Weekly Review – March 30, 2008

This week has been a quiet plodding type of week for me. There have been a lot of projects that I haven’t really managed to make great headway on but there has been some forward momentum. The redesign for this site is mostly into wordpress though I got side tracked upgrading my computer which delayed me a bit. The plodding along is part of the fact that although some work has been done it hasn’t been as consistent as I would like. Staying focused on the goals at hand has been my challenge lately but even with the slow plodding there is progress forward.

Financially this week was very much like the last few without much change, I’ve managed to stay out of fast food places and restaurants for the most part. This required a little self control but it’s been getting easier. I guess that’s what happens when you start changing habits, there’s a period of adjustment that needs to be gone through. The next big step will be to review all of my spending for the year so far and to properly prepare for the Snowflaking experiment.

All in all this week hasn’t been good nor has it been bad; I wish I could be more productive but sometimes that’s life. You have to roll with the punches and keep everything in perspective even if it means you have to plod along.

Some posts that caught my attention this week:
Managing Urgency – Seth Goodin
Is Success a Choice – The Simple Dollar

Quick update for tomorrows post – because I want to be accurate in my goal for April and the Snowflaking experiment I’ll be a bit late in posting my assessment it’ll be up in the evening rather than first thing in the morning.

Car Maintenance: Spending to Save

Spending money to save money sounds like an oxymoron but when it comes to car maintenance it really can save you money. There are a few very obvious ways that it can save you money such as reduced gas and maintenances costs as well as increasing the life of your car. These alone can make it worthwhile even if it seems like more of a hassle initially.


Originally from Flickr, uploaded by MadMan

Gas Costs

If you keep your car well maintained you get much better gas mileage out of it; especially if you do this over the life of the car. Say get 10% better gas mileage and have to fill up 9 times where you would normally have filled up 10 times. This savings seem very small but over the life of the car they’ll add up and will save you more than the cost of the maintenance.

One thing I’ve noticed with car maintenance on the cars I’ve owned, typically late model used cars, is that the improved gas mileage is far better than the 10 I mentioned. Cars that are beat up and not taken care of simply done run all that well and they have a tendency to break down which leads us to the next means of saving

Maintenance Costs

When your car breaks and needs repairs it costs a lot of money probably more than you were expecting or want to pay. Very often these repairs can be avoided by proper maintenance of the car. If you can avoid a single major repair to your car you’ve probably made up the cost of the maintenance if not a lot more. I’ve had a few cars need some major repairs, which could have been avoided with proper maintenance (the main one that comes to mind was courtesy of a previous owner). The worst part about car repairs is that we rarely expect the costs and have to dip into emergency funds or credit cards. If it’s the latter than the interest on those cards can really make some maintenance that much more worthwhile.

Extending the Life of your Car

Unless you happen to have bad luck with cars proper maintenance can extend the life of your car considerably. Even if the only thing you accomplish is extending its life by one year you can save a mountain of money. Lets assume you pay $400 a month for your car loan, by extending the life of your car for an extra year you won’t need to pay that amount for a new car as quickly. Over 12 months that $400 per month savings adds up to $4800. If you spend $1500 in maintenance costs over 5 years (and the car lasts you a 6th as a result) that savings is quite significant.

I know I’m using some hypothetical numbers but I think they illustrate the point rather well. Cars are very expensive to have especially if you’re paying lease or a loan on them. By removing the need to buy one for a year or two due to some diligent maintenance think of how much money you could save.

Also if you have an older car there’s a chance that your insurance premiums will go down. New cars tend to cost more from this point of view so that hypothetical $400 a month could easily be $500 with those premiums.

Some Extra Benefits

The obvious point that comes to mind is that maintaining your car in good shape can prevent you from having an accident. Accidents cause you hassles, cost you money, and worst of all they can cost lives. I know that this is a bit of a stretch but accidents do happen because of worn tires and bad breaks and those are preventable.

Car maintenance is something I know a lot of people avoid because it costs money and half the time it’s inconvenient. But the hypothetical numbers I used add up very quickly to significant amounts. Personally I would rather use that extra money to reduce or completely remove the next car payments. Keeping your car in good condition simply makes sense from a financial point of view, not to mention the benefits to the environment.

