Thursday, March 30, 2006

Credit cards with the best rewards

I'm in the market for a new credit card that gives better rebates. I know that many people think they are terrible and for many people they are terrible. But, I consider myself a fairly responsible user. I've never carried a balance on a credit card. When I got my first card, my parents gave me a handy tip: when you charge something, write it into your check book ledger so you know it will always balance.

Today I mostly use cash, but I have a number of automatic bills paid through my credit card. I figure that they're bills I have to pay anyway, so why not get some cash back?

My current plastic is an MBNA World Points MasterCard. I recently cashed out some of my miles for prepaid cards and received a $100 card for every 12,000 miles, which is a reward rate of 0.83 percent. Not terrible, but I want to do better.

That's why I read with interest an article from Kiplinger's Personal Finance on the best credit card reward programs. It looks like the Chase Rewards Plus Visa is the card for me. Hat tip to Inchoate Random Abstractions in the discussion on MyMoneyForest.

Anyone have a better suggestion?
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Wednesday, March 29, 2006

What's the best book on personal finance?

I recently purchased an mp3 player and received a trial membership and two free book downloads from Audible.com. I'm almost finished listening to Freakonomics and am thinking about what I want to download next. My question to you is: what is your favorite book on personal finance? Leave your answer in the comments below. Thanks.

Tuesday, March 28, 2006

More budget cutting

When we set aside our budget cutting yesterday, we had looked at gym membership and house cleaning service. We quit the gym and cut back on the cleaning service for a total monthly savings of $87.98 and an annual savings of $1,055.70. Today, we'll look at a few more line items and see how much we can save.

The next one I'd like to look at is not new to most personal finance bloggers, but it's an easy one. Dave Ramsey's budget form lists it simply as hair care. A few months ago, I started cutting my own hair with a set of clippers. Monthly savings: $20, counting debt retirement: $21.40, annual savings: $256.80.

There are a couple of reasons why this works better for me than some. First of all, I have a receding hairline. Because of this, I simply put a #3 attachment on the clippers and cut my hair by myself. My wife usually has to spend a few seconds on the spots I missed, but it doesn't take much. Second, the really nice girl who was cutting my hair got married and moved out of town so no one's feelings had to get hurt. When she left a few months ago, I took that opportunity to become my own barber.

Unsurprisingly, I am not the first person to come up with this idea. In fact, my mom cut my hair (and the hair of my two brothers) while we were at home. Personal finance bloggers have also picked up on this opportunity to save money. The author of MyMoneyBlog started letting his wife cut his hair a year ago and he's saved $250. Contrary to what you might think, this is not limited to men. Mapgirl cuts her own hair and saves $35 per time. (Somehow I don't think I'm going to get my wife to go for this one). If personal finance bloggers are representative of the broader public, I would avoid investing in hair salons and start investing in hair clippers.

Next, I looked into potential savings on my automobile insurance. While talking to our insurance agent, the only option available to us was to increase our deductible. We can save $20 per month by increasing our deductible from $100/$250 to $500/$1,000. I'm thinking that's probably not worth it because one accident would wipe out more than one year's worth of savings. In addition, we're probably going to have to buy at least one new car in the near future so I'll sit on this one for now.

As for other insurance, one of our largest costs are health insurance premiums, which are taken directly out of my paycheck. Nothing we can do to decrease that cost, but this year we did start taking advantage of a flex spending program available through work. We put $30 per week of pre-tax income into a flex spending account that totals $1,560 for the year. In the 15 percent bracket, that is a tax savings of $234 for the year, $250.38 when accounting for debt retirement. Total monthly savings: $20.87.

While we're on the topic of healthcare, let me tell you another way we have saved money in the past. When we had our last baby, we were given the opportunity to get a 15 percent discount on our total bill if we paid before we left the hospital. Most hospitals will probably be open to this because collections are such a pain for them.

We have $500,000 in life insurance on my wife and I that we got a few years ago at a good rate, so there's no room to cut there.

So, add the savings from cutting my own hair to the flex spending account and you have a monthly savings of $42.27. Add that to yesterday's monthly savings of $87.98 and you have a total monthly savings of $130.24. My total annual, savings after looking through a few line items in my budget, is $1,562.88.

Tomorrow, I will be terrorizing my phone/internet/cable provider. I've done my research, taken some advice from a fellow blogger, and will be going for some discounts. I'll let you know how it goes.

On another note, I went to AnnualCreditReport and pulled my credit report using experian. Good news. experian found 0 potentially negative items in my report and I didn't have to contest anything. I decided not to pull all three like MyMoneyBlog, electing to save the other two for later in the year. That's enough for today. I've got a Dave Ramsey podcast to listen to.

There are more blogs on personal finance?

Yes. Hundreds more. Luckily for you, they're all in one place: PFBlogs.org. There, you can find such engaging blogs as Stop Buying Crap and Money Dummy. Yours truly is number 456. I can see myself spending WAY too much time here.

Book Blogging

On his radio show, Dave Ramsey often sites a book by Dan Miller called 48 Days To The Work You Love. He recommends the book because he believes that people will be more successful if they're doing a job that they enjoy.

