Personal Finance QuickTake: Tax Rebate - Senate Version

The Senate version of the stimulus package is too complex and apt to have even more added to it over the coming days. This according to Treasury Secretary Hank Paulson.

The Senate lowers the rebate to $500/$1000 from the House $600/$1200. It does increase the recipient count though buy adding 20 million seniors that were not going to get anything under the House Version. It also raises the maximum income level to $150,000 for individuals and $300,000 for couples.

The interesting thing was that it showed that higher income families were less likely to spend the rebate and to put it into savings...this is opposite of a trickle down theory...It would be interesting to see the data.

Any-who, this still has to go to the floor and be pork-ified as well. Frankly, I believe the only hope to get these by May-July is gone unless they get it done fast. This is because the next step is to get it into committee to hammer out the compromise. The more difference in the bills the longer it will take.

Christmas Cash?

(Photo Reuters)

You Need to Develop a Success Map

How many of you have paid off all of your debt before, only to say "Never Again" and then few years later do the same thing? I have. Not to the level I am working towards now, but multiple times I have worked for a bit until I paid it off and then went back to how I charged before!

What's worse is that each time its a bit deeper, isn't it. Well the Credit Card Companies raise your credit line since you paid it off! This becomes a vicious cycle. If this has happened to you before, or it you don't want it to, I suggest you put together a Success Map.

If I look back to all of those times I paid it off just to recharge again, there is one thing that happened each time. I thought I had reached my goal...heck I did, but I didn't reach my end-goal just a stage-goal. This is why I say often that Budgeting is a lifestyle, not a prison sentence to be hopefully paroled from!

This is were I really like Dave Ramsey's Baby Steps, or other guides that help you plan out what comes next. First, you really have to have your goals together. Is it buying a house? Saving for your kid's college? Retire early? Buying your own business? It doesn't matter, but you need to plan for it now, before you have paid off your debts, because you need to apply that same drive and moxie that killed those debts to the next project.

For us here it is:

1. Emergency Fund - Done
2. Pay off all consumer debt - In process
3. Save 6 months expenses -Next
4. Fully fund Retirement accounts - up to 15% of gross
5. Pay off house
6. Invest all available funds
7. At $1 Net Worth -Buy own business

You can go to step 10 or beyond, my brother is a planner like that, but the point is to have a plan for what to do next. If you don't, you could be restarting the process at step #1 all over again, and each time it is a deeper hole to get out of, with less time to do it.

So set your plan up soon if you don't have one and make sure that you review your goals frequently enough that they still match where you want to go in life, before you get there!

Personal Finance Carnivals and Good Karma Blogs

Quick Post to let you know Life, Liberty and the Pursuit of Money is featured in some great Carnival's currently running. The great thing is that you don't need any ticket, just the included links!

• Carnival of Living Cheaply is running at 2Paupers with a ton of great stopries that can start saving you money today!
• Cavalcade of Risk (Think a Carnival with Knives...kidding) is running at The Digerati Life. SVB has done the ordinarily totlaly amazing job pulling this together.

I can't thank them enough for including my posts in the mix and if there is anything I can do for any of you post-wise let me know!

Also I have been expanding my reading sphere lately and as I am sure you know that there is some great content out there and I encourage you to check them out!

Personal Finance QuickTake: Fed Cuts Rate 1/2%

At their regular scheduled meeting today the Federal Reserve made another 1/2 point cut. The market reacted by jumping 200 points only to fall back down.

The Fed also made it clear that they will continue to make cuts in order to stimulate the economy. This cut follows the surprise 3/4% cut that just happened.

Dual edged sword here, the cuts will mean that anyone with a rate pegged to the Prime Rate will see lowered interest payments (nearly all credit cards). Mortgages and refinancing should go lower, although they are balanced out a bit by demand as well as how fast the Treasury Ten-Year drops.

The downside is that 4 is the new 5...Until rates go up we won't see a lot of 5% Savings deals, unless it is a lockup or new customer offer. Also CD offers will continue to go down.

Basically the government wants us all to spend our way out of the upcoming (or here) recession! For our personal financial needs we are going to do what we can to get our FICO score to 720 and refinance...How about you? Are you looking at refinancing or buying longer CDs to lock in rates?

(photo by AP)

Moving Day! Savings Day!

Today (actually it started Friday) was moving day into my new office. They rearranged the common area next to my group and basically tossed us out of our homes. But this is already working better. It seems like I should be able to save time and save money.

The new area has the cubes arranged better so there is a common shared table area for everyone to use. We are also a bit more tucked into a corner so it is a bit quieter.