What is Snowflaking?

I’ve been hearing a lot recently about snowflaking and although I understand the idea behind it I’ve never really looked into it. I wanted to learn more about the idea and to see if there was any real merit behind it.

The idea of snowflaking is pretty straightforward in that any extra money that you save or make is applied to a financial goal right away regardless of the amount. Paidtwice has some great articles about snowflaking and this is where I learned a great deal about it:

Snowflaking a Primer
Five Golden Rules for Snowflaking
Here a Snowflake There a Snowflake

The concept is pretty simple in that you have to keep track of your money and your spending and anything that you save gets applied to a financial goal. This also goes for any extra money that you happen to make. Over time these small amounts really add up quickly. If you buy a latte from Starbucks for say $4 a day that adds up to $1,460 over the course of a full year. Most of us completely ignore that $4 and continue with our lives. The snowflaking idea is in principle very simple and it should work.

I’ve done similar things in the past where I have set aside small amounts regularly over a period of time to find that it very quickly added up to a significant amount. I can see a problem with the concept in that you have to keep a very close eye on your money to make it work. Keeping track of extra money that you make is pretty simple but all the money you don’t spend is harder and unless you’re diligent you might lose track of it.

Personally concepts can make sense but how they are applied really makes the difference if the idea has any real merit. To find out if snowflaking is a good idea for me or where there might be some issues with it I would need to put it into practice. In the month of April I’m going to test out the concept of snowflaking to see the ins and outs. All of this will start with making sure I have a detailed budget in place for the 1st of the month at which point I will apply the snowflaking idea for the 30 days following.

Trying an idea out is the best way that I know if it really works, or more appropriately how it works for me. I already know that snowflaking works great for a whole bunch of bloggers but I can see myself having some issues really applying it. This test will give me better ground to stand on when it comes to forming an opinion about it. I’ll post my results and then an assessment at the end of April. Wish me luck and if you’re interested have a read through Paidtwice’s posts they’re very informative.

The Cost of Holiday Travel


Originally from Flickr, uploaded by John Wardell

With Easter just past I’m sure many of us took the trek to see family and friends to have some fun. Even if the drive is across the city there is some travel that as done to get there and unfortunately all of that travel has a cost. When we’re not really prepared for this that cost can make us dread the holidays even more than seeing those relatives we would much rather avoid.

Some holidays are more expensive than others (Christmas takes the cake on that) but that doesn’t mean all the others are that much cheaper. There are many hidden costs that creep up especially when it comes to the travel. With relatives living out of town you end up packing the kids into the car and driving to see your parents or grandma. The cost of the extra gas alone can make some people cringe.

Planning for all of these hidden and unexpected expenses can really help you out. Here are a few things that we did this time around to cut down the costs:

  • Pack snacks rather than stop at fast food joints
  • Keep splurge spending in check
  • Take some leftovers (it can cut down your food bill the next week)
  • Set aside money for the spending
  • If you have kids plan to keep them occupied

Holidays can be a great time to catch up with friends and family you haven’t seen in a long time but it can also be stressful. Remember to pause and enjoy the time. Take stock of things, see how others live their lives and create yourself some memories. Plan for the trip so the hidden costs don’t surprise you.

Weekly Review – March 23, 2008

Ever since I started blogging I’ve noticed that a lot of people drop in a post once a week giving an update about the week and some links that caught their attention. I’ve always wanted to do this but whenever it came down to it I forgot about the posts from the week that I wanted to write about. I was thinking about this for the past few days and I think that although the weekly links are a great thing they don’t necessarily need to be there. I want to start writing a weekly review not only including links or what happened in the PF community that week but also to include a ‘Me Report’.

I try to put a little bit of me into every post that I write but any week I might not really say what’s happening with me because it’s not relevant. This will be that forum. This is the miscellaneous stuff that floats around all week from links to short trivia.

