Category: 12 Money Tips

This morning, I was reading this article titled “What are your REAL savings?” and it reminded me a lot of my weekend.
On Saturday, I spent most of the morning, into the afternoon looking for a bike. In the morning, I went up to the swap meet. They had some decent bikes there, but nothing I was quite in love with (except for maybe the one that guy had already bought). Next, I went over to City Bikes, where I really loved the Specialized Tricross Comp, at the bargain basement price of $2000. Sweet ride though, fast, and I couldn’t feel any of the gravel under the tires at all like I could with some of the other bikes. I also stopped by Big Wheel Bikes to test ride some others. In the end, I was really no closer to making a decision than I had before, so I kind of felt like I wasted a few gallons of gas and 4+ hours of my time looking for a bike.
On Sunday, we went out hunting for new Crocs for Ellie. She wore the treads off her old ones, and she wanted the Mary Jane style, in pink, size 10/11. A couple of places had the Skechers version of Crocs, which were not quite right. Other places had plenty of Crocs, but either not the right size or not the right style. We looked for probably a good hour and a half in the mall trying to figure out which store might have them until we stumbled across the fact that Hallmark carried every style, size and color you could ever want. As a bonus, they also had every Disney Princess Jibbit that Ellie wanted too. So we did finally get what we needed, but I couldn’t help feeling like it would have been easier and less hassle to just order them over the Internet and have them delivered.
Were those trips worth the time and effort? Judging from Ellie’s giddiness at her new Crocs, that may have been worth it, but it also would have been just as gratifying if we had never taken the trip and ordered them. Test riding the bikes did give me a little more insight as to where I am willing to make compromises when it comes to speed and comfort of a bike, but didn’t get me much closer to a decision. Before I go out on any more test rides, I really need to decide where my priorities lie (and what my budget is!) so that I can be better prepared in the store. At any rate, I’m certainly going to think more about what it’s costing me to make these trips in the future and whether they are truly worth it.

As a year-end wrapup, I present to you the many ways I made extra money for myself this year.
We filed our taxes early, as usual, this year and got a nice refund. Instead of blowing it on something silly, we plunked $2500 into starting our emergency fund.
I realized that I had not updated my IRS withholdings lately to reflect our latest family situation, so I sent that in to my company. I was still conservative in the changes I made, and it got us and extra $140/month, which is better than giving it to the IRS for 12 months.
We started regularly feeding our emergency savings account, which is an HSBC Direct Online Savings account. This earned 5.05% for most of the year, which is way better than our regular credit union’s rate of 1.something%. We earned more in interest in the first month than we had all last year. Later on in the year, when the Fed cut rates, we were able to lock some money in a 3 year CD at 6% from Pentagon Federal Credit Union.
I got a surprise bonus in May, which also got put right into the savings account.
We refinanced our house in June. This allowed us to skip our July mortgage payment of $1800. We also reduced our payments to about $1500/month by taking our property taxes into our own hands instead of doing the mortgage company’s escrow. They always seemed to underestimate us and we ended up paying extra every month to make up for it. Obviously the difference went into our savings and will be used for the taxes.
We cashed out a good chunk of change on our refinancing, which we planned to use for getting new windows and redoing our bathroom. While we waited, the money earned some extra interest for us until we needed it. Getting our windows done this year will also allow us to take advantage of the last year of tax credits for energy efficient upgrades, about $200.
Started bringing my morning and afternoon coffee. Even at $8-10 for a bag of the good coffee, that covers a week’s worth of afternoon coffees made by someone else. I also drank water instead of soda with lunch.
Switched to Sunrocket VOIP. We paid $199 for 15 5 months of service from Sunrocket. I also got $80 back from CrazyRefund.com. The combined savings was $17/month before long distance charges. We did spend part of that savings by switching to FIOS for a faster and more stable Internet connection though. We eventually had to switch to Verizon’s VOIP, VoiceWing, in July, which runs $19.99 plus taxes for 500 minutes, more than enough for us.
I had my vasectomy in June, just before our new health plan kicked in. You’re probably wondering how this saved me money. We had already used up our deductible for the year after Evan was born, so I was fully covered and paid a small amount rather than pushing it into July and having to start our deductible all over again. As a result, I paid $76 for the procedure instead of nearly $800.
I opened a Citibank “Ultimate Savings Account” with a $5 deposit and got $100 bonus, no strings attached. The rate is actually decent, 4.6% or so, and they have ATMs in every 7-11, so I may actually keep it around for travel cash purposes.
We rearranged our checking accounts so that we have a bill paying (and interest earning) account, and a regular grocery, gas, etc account. We didn’t earn a lot of interest, but anything is more than $0, and it’s also helped us keep track of our spending better.
I finally got a “rewards” credit card. It only gives me 1% of each transaction, but it’s better than nothing. The rate is also better than my old non-reward credit card. Plus, since the card is issued by the same credit union at which we have our checking account, we can use the card all the time for points, then just immediately transfer money from our checking account to “pay” for what we just bought.
We got rid of a bunch of stuff on Craigslist in a cleaning binge, which also allowed us to declutter a bit while making some cash as well.
Here’s to making the most of 2008!