However my I do need to clean up and organize the new office. I just didn't realize I was such a pack rat! Here are some of the things I found:

• About 20 semi-used legal pads - Why do I always use 2/3 of one, lose it and then do the same thing again and again
• 2 packs of pens - Which is great because these are the Bic gel Grip pens and the company won't order them any more...probably cause I lost so many!
• $5 - Stuffed into the back of my old desk - Yeah!
• 20 -2" binders- This was on the bottom shelf of my suitcase, my group doesn't use these as we need the type with the clear view front
• About 400 packets of ketchup - From when I used to eat out for lunch.
• About 400 Napkins - From the same...I always take extra napkins, this was drilled into me as a kid. I don't think Mom ever bought napkins...
• Two full Garbage can of...junk
  

Once it is cleaned up I can bring in my little fridge that I have had for years and stock it with drinks. It is such a waste to go to the vending machines. Not eating out any more for lunch saved the biggest chunk of my "allowance' this will save me even more as I can load up at Costco on the weekends pretty cheap.

It can't be just me though; have you ever found something cool, or weird cleaning up your desk that you forgot about, or even your home?

Personal Finance QuickTake: Secret Billionaires

When I think of secret Billionaires I think of Bruce Wayne, Not Susanne Klatten, Birgit Rausing or John Sall. But there are a ever growing grow of billionaires whio you will rarely, if ever hear about.

They don't show up on E! or Perez Hilton they go about their daily lives. Sort of an uber-version of the millionaire next door. They are not leading quiet lives of desperation either. They run companies, sit on Fortune 500 boards and work very hard.

The real point of the story is that you can have the fortune and none of the fame, you just need to choose to!

So how about you? Are you wanting to amass a fortune? Are you content with where you are now?

For me, I like the things that money affords...not the cars,homes, jewelry...ok maybe the cars, but it affords you options; instead of having to work where you don't like, worry about bills, or see all this amazing world has to offer.

You don't have to be Batman if you amass a billion dollars, but it would be fun!

Performance Review Time

It is actually pass the time when my annual review is due. With a new outside management parent company things have been crazy. Since I am planning to NOT spend any raise and just apply it to our debt snowball, it really isn't like I "Have" to have a review now...I just want to get it over with.

I am one of the lucky few that gets and gives reviews...middle management my boy, middle-management :) However I thought that I would give some tips for being on both sides of the review desk. I have had tips on your career before, but this post is aimed at helping you during that once a year love-fest.


Tips for the reviewee:

• Document any and all victories - Throughout the year keep a $2 journal of all the things that you accomplished...do not be shy or humble. The ones that can document and show their value get the raises intended for the humble!
• Before your Boss writes your review - Make sure you get the information to him/her. If you format is the way reviews are done, by strength type, all the better. Bosses are people too and will use a lot of what you said if you provide it. Hopefully this leads to a more positive review, unless you are a horrible writer :)
• Push if you can, Pull if you must - Set a level of expectation to your salary requirements. You'll be surprised how much a, "Hope we are least looking at 5%, Bob!" Will go. First off it will gauge their reaction. If he answers, "Not likely" ask why and be prepped to go over your best points verbally. Even if you don't get 5%, you will set an expectation level of which Bosses are loath to break unless they have too. So give them a nudge up, or even a slight pull, but...
• Don't Threaten Everyone - Unless you are prepped to walk, greenmail is very tricky and you can wind up begging for your job back at a lower rate...I have seen it happen!
• Don't be defensive, but ask for clarification - If points come up that surprise you, like you think your productivity is high, but your Boss feels it is low, ask for direct example clarification and be prepared to have counter examples. This has to be delivered in a frank, non-confortational manner.

For Reviewers:

• Get the review done on time - It is not fair to make someone to wait to know what they got as an increase, which is really the main thing they want to know. You don't like it, so don't do it to others!
• Nothing in the review should be a surprise - If someone is not picking up the slack...tell them now and not a year later. All you did is make sure it didn't get corrected!
• Have weekly one-ones - I try to have weekly one-ones with each of my staff. I have my set questions, but the rest is their time. Whether it is to get me to finally sign the doc they need, or discuss their career path with the company. Want to increase retention and not be blindsided by someone leaving? Do this now! You will separate yourself from 99% of other managers
• Praise twice for every hit- No one feels motivated after a hour beating! Make sure to reinforce the good aspects, if they don't have any...fire them. You are better off with with NO-body than A Body.
• Don't blame other for anything negative - The "I think you are great, but Sara really doesn't like you". Take a stand. This is Your review of them, not their peers, or your bosses.
• Have clear examples of every criticism - if you say they are always late, have it documented. it should go, "Jill, on 14 separate occasions you were late". And have the back-up. Then it is the facts talking and not personal preferences.

The last piece of advise is to try and not take it personal, very few bosses (although I have worked for them) want to hurt or belittle you and usually genuinely want to be of help. Remember we all have two ears and one mouth!

I would also suggest that whatever bump you do receive, you do not start spending it. Forget it ever existed. We are adding ours to our snowball. If you continue to do this you will pay off debts faster, budget and manage your money better, and not get into the trap of spending every dime you make!

ps - The Carnival of Debt Reduction is now running over at My Dollar Plan it feature a special Life / Liberty post!

Personal Finance QuickTake: Buyouts

Chrysler announced today that they will offer buyouts of up to $100,000 to its hourly employees. Chrysler had just last year renegotiated their contract with the UAW to allow them to hire some new workers at a lower pay scale.

