my overall strategy and I think the next iteration will do a better job of determining and funding my investment priorities in the proper proportions.

Here’s a great way to piss your kid off!

Step 1. Offer to hold onto their money for them.

Step 2. Write down exactly how much they’ve given you to hold for them.

Step 3. Every time they ask for some of their money, charge them $1.50 for the convenience of having a portable bank.

Fun right? I mean how dare they get upset because you are charging them $1.50 for the convenience of having a portable bank. I mean you have to update their balance every time they make a withdrawal; don’t you deserve to be compensated for all of your hard work? How can they be so ungrateful?

Oh wait… most banks charge the same thing to their customers and they make billions doing it. So clearly the average American is just fine with these fees in the name of convenience. But what happens when banks start jacking up those fees? Will customers just sit idly by and take it? The sad thing is most of them probably will. I’m leaving my banks because of “stupid” fees and poor returns.

Step 4. Stop torturing your kid, waive the fees.

Step 5. Stop torturing yourself, do the same.

But I need to write a will. Writing a will has been on my “short” list of things to do for the last 2 years, but I’ve never taken the time to do it. Every time I think, I need to do this, a projector is flipped on in my head and the “Bring Out Your Dead” scene from Monty Python’s Holy Grail starts playing:

CART MASTER:
Bring out your dead!
[clang]
CUSTOMER:
Here’s one
CART MASTER:
Ninepence.
DEAD PERSON:
I’m not dead!

Great movie; stupid excuse. So this weekend I’m going to bite the bullet and write up my will. I have to right? I blogged about it.  Ah social pressure.

Right now I’m reading through a number of great resources at NoLo to prepare.  I have a pretty simple estate, so I’m not planning to have a lawyer review it. So total cost to me for drawing up my will? $0. No excuse for not having done this sooner.

Do you have a will yet?

4 years ago I needed a new pair of glasses. I was pretty close to broke and looking for the best deal possible. I went to a couple of optical shops close to my work and nearly choked at the prices. Frames alone were $200+ for every pair that I liked. My prescription isn’t cheap either, so I was anticipating another $200 or so for the lenses. $400 or more for glasses was going to have me eating ramen for a month.

So I decided to see what I could find on the internet. And what I found was Optical4Less.  At the time, I could only find 2 reviews* of this company (admittedly both were positive) and the company was based on Hong Kong.  Normally,  I probably wouldn’t have taken a chance. But their  price for a pair of glasses was $29 (+$10) shipping. $39 vs. $400 was a huge delta and so I decided to take a chance.

3 weeks after I ordered, a brightly colored package arrived at my doorstep. Upon opening the package and inspecting my glasses I couldn’t have been more pleased. I got more compliments from people on that pair of glasses than on any pair I had owned previously. I told all of my glasses wearing friends about Optical4Less and  several of them ordered from them as well. All of them have been pleased with their purchase.

2 years ago I went hog wild and ordered 3 pairs of glasses. One pair of rimless glasses, one pair similar to the pair I had ordered previously and a pair of semi-rimless tinted pair for sunglasses. Total cost: $96. If I had purchased the same glasses from a local shop my total cost would have been in excess of $1500.  And all 3 pairs again exceeded my expectations.

Optical4Less has an affiliate program… but I won’t sign up for it. I’m such an evangelist for this company that I don’t want to cloud my enthusiasm with the perception I am somehow being compensated for my endorsement.

If you wear glasses I encourage you to check them out. The biggest objection I’ve heard from people about ordering glasses online is that they aren’t sure how they will look. I recommend finding a pair of glasses you like on the website and then visiting your local optical store to try on similar pairs. While you’re there, compare the price and I think you’ll find that the risk is minimal if you find a style that you like.

The added bonus to purchasing from Opical4Less is the look of amazement on the faces of your friends when they find out how much they cost. Or, if you’re like my Seattle friend the inner chuckle when you keep that little tidbit to yourself.