This week was a good one since it was a shorter week thanks to our long weekend. Unfortunately that also meant less time to work on a few projects I’ve got going including the updated design for the site. I’ve got the design generally complete I’m just in the process of creating a word press template for it. It’s progressing and it’ll continue to progress after this post is up 🙂

The holidays were nice since we don’t get to see all of our families all that often. Kids grow a lot when you’re not paying attention to them. And for those really curious people yes I got leftovers from all the dinners so I’m set dinner wise for a day or two.

On a complete side note – the state of the economy actually made the dinner table talk this holiday, which was a big surprise. I guess people are more worried about it than I thought.

I had a guest post on Ramit’s blog, I Will Teach You To Be Rich, which was an amazing experience. I’m going to see if I can get a few more guest posts out there it was a lot of fun.

Happy Easter Holidays

I hope everyone is enjoying their Easter holidays. By the time you’re reading this I’ll probably be through one or two big dinners enjoying myself immensely. Although I take the time and spend Easter with family this in reality is the one holiday that baffles me. I am a non-religious person, by choice, and for me this is the one holiday that is more of a religious holiday than anything else. I understand its significance for some people but it doesn’t seem like a universal holiday like Christmas or a secular holiday like Labor Day.

Regardless I hope that everyone gets the opportunity to enjoy their time off and has some time to spend it with family. Even if you don’t celebrate the holiday there’s nothing wrong with a good excuse to catch up with family and have some good food.

And if you happen to have family traditions such as Easter egg hunts… don’t hide the chocolate eggs in places that will keep them hidden for years to come. Let that chocolate be eaten!

Be Realistic About Big-ticket Items

BMW

Have you ever wanted something so much that you were willing to spend more than you could afford to get it? I’m pretty sure we all have and with the average consumer having as much credit card debt as they do I think a lot of us have indulged a little. Its one thing to indulge $100 for a pair of pants on a credit card and another to buy a brand new car while you’re making minimum wage.

The purchase of the TV this past weekend really got me thinking about purchasing the bigger ticket items. I know that I’ve run into the big-ticket items in my past that I wanted but couldn’t really afford. In the case of the TV it wasn’t so big that we couldn’t pay for it outright, but much bigger and we wouldn’t have been able to. You have to be realistic about life’s bigger purchases because wanting it doesn’t mean you can necessarily afford it.

When you’re faced with a big purchase like a brand new car you have to be realistic about the purchase even though it’s hard. Cars and houses are great examples since they are so incredibly expensive few of us can buy them for cash. We had the opportunity to buy a cottage a few years back at a great price. We had most of the down payment and we could have almost afforded the payments. The reality of it was that there was more there that we weren’t considering because we really loved the idea. Being realistic about a big purchase like this can be hard but you have to do it! We were trying to be realistic but we were still being clouded by the thought of the purchase.

The best thing to do is to take the emotions out of it. I know this is easier said than done, but if you let the numbers do the talking then you’re more likely to keep those emotions clear of your decision. If you have the luxury of time you should try the payments out for a couple months. Pretend as if you had made that big purchase and set the money aside. In the case of our cottage I think we would have very quickly realized that it was more of a pipe dream than a wise decision. Buying a car or a new set of kitchen appliances can be very similar.

Think about the decision as rationally and logically as you can. If you have to seek some advice from an impartial person then do it but by all accounts don’t make your situation worse as a result of the purchase. We’ve all been hearing about the mortgage crisis and all those houses being foreclosed. I’m sure each case is unique but I wouldn’t be surprised if a lot of those people were buying homes that they weren’t realistic about and couldn’t afford.

The hardest part when you’re looking at big purchase is stopping and forcing yourself to think about it from a rational point of view. We can all see ourselves driving that new convertible or imagining what we’ll do with all the extra rooms. Be realistic about the big-ticket items you buy so when you do buy them you own them and they don’t end up owning you. As a side note, in hindsight if we had gotten that cottage our financial situation would have been very bleak right now so I’m glad we ended up not getting it. There will be other cottages in the future.

A Big Purchase Can Be a Good Thing


Originally from Flickr, uploaded by Alan D

Most people really start shying away the moment bigger purchases are involved. Understandably so there is a lot more money involved in a big purchase of say a TV than there is in buying a can of soda. We all like the big expensive purchases but we don’t like to make them. This past weekend we made just one of those purchases, we bought an HD TV.