From a personal finance angle, would you take 2-3 years salary or keep your job?

For e it would be tempting as it would push me to start my own business, or buy one that I have been considering. With that sort of cushion behind me I could afford to take a bit of a risk...But it is still a risk.

There is a reason they are doing this. It isn't out of the goodness of their heart, just ask the 33% of white collar workers that were offed. They got basic severance. However the blue collar workers have a contract and the company can ill-afford a strike, nor the payout from violating the contract.

The US based manufacturers are getting leaner everyday, which will hopefully mean healthier, although a credit crisis won't/isn't helping.

If you did take the money what would you do? Would you be able to budget and manage your money, a lump-sum, over multiple years? Especially if you couldn't find work?

I am Late Blogging about Procrastination

I hate to admit it but I am a procrastinator. It isn't that I am lazy or don't work hard, but without time clock pressure building up, I have a hard time focusing on a single issue. This has affected my money management, time management and overall well-being.

I am not alone in this, Stephen Hawking, the preeminent Physicist of our time said that finding out that he had ALS was the one of the best things that ever happened to him, as it forced him to focus on a certain topic, in his case Physics. He said otherwise he probably would have dabbled away at 1000's of different subjects instead of focusing on one.

For me, there is something about the time pressure, or it needed to be done now that focuses me. Perhaps it is that I just see to many possibilities and having no time forces a decision. "A or B, youngish Lad..."

That being said I do not miss deadlines or delay others with my issue. It is there on time, even if I work 24-36 hours straight. It isn't fair or proper to make others suffer due to your inability to meet your responsibilities.

So how about you...Are you a procrastinator? If so does it empower, or hurt you, or others? How has this affected your personal finances and money management?

RFID will Revolutionize Everything

RFID Chips are becoming ubiquitous. Already most major retailers insist that all pallets arriving into their distribution centers are tagged with the chip. This is all poised to potentially save you money and protect you from counterfeiting

So what is the deal here? What are they, and how will it affect your daily life?

RFID , or Radio Frequency IDentification, is really like a very small radio station, that only plays one song over and over. In this case the song is the unique Identifier for the product. This allows the radio listener, or scanner, to pick up the location of the device. Think of it as a UPC on steroids.

UPCs revolutionized your grocery shopping experience. Remember when every single item had to hand entered by price? Those cashiers were really amazing, but there were big issue, as stores got bigger with more selection, it became impossible to remember every price in the store so they relied on the price sticker (when is the last time you saw every can of Corn having a price sticker!). Well price stickers can come off or be changed, Price check on aisle one! On top of that the only way a store new what was in stock was to physically count Everything!

With the UPC and the bar graph, scanning was made available then eventually affordable. This dramatically cut down checkout time, and real-time inventory levels were available leading to less stock-out issues.

RFID is the next level. This doesn't need to be scanned. As long as the reader is close enough it can pick it up. Imagine pushing your grocery cart thought the check out line, up to the register and they already have the pricing for you!

The limiting factor has been cost. You can't tag a dollar item with a dollar tag! UPC just relied on a printing surface. But like the laser scanner, volume is king and the chips are getting very cheap.

This has lead to new uses such as Contact less Credit Cards - RFID is what powers the AmEx Blue card and other "contact only" cards. Also the pet finder chips are based on the same technologies. Goods can be authenticated using the technology, so you can be sure to get a "real" version of the item. In addition this is being used to reduce theft at retail, which is a multi-billion dollar issue and costs you money in the form of higher prices.

Weekly Top 5 Personal Finance Articles

Sunday already! Busy week for me as I had to catch up from recent business travel. Lots of great things were floating in the Blogsphere about personal finance, budgeting and money management.

Here are my Top 5 Articles of the Week:

• Dividends4Life - A great SET of articles about pre-screening dividend stock that show some of the tools he uses to run true comparisons. MUST reads for anyone looking at individual Stocks
• The Skilled Investor - They not only ran the most recent Carnival of Financial Planning but also just ran a great piece about choosing, hiring and paying for a financial adviser and what you should expect in return.
• Green Panda Treehouse - Another double-dipper. They ran a great Carnival of Personal Finance and also had a great article talking about how they pay their bills and work their budget process. I love that sort of insight as I always learn something new!
• Catherine Lawson's Business Advice Blog - I love all of her posts (and comments!) but 107 Great Resources to Unleash the Entreprenuer in You is really uber-impressive. My hand cramped on my 39-tips...she did 107!!!
• The Digerati Life - 7 Things to Consider as a First-Time Real Estate Investor was a great read, talking about the cyclical nature of the markets, but how real estate is still a great investment

Life, Liberty and the Pursuit of Liberty News:

• Reached 20 Subscribers! Thank you! It is so easy to sign-up and for me, since I read a lot of blogs, it really is the best way to sign up. Just click on the rotating headline!
• Reached 1500+ Visitors! Thanks Again for reading it is very much appreciated!
• Reached 5000+ Page Views!
• I am really liking BlogRush... I have had over 15,000 widget views for my brand and about 30% of my posts reaching "Hot" status. Sign-up to today if you want more traffic...Just click on the bottom of my Widget! You get bonus view credits while you are building your blog and I get credits for signing you up!

