I Create my own Sales

While I have a 9-5 where someone else tells me what to do and how to do it, I like to see myself as a “boss” in every other aspect of my life. I make my own schedule with my real estate work, I set my own prices for my rental properties, I determine what stocks I want to invest in, and sometimes, I create my own sales. I can’t always wait for a retailer to decide they want to unload a product. And while I’m at the prime of my life, I am past the stage of my life where it is acceptable for me to get trampled at black Friday sales. Yet, I refuse to pay full price for anything. So how do I reconcile the two? Here’s a story…

cashback

My husband is an Oakley fan. I don’t know if he was always partial to their sunglasses or if it’s a by-product of his military service, but Oakleys are to him what Hondas are to me: when it’s time to upgrade, you just get a better model of the exact same make and style. So when the lenses of his sunglasses were scratched beyond recognition after 3-4 years of use, we went on the hunt for a pair of lenses (since the glasses are custom built, you can just replace whatever parts are damaged without purchasing a new pair). Unfortunately, the model that he has was no longer manufactured by the company and thus, parts were not available. They had a 2.0 version that was very similar but the newer parts were too big to fit into the old glasses.

I don’t know if most people know this but Oakley offers a trade-in program where you give them your old pair and they give you 25% off any new pair you purchase. So he built a new pair of sunglasses that are very similar to the ones he wished to replaced, albeit a little bit bigger, and the total price came out to $200. With the trade-in discount of 25% off, we got $50 off the price for a total $150. We then charged that $150 to our American Express card which had a $30 cash back for Oakley in the form of a statement credit. That statement credit hit almost immediately (I got a phone alert that it had been processed as soon as the transaction posted), so we ended up paying a total of $120 for a pair of $200 sunglasses, and to top it all off, we got 150 rewards points towards our points balance that we will use as we see fit going forward. Just in case you were not keeping up with the math, that’s the equivalent of 40% off. We did not have to wait in line or get pepper sprayed like Walmart unruly shoppers.

Nothing we wanted at the store was on sale, but we got a great deal anyway because every decision we make and every time we pull out our wallet, it’s a very deliberate move. There are no impulse buys or last minute decisions. Everything is well-planned.  Do you ever hear the phrase: “If you fail to plan, you plan to fail?” It’s not just a cliche.

Advertisements

Adulting 101: Big Girl Money

financial-literacy-money-jars-istock_000048253042_double

Adulting is hard. It’s even harder for the millennials who came of age during or after the Great Recession. It certainly doesn’t help that financial literacy has always lacked in our society. So I decided to put together a list of 10 things you can do to manage your personal finances like a grown up.

1. Have a budget to help you keep tabs on money.

2. Set specific and realistic financial goals to make sure that you not only have something to look forward to but that you also stick with it.

3. Find a money role model who will give you something to strive for. S/he will make you realize that it is possible to get yourself out of debt, they can keep you accountable and they are a much better influence than your friend who says: “YOLO!”

4. Practice the art of ‘No’. Establishing boundaries protects your wallet as much as your sanity. Girls trip to Bali? Matching designer duds for the bachelorette week end? Expensive steak dinner after work? If you can’t afford it, say no & stay firm.

5. Don’t overspend. It sounds simple but if it were that easy, studies results wouldn’t show that 1/2 of all Americans are struggling financially. There’s no greater sign of maturity than exercising self control & being able to delay gratification.

6. Save, save, save. Emergency funds, retirement, short & long term goals. Save for all of them. Saving will prevent you from spiraling out of control under a mountain of debt.

7. Monitor your credit. There should never be surprises when it comes to your finances. Maybe except for pleasant ones like being ahead of your savings schedule or inheritance from a rich long lost cousin. You don’t want to find out long after you’ve started the process that your mortgage has been denied or after your clunker breaks down that you don’t qualify for a car loan. You should show up for credit applications equipped with enough information to negotiate from a position of power.

8. Be properly insured. When I landed in the hospital in late 2009, I couldn’t have imagined my life would change the way it did. In fact, I did 2-hour street parking outside of the hospital. I ended up leaving 4 weeks later & a month after that, I got $50,000 bill. All but $150 was covered by insurance. As a seemingly healthy 23 year old, I could have passed on coverage to save myself the $250 a month I was paying. Instead, I decided I needed to be properly covered like the adult that  I was & that decision saved me from financial disaster.

9. Start learning investment basics. You cannot save your way to wealth. You can only earn your way to wealth either through wages, investments or some combination of both. You don’t have to become an expert stock picker, but you should learn the difference between some key concepts like 401k v. IRA, stocks, bonds & mutual funds, associated fees & tax implications of different investment types, etc.

10. Track your net worth. Your net worth is a measure of your financial progress. It is also a motivating & financial management tool & that is why I began actively tracking my net worth late last year.