Well, one of the things that I enjoy is reading. But you can't make money doing that, can you? Actually, it turns out that you can. I came across an interesting new book that was relevant to the topic of another blog that I write for. I emailed the publisher to ask for a review copy...and you know what? They sent me one.

I read the book, reviewed it on my blog, included an Amazon Associates link and got paid $1 for every book that was purchased at Amazon. Then, I sold the book in Amazon's Marketplace for $13.5o.

My total take on the thing was only about $15, but it was a book that I wanted to read anyway. So, instead of paying $20-$25 to read it, I earned $15 by reviewing it. By my math, that's coming out $35-$40 ahead for minimal extra work.

Are you a blogger? Is there a newly released book that you want to read? What's the worst they can say? Go for it!

Monday, March 27, 2006

Pruning your budget

I'm sure you've heard the saying "It takes money to make money" hundreds of times. Well, just because you make a lot of money doesn't mean that you have a lot of money. The only money you have is what you don't spend (and the government doesn't take).

I make decent money, but the struggle for us has always been having enough money at the end of the month to save, invest or pay down debt. At times, it seems like the only money being saved is what comes directly out of my paycheck (you gotta take that employer match).

Anyway, I've been listening to Dave Ramsey a lot lately and what I've heard there was reinforced by what I learned from The Millionaire Mind. They have influenced me to start going through my family's budget to see where we can save some money. We started with the budgeting forms on Ramsey's website and got on a written budget that we're following.

Once we wrote down our current budget, we realized why we weren't saving very much money: there wasn't much money left over at the end of the month. So we started going through the budget line by line to see where we could cut.

The first line to meet our scrutiny was an expensive gym where I was a member. It was good and worth the money, but expensive, so I quit it and started looking at other options. I was honest with them, told them I liked their facility and hoped to be back in the future, but could not afford it at this time. You know what they did? They took pity on me and gave me a punch card (in return for filling out an exit survey) that gave me five free visits. Honesty is often the best policy.

First of all, if you're considering a change in your gym, you might be rewarded for doing a little research. For instance, I checked with my health insurance provider and they have a 10% discount at a different gym. With that discount, joining their gym would save me about $25 per month or $300 per year.

I also called the local YMCA, where I was a member for years. Membership at the Y was a little more expensive than the other gym, but they have a discount if you're willing to volunteer your time as a basketball referee or coach.

There may be other opportunities for you or in your town. In college, I had a friend who took a part time job at a gym so he could get a free membership. The point is that you might benefit from taking a creative approach to saving money on this line item in your budget. I ultimately decided to not join any gym over the summer and have started running, biking and doing sit-ups and push-ups. It's saving us $69.50 per month which is $834 on an annual basis. If that money is used to pay down debt (which it will), it actually saves us $892.38 annually because we won't have to pay interest on the debt we retire. That's real money.

The next line item we looked at was the cleaning lady. We have young children that my wife stays home to care for, so we have a cleaning lady to make our lives a little more sane. I'd rather have my wife spend time with our kids than on her hands and knees cleaning a toilet. Funny thing, she agrees with me. However, we decided to cut back the amount of time that she cleans. We will end up saving $12.72 per month, or $152.64 per year, $163.32 counting interest that won't be paid on retired debt. We will keep the cleaning lady until the kids get old enough to help out around the house more.

So, after looking at just two line items in our budget, we have saved $1,055.70 on an annual basis. There are dozens of items left to go and I can't wait to attack them. Stay tuned for more budget pruning in the near future and leave any tips in the comments section that you have from your own experience.

Sunday, March 26, 2006

Do you have the mind of a millionaire?

I just finished listening to The Millionaire Mind, the follow-up book to The Millionaire Next Door by Dr. Thomas J. Stanley. Listening to the book influenced both the creation and the theme of this blog, for Dr. Stanley says that the typical millionaire is both productive and frugal. They work hard and take calculated risk to make money, but they also do things like reupholster furniture and shop with coupons in order to make their money go further. Every post and link on this blog will be dedicated to at least one of those two goals:

1. Increasing your income
2. Making your money go further

By the way, instead of buying this audio book, I went to my local library and checked it out for free. You might be surprised what you can find at your library if you stop in for a visit. Dave Ramsey is fond of saying that the average millionaire reads one non-fiction book per month. What have you read this month?

Wanna save and make some money?

Me too. That's why I started this blog. I've been trying to find ways to extend our family's income by making and saving money. Most of the opportunities I've found have an online component, but I couldn't find a central clearing house for those opportunities.

That's what this blog will be. As I find new opportunities to save or make money, I'll post them on the side or blog about them here. All so you can take advantage of them as well.

Also, I'll be posting tips to save money or increase your income as I come across them. For starters, see the Google Adsense links at the top of this blog? I'm here to make money as well. In fact, if you click on the affiliate link on the side bar and add Adsense to your blog or web site, I'll get paid $100 when you get your first $100. Not bad, eh? A little further down is a link to download Firefox. Do that and I'll get a dollar.

So stay tuned and come back often. I'll do the leg work and find opportunities to Show us the Money!