Happy Personal Finance, Budgeting and Money Management reading!

Small Town Movie Theaters

A quick break from money management for a second. One thing I miss about being in a bigger city like Salt Lake, is the dirth of places to see a movie. I am not talking about "Die Hard 74" I mean the off-the beaten path movies.

For my B-Day the Ms. and I were going to see "There Will be Blood." Just us no kids, nearly 3 hours of quite time! And as of yesterday it isn't playing anymore...to make room for "Meet the Spartans"...The movie that is up for best picture got bumped by next years "Razzie" winner.

We have been so good about not spending money, that we have curtailed our movie going, which is a favorite thing for me to do. Before we would go to most new releases even before most of our friends.

In a way this does tie into personal finance a bit. By being responsible with money sometimes we can be/feel a bit more isolated from others who do spend. Whether that is them talking about their fabulous vacation, new clothes, car etc. I truly am not a jealous sort of person, and I don't wish that I was doing anything else, but what we are doing right now. But it is interesting how much of what we talk about togehter socially ties to spending.

How about you? Have you ever felt cut off because you were being responsible?

Top Personal Finance Necessities

If you want to get ahead in any endeavor there are always is a list of Must-Do’s. The list may look simple at first; however it is often the simple things that get forgotten. If you want to really get on the right path of money management and debt reduction, start today! So, in celebration of the 39th anniversary of a certain event…I humbly submit the following 39 Top Personal Finance Necessities.

1. Find out where you really are financially – This is a scary step but if you don’t do it you can’t fix it.


2. Decide that you want the situation to get better – If you cannot stop the bleeding you can’t be saved. Period.


3. Stop the bleeding – Lock the credit cards up, freeze them, give them to Mom, whatever it takes.


4. Be prepared to make sacrifices – The Van Gogh of the month club will probably have to go
   
5. Build a Budget – Build one that deals with the following: Consumer debt pay; Recurring Bills; Cash Items; Mortgage or Rent; and Targeted Saving
   
6. Make your budget realistic – If your grocery bill for the family is always $400, budget $400, not $200! You are better having a little fat on a budget then cutting muscle.
   
7. Build escape valves into the budget – Without having the ability to make some small person purchases, you are setting yourself up for a big failure later on.
   
8. Budget isn’t a four-letter word – It is a lifestyle choice. Not a club to get people not to buy stuff!
   
9. Emergency Fund –Do you have an Emergency Fund? If not It should be your first priority. You will never break you debt chains unless you stop using debt!
   
10. Build a Debt Snowball – This is for your Consumer debt pay, do this right after you fund your Emergency Fund
    
11. Kill the bills that you can – See #4 if you are confused. Wash your own car; mow your own lawn; read the paper online. The more you trim the easier it will be.
    
12. Develop an Envelope System – Pay cash whenever you can, not just when it is convenient. You’ll potentially save thousands a year.
    
13. Review your Mortgage – Are you in an ARM? When is it going up? Get a plan to refinance if your credit is good, or work on your FICO Score until it is. If you are in a fixed loan: How is the Rate? Know your deal backward and forward.
    
14. Check your FICO Score and Credit Report – Many people have inaccurate information on their report. It is easy to dispute and if they don’t respond it gets taken off.
    
15. Check your Insurance – Make sure you have enough coverage. It feels counter-intuitive to say save, save, save then go shop for insurance, but a great way to destroy your finances is to have a disaster and no way to recoup.
    
16. Get a career plan – Are you floating along, or do you know where you want to be in five years. So many people will return cans for $5, but then won’t be prepared to get the most out of their salary, the way we get the bulk of our income.
    
17. Understand you didn’t get here in a week – You aren’t getting out in a week
    
18. Get everyone in the house involved – If they aren’t they will never be bought in, and won’t understand why things are changing.
    
19. Full disclosure – Everyone needs to know how the family is doing financially. It will end the requests for vacations and extras that we will all cave on eventually, especially if we have kids!
    
20. Find a mentor – Great blogs are out there. Pro’s like Dave Ramsey, Suzy O, too. Find whoever speaks to you. Listen and Learn. But don’t be afraid to ask questions, especially “stupid” ones!
    
21. No matter how bad it is… – Realize it IS worse elsewhere…I guarantee that!
    
22. Track everything –You don’t have to go out and buy MS Money or Quicken (although they are great). You can do it with Excel or free spreadsheet programs that are out there. I use both, as I like the master sheet view I have created in excel.
    
23. Understand how you got here – Break your “vicious circle”…Be conscience of your issues and you’ll be surprised how much more manageable they are.
    
24. Tell your story – Doesn’t have to be a blog. Talk to a friend, you’ll be surprised how many have/are going through the same thing. Also the peer pressure of telling folks you are starting this will help you to not want to disappoint them.
    