Before anyone has the opportunity to say anything this was a purchase we were thinking about for a while. I was actually contemplating it for over a year. At that time the prices of HD TVs was way too high and the purchase was out of the question. This time around when we were at Best Buy looking around; it turned out that the prices had dropped quite considerably and we ended up purchasing a TV (32” flat screen with HD).

The purchase itself wasn’t too expensive though there was a very expensive cable that came with it (an HDMI cable, which we’ve yet to use) and we’ll need to buy an alternate TV stand but that isn’t immediate. The biggest impact and why a big purchase can be a good thing for me is the huge space savings we’re getting by going form a 32” tube TV to a flat screen. I am truly amazed by it. We can shrink the TV stand/wall unit in half width wise!

There is one additional benefit from all of this and that is I think with the thinner TV the price of the house might just have gone up. No the TV isn’t staying when we move but it creates the impression of a lot of space where before the living room looked very cluttered and narrow. I think that impression of space might make a huge difference when it comes time to sell.

On a final note, I really enjoyed the Best Buy experience there was no pressure to buy, the person we talked to was very knowledgeable. Not to mention we were given HD cable for a year for free with out subscriber and Best Buy has price matching. Overall it was a very pleasant shopping experience and the TV looks great, I didn’t think HD would make that much of a difference.

Happy St Patrick’s Day

Happy St Patrick’s Day everyone! And welcome to all of the I Will Teach You To Be Rich readers. I was lucky enough to have a guest post over at Ramit’s blog!

I’m sure some of you have noticed that I have been a bit absent over the past few days. I wanted to give everyone a bit of an update as to what’s going on. At the beginning of March I took a contract through a company that I started up towards the end of February. The net result is that I’ve been a bit busy. Unfortunately this site has had to suffer a little as a result because I wasn’t prepared for the sudden change.

The contract is beneficial for me since I am learning a great deal while making some money. It does slow down a few things like this blog and a couple side projects, which has really weighed heavily on my heart. I have wanted to keep things running and I even managed to get a new design for the site completed though not in place yet. I enjoy this blog and it’s important to me so I’m going to make sure to put first things first and keep it up. The design is now finished in my mind I just need to translate it to WordPress, hopefully everything will be finished before Easter weekend. I hope you guys like it

Book Review – The Procrastinators Handbook

Like it or not you procrastinate, some of us do it more than others but we’ve all had those moments where we procrastinate. For some people this is a serious problem where they essentially do nothing with their lives and in the end they don’t even know why they didn’t get off their butts to do something about it. Rita Emmett wrote the Procrastinator’s Handbook for anyone who procrastinates and let me tell you this little book is power packed. I’ve read The Procrastinator’s Handbook a couple times now and I enjoyed it just as much the second time around as I did the first.

The book has a great flow to it and Rita uses a lot of examples. These examples are down to earth examples that most people can relate to very easily. I picked up a great many tidbits from the book the first time I read it and I gladly refreshed my memory the second time around. There were a few things about The Procrastinator’s Handbook I really liked:

Fears: Rita doesn’t only give tips and suggestions for stopping our procrastinating ways but she also looks at some of the reasons we procrastinate in the first place. The fears section of the book really makes you stop and think about why you’re putting something off. Having this information is vital, in my opinion, to getting over some of the procrastinating elements.

Clutter busting: Long time readers will know that I’ve been on this kick with simplicity lately and I think that a lot of it stems back to when I first read The Procrastinator’s Handbook. The clutter busting suggestions made me stop and start getting rid of the junk around me that was weighing me down more than anything else.

Tips: This book is filled with tips and suggestions. Not only that there are exercises throughout the book that will make you stop and think about why you’re not doing that task. I think this book would be a great compliment to other productivity books out there.

I highly recommend this little book. Rita has taken her experience and turned it into an easy to read book that can help pretty much anyone. The Procrastinator’s Handbookis a quick read but full of information. I’ll probably re-read the book at some point in the future.