* These days you’ll find a lot more reviews for this company. I encourage you to check them out.

At that rate, my 976 calls seem like a bargain! The cost of an ad for this Sunday’s Super Bowl clocks in at $2.38 million for a 30 second spot. With a price tag like that, advertisers will be expecting a lot of buzz for their buck. In case you miss any ads this Sunday, go here to help those poor advertisers get their $ worth.

There are many countries where negotiating the price of something, anything is the normal course of affairs. Buying a bag of rice, a t-shirt or a CD is an elaborate dance between the seller and the purchaser.

Typically in the United States we consider the price to be the price unless we’re dealing with big ticket items like a car or a house. The reality is that many things are negotiable.

Clearly we understand this as it relates to the internet. If I see something online I’m interested in purchasing I’ll do a quick search to see if I can find it somewhere else cheaper, or with free shipping or free pickup. But when it comes to shopping in a store most people assume that the price of an item is the only price the seller is willing to accept. And while that may be true at some retailers, it isn’t a universal truth.

Think only mom and pop stores will negotiate on price? I’ve found many national retailers are willing to negotiate as well.
[Read more →]

After trying Microsoft Money and being disappointed I decided to try one of the the new players on the block: Mint. Mint is part of a new generation of Web 2.0 personal finance applications and is currently in beta. On the website, Mint claims that setup takes under 5 minutes. I had my primary bank account configured in about 2 and had added two additional accounts in under 10. I considered this to be quite acceptable.

Once I had the accounts configured, I spent another 30 minutes fine tuning the categories assigned to my spending. Overall I found this to be acceptable as well. Mint did a great job of categorizing the majority of my transactions and for several of them, I know why they were categorized incorrectly, but give them props for the tool being smart enough to do even do that. I had 3 transactions where the display name for the transaction included the words “Membership Fees”. Mint categorized them accordingly, though for me they actually fall under education (it was the monthly tuition payment for my son to attend Paul Green’s School of Rock). The number of uncategorized transactions was relatively small and the UI made it easy to apply the same categorization to all transactions of the same type.

Mint is off to a great start, but isn’t quite a complete financial management platform. Here are a few of the shortcomings, though by listing them here I am by no means saying they should necessarily be deal killers depending on your needs.

• US institutions only
• No custom categories
• Doesn’t support 2 factor authentication
• Can’t import historical data from other applications
• No support for other account types (car loans, student loans, investment accounts)

Some of these limitations aren’t the deal killers for me they might be for others. Even if they seem to be deal killers, I encourage you to check out this application. The clean UI, ease of setup and reporting features are worth taking a look.

While this may not become my primary tool for managing my finances, at the moment I am leaning towards continuing to use Mint on a periodic basis to see basic snapshots of my spending and budget. It was so quick and easy to set up that I don’t anticipate it taking more than 10-15 minutes a month to maintain. With something that quick and easy to use, it’s worth logging in occasionally to see if their unique way of looking at my finances yields any insights.

Summary: If you haven’t used another tool to track your finances in the past, have just a few accounts and want a free tool to track your spending and budgets Mint seems to be a great place to start. As they add more features Mint may become even more compelling.

I have a confession to make about the biggest leak in my financial boat. I eat out entirely too often. To help combat that I am implementing the Double Thermos Savings Plan. The plan is simple; every day I will take two thermoses to work. The first, a Nissan Thermos FBB1000 34-Ounce Stainless Steel Vacuum Insulated Briefcase Bottle. The second, a Zojirushi Mr. Bento Stainless-Steel Lined Lunch Jar. The first will be filled with tasty Ruta Maya coffee brewed at home. The second will contain my lunch.

I’m not really trying to combat the literal latte factor here, the coffee is mostly because what I brew at home tastes significantly better than what we have in the office. But taking my lunch at least 4 days a week is a primary requirement to meet my savings goals for 2008. I’m hoping that this system along with more frequent reviews of my actual spending in various categories vs. my budget for those same categories will help me keep on track.