25. Have a success mindset – If you tell yourself “you can’t do it, it’s too hard.” You will be right!
    
26. Avoid “Get Rich Quick” Deals – the only ones that make money on these are the ones selling them.
    
27. Do Not invest in Stock Tips – I don’t care if your Uncle Tommy knows this guy, eventually you will lose. You have way better odds in Vegas.
    
28. Do Not over invest in your own companies stock – Enron anyone?
    
29. Be systematic – Doing 1% of 100 things is not as effective as knocking out 100% of one thing
    
30. Retirement – Once your consumer debt snowball has worked its magic, try to maximize your retirement contribution
    
31. Invest in yourself – Need a degree to go to the next level in your career? Take night classes. Need some job/trade certification? Get them. I would just make sure that there is a ROI there, no professional students!
    
32. Health – Try to be healthy as possible. Exercise. Think of it this way…a heart attack is expensive!
    
33. No one is perfect – Dave Ramsey was once 100% broke! The only thing you can do is to move forward the best you can. If you make a mistake, or slip, jump back on the budget horse!
    
34. Your Net Worth – Is not the same as your Self Worth, easy to confuse the two, but they are not the same at all!
    
35. Shop around for everything – Make it a game of I bet I can get that cheaper!
    
36. Never buy a New Car – 20%+ depreciation for driving it off of the lot
    
37. Understand the Difference between Needs, Wants and Desires – Handle your base needs first, before you buy the Louis V private space capsule.
    
38. Understand that this is a marathon, not a sprint - The market drop today is the bull market tomorrow.
    
39. The Power of Compounding – Every dollar you save or pay-off today can literally mean hundreds later. The sooner the better!
    

Ok… this is a ridiculously long post. I also know that some of these feel very basic. But if it is so basic, why isn’t everyone doing it? Sometimes the most obvious stuff is right under your nose! Remember I am not a financial adviser, just someone going through the same thing as you! I hope this helps you on the road of money management and personal finance

Personal Finance QuickTake: Hold the Rebate Check!

Don't cash those rebate checks yet! Apparently the Senate doesn't want to just stamp "OK" and go.

The Senate version of the bill isn't written yet, but thy would like to see some other things added in, such as heating oil subsidies, Food Stamp increases, etc..

Once we go down that road then it can go only one way, everyone has a pet project area, and will try to lump it in. Not that the ideas aren't goo, just that if they want to get this passed and active they need to pass what they have now and not get into Congressional Hearing to discuss whats in and whats out. Because even if they do get it resolved, then the House has to re-debate all of this...

This is a major blunder if it happens, especially in an election year. It would be like taking away a present. If you never mentioned the present it won't be missed; given it super-CNN and Fox coverage for a week and people expect the money.

No one wants to be the one to kill this, and either party that does will get a major backlash. It is unbelievable that it ever got to this point without having the Senate on board.

Will the grandstanding end?...Will we get our checks? Will I get to pay off my next debt with it?...Stay Tuned...

(Photo From AP Photo)

Avoid Melting Your Debt Snowball

$1973.08

That is is the size of my total Debt Snowball. It will be the size of my Snowball unit my last payment is lower then that amount. That sounds really impressive until you hear that my current Debt Pool is $54,165.19!

We have paid off 6 debts so far with the snowball:

• Dentist Bill #1 - $147
• Kohl's CC - $204
• Dentist Bill #2 - $290
• Providian CC - $1055
• PayPal - $1220
• Braces (More teeth!) - $2380

• Total - $5296.63

Now we have continued pay the minimum on other debt as well and our payment on debt #7 is now $292.99 vs. a minimum of $98.51, so we are now contributing nearly $200 more to our debt. Once we pay that off we will be paying $639.28 on our car payment, or the entire $292.99 more then the payment book price!

As we pay on time, our minimums are going down on debts 7 through 12. We interpret Dave Ramsey's concept to continue to pay the exact minimums, and take the difference and apply it to the active snowball, or in our case, $292 on the State Farm credit card. Others continue to pay the original payments and pay all of the other debts a little faster at the expense of the compounding snowball.

I have always said due what works for you, but for us it feels good to put everything (hopefully including the tax rebate) to the current #1 debt. The important thing is to leave the snowball money as snowball money. In other words don't take that and add it to your 401K or something else, as the idea is to get through Baby Step #2 (paying of non-mortgage debt) ASAP.

So the best advice I can give is that although it is winter (at least in the Northern Hemisphere) don't let your debt snowball melt...it is your key to freeing yourself from debt chains and being able to manage your money.

Personal Finance QuickTake: Tax Rebates in May

As we talked about earlier this week, Congress and the White House have hammered out a final tax rebate stimulus plan that could have rebate checks in your hands as early as May, but most will recieve theirs by July.

The rebates will run as low as $300, as long as you worked and earned $3000 or more in 2007, up to $1200 per couple, with potentially a kicker per child in house.

