Money Reasons

Smart Reasons to Save, Use and Invest Money

Archive for March, 2010

Is It Best to Pay With Cash or Credit?

March 31st, 2010

Are You Pay with Cash or Credit Cards?

Some people hate credit card, and I understand and sympathize! When your credit debt is too high, it’s like walking around with some type of huge invisible 50 pound parasite attached to your neck. So for this group credit cards should not be used!

To help identify which to use (credit or cash), I’m am going to write two “at a glance” decision lists:

When to use Cash only list:

You are carrying a credit card balance that you don’t pay off every month, and that balance is greater that $500.
You are shopaholic (not sure if you are? Click here to take the test)
You are saving for a house down payment. (You don’t want the loan officer to see you are deep in debt)
You are an impulsive buyer.
You are in deep debt (non-mortgage debt…).

When to take advantage of use Credit cards:

You always pay off your balance(s) every month
You are debt-free (excluding your mortgage)
You have great financial willpower and judgement.
You are automatically contributing savings to a retirement account of some sort.
You have reward credit cards, with no annual fee.
You like getting a discount of a few percentage point on every purchase by using the reward credit card mentioned above.

So, whether to pay for things using cash or credit card depends on two primary facts:

You are not in credit card debt already.
You have a high degree of financial savvy. Meaning that you have great money management skills. If you don’t have excellent money management skills, consider reading my news feed: MoneyReasons RSS.

Readers, are you a cash or credit cards guy or gal?

One of my goals at this site is to demonstrate some of the frugal and wise money management techniques that I use in my daily life, so other may see that it’s possible to get ahead on an average salary.

Regards,

- MR

11 comments »

Posted in credit card

Tags: cash or credti cards use cash or credit card lists using cash or credit when to use cash when to use credit cards why I love credit cards

Saving Money By Staying Healthy

March 30th, 2010

No, I’m not writing about jogging 10 miles a day, nor am I writing about lifting weights either! What I’m talking about is avoiding getting sick via colds, flus and other germs…

First, a little background about me… The last 10 or so years, I’ve have been sick a lot! At first like any great parent, I blamed it on my kids (and when they were very young, I’m sure they had an impact). But now that they are older and don’t put hands in their mouths so much. So now, I think I’m primarily getting sick from work. So, I stopped putting my cube neighbors’ mice in my mouth (lol),

Here is what I now do:

I use my sleeve to open the doors if I don’t have a napkin or tissue.
I take a napkin (from fast food places) out of my car and use it to open the doors at work.
I always use purell after using someone keyboard, or after someone uses my keyboard.
I have have a special routine for going to the bathroom.

I know, you are thinking “a special routing for going to the bathroom?” As you well know, not everybody washes their hands after going to either “of the options” when they go to the bathroom (how that for PC?).

This might be pushing the envelope a bit, but I’m going to tell you about my “special routine” anyway!

I open the door to the bathroom by pushing it with my forearm if I’m wearing a long sleeve shirt. (sometimes I push the door open with my foot if I don’t have a long sleeve shirt on).
Next, I take my magic napkin out of my pocket, tear a long inch wide strip of it and open the bathroom stall door.
The typical activities are performed…
Use another long inch wide strip from my napkin to open the stall door.
Wash hands vigorously (as the signs that I see around demands that I do, surprisingly the sign is not in our bathrooms… I guess we are suppose to know…).
Leave the water running (only for a sec) as I reach for a paper towel and dry my hands
Then use the towel to turn the water off. (Yeah, I’m being picky, but it works for me)
Grab another towel and use the bottom half to dry my hands fully.
Then as I go to the door, I use the upper half of the towel to open the door.
After the door is open, I toss the towel in the trash can besides the door.
Don’t tell anyone, but I’m the one who put that trash can there… So far nobody has asked why, and tons of people now use it (I’m such a trend setter)…
Now I go back to my cube healthy! Hurray!!!