Cash Back Queen

cashback

As much as I hate spending, it’s a necessary evil. Before I moved further away from the city and before I was married, I had fewer expenses and less variables that were determining factors in my spending habits. While my husband and I are on the same page about the basics of money (spending less than you make, saving for retirement, use credit responsibly), it’s harder to convince him to participate in something as restrictive as a “no spend week“.  To a personal finance nerd like me, it’s a fun and exciting challenge. To almost anyone else including him, it’s a annoyance and an impractical habit. So how do I try and bridge the gap? Cash back of course! If I have to spend, I might as well do whatever I can to minimize my net expenses. Here is how I do it.

Ebates – I’ve seen the commercials on TV for years and I never bothered. I always thought it was one of those gimmicky things that you have to pay and sign up for and you may not see much if anything at all. I also assumed that there’d be a lot of obscure stores on the website that I’d never use. I was leaving a friend’s home and she was walking me out when she said “Oh! My ebates check is here!” She’s not the type to sign up for things that will waste her time so that made me curious. I asked her what the largest check she received amounted to and she told me $70. There was nothing to do but sign up and shop. I looked into it as soon as I got home and when I realized that Amazon was on that list, I was sold! I signed up in late May and I’ve already earned $30 in cash back from it, $5 of which was from Marriott. Yes, you read that correctly. You can book hotels and even trips through Travelocity. Sign up today and start collecting cash back on the things you buy anyway.

Bank Credit Card – In addition to the 1.5% cash back my primary bank’s major credit card offers me, I occasionally get bonus cash back for particular retailers. While it cycles between different retailers every few months, there are some mainstays. I can always find some of my favorites in there: Starbucks, Papa Gino’s, FiveGuys, Sunglass Hut, Autozone, Nordstrom Rack, etc.

AmEx – Just like my bank’s card, my American Express also has bonus categories. For example, we just got a notification that we would soon see a $30 statement credit for on my husband’s replacement sunglasses because they had a deal for Oakleys this month. The best part of having those 2 completely different cards is that rarely if ever do the bonus rewards overlap, therefore, there’s always something for us to take advantage on.

Cash back is a great way for our household to try and keep as much of our money as possible. We not only wait for things to go on sale and use coupons, but between ebates and our credit card rewards, we do our best to spend as little as possible.

Solar Update – April 2017

solar-panels

My favorite time of year has come! The days are longer, the snow seems to be gone for good, and birds are chirping on my way to work. Spring is upon us. I’ve always loved spring and summer, but now I have even more reasons to embrace the seasons. No, not just because the kids are out of school and there will be less traffic. Because it’s sun season! As you know, we got some solar panels last summer and we enjoyed many months of free electricity. It was truly a sad day when I had to pay for my first electric bill in months after the start of a frigid winter. These things will spoil you…

But the sun always shine eventually and, boy is it shining! My March 2017 electric bill was $38. We are retiring the heating for the season and thus expecting a much lower utility usage, until late June when we have to kick on the AC. Even then, I’m thinking that the 12-13 hours of sunlight that summers in New England graces us with should be sufficient to offset the worse of the damage. I might have reached the electric bill break even point. If so, I am looking forward to negative balances (I don’t say that very often) for many months to come so I can run my heat for free in November.

Let’s raise our glasses to sunny days, tax credits, and free electricity.

No Rest for Dead Presidents: My Dollars aren’t Lazy Bastards

What an awful headline. But I’m not feeling particularly creative today so it will have to do.

money

In an introductory investment post, I liken dollars to employees who must work to make my life better. Money has a significant advantage over us when it comes to working and earning potential. We get tired, we need sleep, our loved ones want our attention. Money has none of those conflicts so what reason is there for it to not be working tirelessly to free you from the rat race? In my case, my little dead presidents’ only duty is to slave away to improve my quality of life. Here are some of the ways I make sure they aren’t being lazy little bastards.

I structure my bank accounts deliberately: Some days I can’t even keep track of how many accounts I have. But the complexities of both life and banking regulations do not allow me to simply have a checking and a savings. While I have a checking account for my every day use, that is the lowest yielding account there is. I can’t keep all my money in a checking account. However, the highest yielding bank account is a CD (learn more about CD’s here and here) and there are penalties for early withdrawals. Since emergencies do not wait for CDs to mature, I also have a money market account which provides me with quick access to cash at a much higher rate than a checking but without the potential for a penalty.

I only use cash back credit cards: Your bank is making money off your use of the card, shouldn’t you do the same? My credit card gives me 1.5% cash back on everything I buy and on a monthly basis, the bank runs some specials at various merchants where I get an additional 5-15% cash back. For example, my tail lights went out a few weeks ago. We have both an Auto Zone and an Advanced Auto Parts in our area. However, our credit card company was running a 10% cash back special at Advanced Auto Parts. When it was time for my husband to replace the tail lights, I told him to make sure he went there. He spent $40 and we ended up getting $4.60 back (10% special + the 1.5% we would normally get). Of course, since there is no annual fee and we pay the balance in full every month to avoid interest, we are being paid to use our card.