Per the report:

"The rebates would phase out gradually for individuals whose income exceeds $75,000 and couples with incomes above $150,000, aides said. Individuals with incomes up to $87,000 and couples up to $174,000 would get partial rebates. The caps are higher for those with children."

For us that means we could get $2100 as long as the Senate doesn't change too much. This would be enough to pay off a Snowball debt, which would be great am get me my bigger snowball for my car (the next debt) faster.

While I don't like the Government robbing Peter to pay Paul, they are (for the most part)basically giving us our own money back. However if any of you want to protest this move feel free to give me your check!

720 FICO and Beyond

Given that Mortgage, Auto and Credit Card Rate are coming down it is getting to be time to think about refinancing...but only on two conditions.

1. It is to swap higher loans for lower ones
2. It is not used to clear credit so you can charge again

If you are planning to clear the card and not chop them up, then pay the higher rate you are now, go off somewhere and really think if you really want to get out of debt.

If you do, then to get those sub-6% rate we are all hearing about (and maybe lower) you are going to have to have a FICO score above 720, and 750 might be the new 720 soon thanks to tighter credit restrictions and FICO 08.

First, go check your FICO score. I use www.truecredit .com because you can track your report from all three major bureaus; Trans Union, Experian and Equifax. It is important to check all three as they can be vastly different from each other. (This is NOT a pay per post, I really use them)

Now that you know where you are, if your scoresare generally over 720, or even better,750, you can go shopping for refinancing, if not,it is time to get serious about your score.

A note of warning: The Debt Snowball that Dave Ramsey and I advocate (OK he advocates and I agree!) can slow your progress in raising your Credit Score. That system advocated paying one debt off at a time then applying the balance to the next debt. The problem with FICO it looks at your debt utilization per card. So while you may have 100% paid off CC 1,2,3,4 and numbers 5 and 6 being maxed, or just higher then the optimum 30%, it will still hurt you.

Here is what your score is currently made up from:

• 35% - Payment History - On Time - Even 30-days late once can kill ya
• 30% - Amount owed - Back to utilization again
• 15% - Length of History - Longer is better
• 10% - New Credit -How much and what kind
• 10%- Types Used - Looking for a balance

So using this info from myFico, you have 850 points tops, if your payment history is bad the best you could get would be 600...if everything else was perfect!

So here are the tips per type:

• Payment History - PAY YOUR BILLS ON TIME :) pay them a bit early if it ensures they get there on time. Even one 30 day late can flip you from Good to Fair credit, costing you thousands. So what if you did, how can you fix it..."I will go to that ad that says they can erase it!" Not gonna happen, they just flood the banks with denials and hope they won't reply. It is an old tactic and doesn't really work anymore.
• Amount Owed - Less then 30% per card is the Best. Smacks against Ramsey, but is you have to get a house loan or refinance, you may have to "Gazelle" them down to this level.
• Length of History - This is the one that good meaning people hose themselves on everyday. They pay off the Credit Card then cancel it...hurting their FICO number two ways. First if this was an older card your length of history just shrunk...you guessed it lowering your score. Second, your utilization was hurt in that you had a card that had 0% used...now you don't. You irresponsible, little... :)
• New Credit - Do not (if possible) do anything to get a "Hard Pull." This means they run a check on your report. To many of these (more than (2-3 a year) and it looks to them like you are trying to load up on credit. Danger sign!
• Types Used - They like to see a responsible mix. Revolving (Credit cards) Mortgages, and store credit.

Time is your friend. I have seen people (me!) with sub 520 scores work their way up by just making their payments. If anyone tells you they can take a 500 score and make it a 700 right away, they are lying, scamming, monkey dogs...Run Forest!

I am NOT a financial analyst, just a guy who has done wrong and now rides a pale horse to towns to bring help...oh... Sorry, that was Clint Eastwood. But really read for yourself, your score is really important.

That being said, I would NOT abandon your Debt Snowball to jack your scores, just because. Only if you are going to need credit in the next 3-6 months would I change tactics.

Follow this advice and you'll have great credit in no time!

Personal Finance QuickTake: Mortgage Refi Surge

The Mortgage Refinance market is heating up again. As rates drop, many are looking to lower their payment, or perhaps like me, want to move to a fixed loan from an ARM Loan.

The question is...when? It feels like rates will continue to fall for a bit as this housing bubble is taking away liquidity from people. Already, according to the article, nearly 37% of homeowners could refinace and lower their payments.

This is also due to the slow housing market. Homes just aren't selling as no one wants to buy a the top or middle of a bubble. People are staying in their apartments or renting longer believing that they will be able to secure a better deal later.

My neighborhood is a great example. It is a very new subdivision and we looked at three houses. The other two are still on the market a year later! Home builder are desperate to unload.

Mortgage companies only way to make up for the loss of new home sales is to push refinance harder. Everyday I recieve at least two refinance offers. Eventually this will be great for us. As my FICO improves (thanks to our budget work) and rates fall, I might even be able to keep the same house payment and have a fixed loan.