I know this isn’t as glamorous or as exciting as practically any of my previous personal finance posts. But believe it or not, this post has a lot of value… if you use it, you too will get sick much less often, saving you money! This technique could also help you advance more quickly in your career. If you are sick less, you are at work more and you are able to perform at a higher level vs. if you were sick all of the time.

The past few years, I’ve hardly been sick… I attribute my good fortune to what we jokingly call the “hand something“, but since my kids read this, I’ll leave the name to your imaginations… Just think of hand protection

Oh, I also use my napkins for getting water from the filtered water dispense at work, and the elevator buttons, and any surface that I can think of that other people touch frequently. If you use small strips of the napkin like I do, not many people will notice either…

What do you think? Am I over doing it? Do you use similar techniques?

Respectfully,

-MR

9 comments »

Posted in Ideas, Savings

Tags: germ preventer keeping healthy virus preventer

Are You Too Smart to Be Rich?

March 29th, 2010

Is it really possible to be too smart to be rich or successful?

I think that it is entirely possible to be too smart, here are a few cases:

Perhaps those that went to a high caliber college came out with a slight elitist attitude? I would like to suggest that they make decision on what they think is correct and not objective data… So when Johnny, a graduate from a local state college ran the numbers and suggested something different… he gets largely ignored. After Johnny turns out to be correct, sometimes those smarter than he, still largely ignore his research and conclusion. Johnny, who knew that he was in the right, finally gets upset and quits… Then Johnny goes on to start a competing business based on his research and knowledge.
Perhaps another example would be the learned man/woman that just doesn’t have time for trivial matters, they are living for a higher goal. They are in a perpetually in a state of learning (or enlightenment), soaking up everything like a sponge! I have a friend that has a doctorate degree in chemistry. But he works at a grocery store… He has been going to college his entire adult life. As long as they are happy this way, who am I to judge.?.
Perhaps you are smart in certain areas, but can’t communicate those thoughts and ideas. Nothing discredits a brilliant idea as the inability to communicate your thoughts so that others can comprehend what you are saying. As a technologist, I have many friends that fall into this camp, including myself to a lesser degree.

Other smart people are held back from being rich because they don’t have the ambition, drive, or focus to do so. I’ve seen entire families like this. I think this behavior is learned… Perhaps they don’t believe that are deserving enough?

There are countless other scenarios… some don’t delegate tasks out, or try to do it all, or the inexperienced smarty trys to out think the wise battle worn expert.

If you are lucky enough to be able and open enough to identify these personal faults, perhaps you can create a system to work on to overcome such hurdles…

Do you know people like I’m writing about? How about you, do you know what your weaknesses are? Do you believe if you try with great focus, you to can overcome any obstacles?

-MR

10 comments »

Posted in Problems, Wealth

Tags: smart disadvantage too smart

MoneyReasons Weekly Cache 2010, Mar 28

March 28th, 2010

Weekly Cache – 2010, Mar 28

Random Thoughts:

I’m not sure how it happened, but most of my posts this past week ended up talking about frugality in one way or another. It’s an easy topic for me and one that I have lived most of my adult life.

Some comments from a few of my frugal posts got me thinking about why I’m so frugal… Is it because I’m a financial genius? I’d like to think so, but most likely… NOT!

So how did I become so frugal???

My family! Both my parents and grandparents are extremely frugal, so it’s all that I’ve ever known. Could I go into massive debt, going on a buying bing? Yes, it’s possible, but I would definitely feel out of my element doing that.

So for the record, when I talk about being debt-free or write about frugal tips, it’s not that I think I’m more clever then anybody… It’s just that I’ve been taught to think that way ever since I learned to walk.

My Favorite Top 3 PF Blogger Posts For The Week:

Sahmcfo.wordpress.com: “Math Class is Tough!” – My old excuse for debt - sahmcfo’s TV blew up! And instead of going out and buying a new one on a credit card. sahmcfo’s family is trying other activies instead while saving money to buy a new one in cash! Big kudos to her! I have a series that I call “Lemons to Lemonade” which is kind of what they are going!

FreeFromBroke.com: Exchange Traded Funds – Pros and Cons - This is a ETF article that covers ETFs in great detail!