I get educated: It’s hard to make or save money when you don’t know what benefits or features are available to you. I’ve discussed my solar adventures in the past. We got thousands of dollars in rebates courtesy of the U.S. Government for our investment in solar panels (if you pay taxes, thank you!). Although we would have eventually taken the plunge, we might have missed the opportunity for our big tax credit if we waited too long. There is no guarantee that the program will be available indefinitely or even beyond 2020. We also learned about the energy credits which we are on track to receive quarterly for 10 years. While they are small amounts, they will be offsetting nearly half of the cost of the system. So not only did we get a 30% subsidy, we are also selling some of the credits we produce over a period of time to offset the remaining 70% of the cost. That does not include our actual energy savings which have been pretty substantial (my March 2017 electric bill was $38. I live in a 3,100 square foot house in New England).

I pay debt aggressively: Debt is slavery. It’s crippling because it’s expensive. The best way to handle debt is to get rid of it as quickly as possible. My student loan interest is 5.16%. It makes no sense for me to carry that balance for 10 years (standard repayment) if it’s costing me as much as a moderate investment portfolio would cost. So when I graduated from an MBA program with a balance of $47k and change, I was determine to get rid of it by any means necessary. Two years later, my balance is  $11,600. I have saved myself thousands in interest and the amount that I did have to pay, I have able to deduct it from my taxes. So I have used the money I have in the bank and the money I earned working both my regular job and real estate to cut my balance and reduce my interest.

I keep cash to a minimum: ‘Minimum’ is relative.  It doesn’t mean I only have $1,500 in the bank. I keep a fat emergency fund which correlates with my low risk appetite. The more risk adverse you are, the more money you want available to weather unpleasant unforeseen events. For me that number is a year’s worth of living expenses. Before the recession, the recommended amount was 3 months. After 2008, financial experts were recommending 6 months. I like to be cautious, maybe overly so, thus, I choose 12 months. Anything above that number is invested in various types of projects (or debt payments) that are meant to increase cash flow (or cut my interest expense).

Think of the ways you can make your money work for you. Idle funds are being eaten away by inflation and are not doing anything to improve your bottom line and get you closer to financial freedom. This is the value equivalent of throwing your money away.

De-clutter Challenge

are-you-up-for-the-challenge

In a previous post I briefly discussed money challenges and how people use them as extra motivators to either boost savings or pay down debt. Whether you’re saving for a vacation, a house or just want to improve your money management skills, you can never have too many tools or tricks at your disposal. This is why I encourage people to get creative about improving their financial behaviors. Not everyone gets as excited about personal finances as I do, so it doesn’t hurt to find a way to spice it up.

Today’s post is dedicated to the de-clutter challenge.

What is it: This challenge requires a little bit of elbow grease, but besides needing some motivation and patience, it  is not very difficult. We tend to acquire a lot of things over the years and the less we move the more we accumulate. Given that spring is in full swing, I think this timing is appropriate. Regardless of your financial goals, I think anyone can benefit from this activity.

This is spring cleaning with a purpose! Make a pile of everything you have not used in 12 months and separate the pile into 2 more categories. One is what you think you will use in the near future (maybe you broke your arm this winter and that’s why you haven’t used your skis, but you’ll be done with rehab soon and will be hitting the slopes for sure in 2018). The other pile what you don’t foresee yourself using, or anything that you have 2 of (newly weds, this is where you will shine! When I got married, I suddenly ended up with 2, if not 3, of everything. Seriously… I have 2 microwaves & 3 toasters). Take very good pictures from various angles (the more valuable, the better the pictures should be) and post your items on various sites for sale. I use Facebook, Amazon and Letgo. While I generally don’t mind ebay, I do not like that their listings expire every 7 days, making me a slave to continuously have to go back and relist the items.

Outcome: Results will vary, but the more items you have and the better the quality, the higher your revenue will be.

Variations: If you’ve already done that, try the same challenge with unused furniture. This will work well if you live in a college town where young students cannot always afford new furniture.

Why I like it: This is a great way to hit two birds with one stone.

If you love cash and your messy garage has been driving you crazy, this is the challenge for you.

Frugal Fridays: Reception Details

This is my version of throw back Thursday: Some of the best finds from my own days of wedding planning.

reception

It’s the little expenses that creep up on us. That’s what every couple is told to watch out for. You budgeted $2,000 for your dress but the slip is $120, the bra is $80 and a veil is $300. Oh you think that garter is cute? That will be $30. It never ends. And that’s not just your dress. The reception costs will sneak up on you as well. Your keepsake box will run you $15 to $30. Don’t forget taxes, shipping for the things you can’t get in town, etc.

I couldn’t allow the unexpected to bust my budget, so I hunted for deals like a man lost in the Sahara hunts for water. Here are some of my deals:

1) Small gift bags for my favors: less than $70 for 100 from Amazon
2) Matching color tissue papers to stuff them: $9 for 100 from Amazon
3) ‘Mr. & Mrs.’ wood chair hangers: $15 (50% off sale) from Amazon (I never actually used those as I forgot I bought them!)
4) Personalized hanger* – $3.99 (+$10 for shipping). This was a one-day sale. These are usually $19.99-$25.99. from Etsy

*All items except for the hanger were shipped for free, saving me a lot of money as well.