The savings to your budget can be huge if you lock in better rates, perhaps $50K or more in lifetime savings.

So look carefully, step more carefully and weigh in all of the outside costs, but for a lot of us it is becoming a good time to look at saving big money.

Economic Stimulus Plan

Given the continued shock of the US economy the government is working on passing quickly and economic stimulus package. They really want you to go out and buy something with it is quick, to stimulate the economy.

The plan runs from a GOP led effort to be $800/$1600 for singles and couples respectively or the current Dem thinking of $500 per tax paying person. There are also cuts to business taxes as well as increases in welfare, Medicaid and unemployment benefits. This is being fast-track to pass within the next three week, with checks to follow fairly soon afterward.

For us, it would be nice! Although we will disappoint the government in their effort to glue our credit cards back together. Ours is going right to debt, if it happens. It would get us close to paying off Snowball debt #6!

On top of that I can see the prime lending rate continue to fall for awhile. The housing issue is big with a ton of inventory on the market, and what buyers there are, looking for the bottom before buying.

What about you? Any plans for you potential rebate check? It would go a long way towards an Emergency Fund if you haven't established one yet!

Personal Finance QuickTake: Fed Cuts Rate 3/4%

Early this morning, in a surprise mood, the Federal Reserve cut the Federal Funds rate by a whopping from 4.25% to 3.5% . A cut was expected at the next meeting, but by doing this they obviously are showing that they feel the economy is headed south ...fast!

The cut is not only surprising due to the timing, but also the size. .75% is an outsized drop at the Fed where the have been making small .25% cuts.

Unfortunately the market took this as further evidence that the economy is in worse shape than though of earlier. The stock market dropped over 450 points at the opening of the day, but bounced back as some tried to lock in lower prices.

What this means to us! It will be very hard for all of these high Interest Rate savings account not to cut the same percent, so it look like 4% is the new 5%! Credit Card Rates should come down a bit, and it may become a good time to refinance your house or debt.

The worst thing to do is panic. You will only lock in losses. Downturns happen and looking at them as potential buying times can secure good returns later.

Remember in budgeting or managing your money it is Buy Low, Sell High...not the other way around!

Back on the Budget Horse

It is time to get back on the budget horse. For the last few weeks we have been a bit slack compared to our December gusto.

It started like any other slip starts; various Ninja bills, that we know better to have hit and I broke a couple of my "Golden Rules."

Here's the breakdown:

1. Ninja Bill #1 - Gas Bill was $100 higher then budget...due to thermostat gremlins!
2. Ninja Bill #2 - Electric Bill $70 Higher due to Christmas Lights and not turning off regular lights
3. Golden Rule #428 Clothes - As Dave Ramsey Says, he never has counseled naked people! Two of the kids needed Winter coats. They are growing like weeds and I didn't plan for...winter :(
4. Golden Rule #689 Steam valve - In saving for my golf club I left no room for anything else. Since I get my allowance in cash and I am stooopid, I have carried the cash around. This has led to over spending on stuff I don't need.
5. Golden Rule #53 Budget for the Obvious - After doing a great job on Christmas and the girls birthdays I forgot to budget for my mother-in-law (doh!), step-father, and...(wait for it) my birthday! So scrabble and over spend budget again. I asked to skip mine which got me in hot water!
6. Golden Rule #541 Don't Get Cocky - Moved too much over to savings too quick. didn't look forward enough.
7. Golden Rule #541b Get too Depresed About it - You aren't your budget, mistakes aren't sign-posts that you are a personal failure.

Long and short of it is my ignoring a few little things threw us off the horse. And in travel and a silly packed work schedule and...here we are.

So I can make it up...I think, but time to pay the piper. Remember we are all human, we are mistake making creatures. Just don't let personal finance mistakes become patterns, or worse, just the thing to tell you to quit, cause you cannot do it.

Get back on the horse!

Personal Finance QuickTake: Britney

I guess I would be smiling too..Portfolio.com just did an interesting review, in a back of the napkin sort of way, of Ms Spears personal finances.

According to court documents she has amassed a $125 Million fortune. On top of that she pulls in over $700,000 per month, or $8.4 Million per year. This means, without ever touching the principle, and only making 5% on it, combined with her income, she pulls in $14.65 Million potentionally a year.

It would be hard to spend all of that, each and every year, and I hope for her kids sake she doesn't.

The truth is I really feel bad for her, whether she created the storm in which she sits or not. To lose your children, marriage health (and hopefully not more) and have it all over the media would be tough on anyone, regardless of her resources; she is obviously unhappy. At that age I, and most others at that age, went through a lot, and luckily cameras didn't follow me around all the time to try and get me messing up on the web 15 minutes later.

This post really came due to my daughter who was a big fan. Her comment is a great lesson to all of us in a journey to be debt free and manage our money...Money doesn't buy happiness.

Disney Trip Observations

This is were I spent a lot of my youth in Omaha, Peony Park near 72nd and Dodge. Think As small as you could be and still be a theme park. The best part was this swimming are, a big giant faux-beach right in the middle of Omaha!