This year has been one of many financial goals. The ultimate goal is to get everything to the point where I don’t have to think about where the money is going, or whether we’ll have enough at the end of the month. We’ve made a lot of progress toward that goal throughout the year: refinancing our mortgage, tracking finances with Yodlee, and automating and maximizing our savings.
Recently, we took our organization a step further, and implemented a sort of Stackbacks budget system. As the creator says “This budget system is based on a simple idea… You shouldn’t have to think about your budget. Figure your budget out once, not constantly. I want to pay my bills on time, reach my financial goals, and have money I can spend without worrying about it.” Ding! Sounds good to me, how do I do it?
For us, it took a while, but we are doing it and liking it.
Back in March, we opened a high-yield savings account with HSBC Direct. We started feeding an emergency fund with a bit of each paycheck, having it direct deposited, so we never saw it even pass through our main checking account, and thus were not tempted to spend it, or use it to cover an overdraft. Then, in June, HSBC introduced their online payment account. It was easily linked to the savings account, and didn’t cost anything, and pays 2.5% interest, so I went ahead and opened it, while somewhere in the back of my mind, I thought it would come in handy sometime in the future. My wife was still wary though, since the account didn’t come with paper checks, and had no branch access to speak of. So I didn’t really do anything with the account for a while.
Then I discovered Stackbacks and the 4 week challenge to mastering your budget. I was intrigued and read the steps:
Step 1: Open a new checking account. Did that with the HSBC payment account.
Step 2: Identify your planned expenses. I put together a spreadsheet that listed out all of our big expenses and their due dates. Yodlee helped greatly here, as did signing up for our utilities’ budget payment plans.
Step 3: Control your cash flow. As the creator of the system mentions, this is the most crucial part, and the hardest for us to get through. What I did was to set up my direct deposit to have enough money deposited into the HSBC payment account to cover all of the expenses I listed in step 2. Then I set up online bill paying from that account, and scheduled the transactions to get entered into Quicken, and automated their payment. I moved the emergency fund to Presidential Bank’s savings, so that we wouldn’t be tempted to dip into it. And the rest of the money would go to our regular checking account, which would be used for things like gas, groceries, etc.
Step 4: Manage your budget. It would be easy to think that your job is done, but this is the part we are working on now. The easy part is paying and reconciling bills. That is mostly automated now. But we do still need to check up on ourselves and make sure we are not blowing a lot of money on things we don’t need. If we start doing things well, we should find ourselves with some extra money at the end of each month that we can start using for things like vacation funds, and college savings. The key thing we have left to do is to give ourselves an “allowance,” rather than just dumping everything that is not a bill or emergency fund into this account. Doing that will just perpetuate the cycle of living paycheck to paycheck, you’ll just be better organized when doing it. So we’ll keep an eye on how much we’re spending on living expenses, with the goal of increasing the amount we’re saving each month. So far, we’re not doing great on this front, because I stupidly forgot that my curling membership was coming due (almost $500 unplanned expense there), and we had a couple of other unplanned things pop up. But we’re working on it, and hope to get things smoothed out in time for the big expenses of the holiday season.
It took some effort, but we are pretty happy with the way things have turned out. We’re no longer spending money on stamps, or forgetting to put bills in the mail. We still have our local credit union account, so we can still write paper checks if needed, and get free ATM withdrawals for spending money. Best of all, we don’t have to spend nearly as much time fussing over the budget.