Monevator.com: Personal Time Management - Wise advice from “The Investor” at Monevator! Instead of the same old dry boring stuff, The Investors makes it a very entertaining read!

My Favorite Post from Money Reasons This Week:

My Frugal Apartment – This is my favorite this week because of the nostalgic memories invoked! It also demonstrates how I’ve been frugal most of my life.

Closing Thoughts:

Frugality is easier to accomplish when you were raised in such a household. Living in such an environment, the frugal lessons are learned without even knowing it.

Frugality, while painful at first, once you start down that path, it becomes much easier and very rewarding when you finally become debt free!

Think frugal thoughts this weekend!

-MR

6 comments »

Posted in Weekly Review

A Frugal Middle Class Assessment

March 26th, 2010

I was in twitter when I noticed that SeeJaneGetRich.com tweeted a link to a U.S. News article on yahoo called “How to gauge your middle class status“. Since I love feedback and statistics, I thought I’d check it out.

It was interesting read so I decided I’d write about how I was doing.

Income: We are very close to the midde-middle income level for a 2 parent, 4 person household. We are a bit above that $81,000 dollar number, but still less than $100,000.

Housing: Our house is assessed at $200,000, but it’s only 2,100 square feet. It’s good size for my family though.

Medical Expenses: First, we are doing a HSA, so it’s kind of like it’s still our money. But we are much lower than the $5,100… We are more like $500…

Cars: We have 2 cars, both were bought new, but only cost about $30,000. That period in time may be the last time we buy new cars. Our expenses around them are less than average, because I telecommute a few times a week and car pool with a buddy occasionally.

College Savings: This is one area that I am very average. My savings rate is around $4,000 a year. To date, I have a total of $65,000 saved for my kid’s college expenses in a 529 plan.

Vacations: We’re pretty typical here too! Although we usually only spend about 75% of the $3,000 amount the average middle class American spends.

Retirement: I save about 15 to 20% of my gross income in this area. I got hit hard during the recession, but it’s coming back nicely!

Everyday Spending: This is one area we use to really win at (being frugal and all), but kid’s sports, and other needs has had this number slowly rise over the last 5 or so years. We have been going thru a bit of a lifestyle creep for our kids. But at least our kids are happy… Our cost are still far less than the average though!

Number of Earners: For the past 9 years, it’s been primarily me, but since my daughter started kindergarten, my wife now works a side job for about 6 to 8 hours per week. She works mainly to keep her skills fresh. Since it’s not critical, the job she works has a high degree of flexibility.

Hours Worked: With my wife working now, we still work less that 50 hrs a week, but definitely more than 40.

Education: Both my wife and I have college bachelor degrees. I play around with the idea of going back for an MBA, but so far, I’m too busy.

Free Time: We are fortunate that we have an adequate amount of free, but busy time, no big complaints here.

Household Net Worth: I don’t think this number is for the average 4 person middle class family… When compared to a similar socio-economical family like ours, we are higher than average. Hopefully in the near future our spread will continue to expand, since we are totally debt free (no house mortgage).

Debt: I have no debt (credit card, auto or mortgage) at this point in my life. I’m actually surprised that the payments towards debt is only 18% of the disposable income! I was thinking the percentage would at least be over 20%.

Well, they you have it! My assessment for how I’m going verse the average middle class American! Overall, I’m very happy with our progress. In fact, I believe we are going better in every area above, at least in a positive sense (for example, our hours worked isn’t over 70 per week, and I view that as very positive).

How are you doing, do you have any weak spots with your financial armor? Are you developing a plan to rectify any deficiencies? Reading personal finance blogs helps, on my home page, check out my Yakezie links in the sidebar to the right, it’s under “Best of MR”, I’m sure you’ll find someone that was in the same situation you may currently be in.

Enjoy the weekend!

-MR

15 comments »

Posted in lifestyle, Social Class

Tags: middle class middle class 2010 middle class assessment middle class benchmark middle class checkup middle class lifestyle middle class milestones