Unfortunately it is gone now. Couldn't keep up with cheap flights to fancier places.

I am sitting in my room at the Disney Californian at the end of a crazy day at our trade show. I fly home tomorrow (yeah), but I thought that I would share some things I observed:

1. Who would ever get Disney bucks??? - They are worth the same as regular money, they are non-refundable, and really they are a pain-in-the butt for the parks and you. If I want a picture of Goofy on the $1000 Bill, I will make my own in photo-shop.
2. I get the way over-priced shirts and collectibles - But some of them are huge! The Hannah Montana Rehab Clinic would be bigger then my luggage!
3. Beware the great looking lobby - This hotel is nice, no question. But you check in and see the lobby and think you are staying at the Ritz, and they are priced the same! The rooms are functional, but nothing to write home about.

Put it this way for the money I would stay somewhere else, even one of the other Disney Hotels. But the biggest point...Non of them have a "Sandy Beach" like Peony Park!

Back to regular posts on Monday!

I Am Getting Too Old For This...Personal Finance

In all of those buddy cop films of the 1980's there was always a young "I can't Play by the Rules"cop and a "6 Hours from Retirement" Cop. At some point in the movie, the older cop would say..."I am getting too old for this..."

I am starting to finally start to understand the older cop! (Don't say why!) He has a perspective that what he might do won't matter to the world, I just want to retire and relax.

This trip, and traveling as a whole is a drain, and in a trade show, and it is even a bigger life suck :) But what is funny is none of it used to bug me. We'd work all day, stay up all night, and be up the next day raring to go! Now...not so much. It really reinforces something: You won't always make what you do now, or have the health to do what you can now, so enjoy it, but make sure you are worrying about tomorrow too.

That poor cop always has a boat or something that he has been saving for and working on for 10 years...and then the bad guys blow it up! Have your boat ready when you are ready to retire, whatever it is!

Get a Mentor, Be a Mentor...

If you want to be successful in budgeting, money management, cleaning up your debts or being successful in your job you really have to find a mentor.

I stumbled into Marketing by accident, as I was, of course, pre-destined to be a giant Rock Star...That didn't happen (obviously) so at some point I needed to get a job. I started at the very low-end answering phones, but eventually got to start working on our catalog and being one of the first people added to the marketing team when we brought someone into the company to lead our efforts, which were home grown only up until then.

I was lucky in a couple ways; one the person hired had an amazing resume and had worked at some great companies when they were start-ups and when they got big, so he had amazing experience. Second, the man was ego-less. A lot of time outside industry hires come in and are going to "teach" you how it is "really done." This guy was not that at all. His first comment was to me, "I know some things that might help with what you are doing here, but you know your industry and I don't, so you can help me with that!" Lastly, I was bought in and smart enough to realize this was a great opportunity for me.

He stayed for a few years then moved on , but after a few years I left and worked my way up in a different company to a similar position. I tried to remember how exactly he taught me and treated me. I don't have the saintly patience that he had, but he instilled enough compassion to care that my employees were getting mentored to the best of my ability.

When I began to really dig into person finance and budgeting, I realized I needed a mentor there as well. The same goes for my marriage and my current position at my new/old company. The same goes for Blogging. It holds true for nearly all aspects of your life.

There is a maxim that I try to remind myself of: The More you Know, the More you Know you Don't Know!

Your mentor doesn't have to be right there with you. You can be mentored by reading about someones life, or by hearing of someones life. But if you take from this well of knowledge you have a responsibility to help others as well...even if it is some kid in marketing that really doesn't know what they are doing :)

Sorry For No Second Post Today...

Sorry for missing my second post today with my QuickTake...Traveling to Anaheim for a convention and massive travel delays...

I am traveling all week and back on Sunday Night and Will be posting! Might take a bit longer on comment responses as well, but I will always answer each posted comment!

Thanks for everything!

Racer X

Easy Savings to Your Budget Using Cash

For most of us, our budgets don't break due to huge expenses every month. We die from 1000 small cuts and potentially give up since it "is just too hard for us", or, "we aren't good with money like Bobby!"

What I saw with our budgeting struggles was exactly that, we would say "oh we've been so good we'll go out to dinner", or, "It is just a sweater, it was on sale, I Saved you money, that what you wanted wasn't it?" so we would be $20 over here, and $10 over here, it just adds up quickly. Also, once you break discipline, you have to get right back in or you will stop trying soon.

One of the things that I was initially dead set against after reading Dave Ramsey, was the wacky envelope system. I thought that since we were bad with cash this would be a ticket to crash, but really that is the secret of the system...you can't crash, you can't go over!

The system works like this:

• Separate bills - Separate the ones you can pay with cash, true cash, not money orders or checks. For us this was the following: Groceries, Gas for our car, Entertainment, Dining, Kids Allowance, and Our Allowance.
• Set budget for each - If you already have a budget, great! Otherwise you need one for every category.
• Break It up - I get paid every two weeks so our plan was to get cash every Saturday after I got paid. So we divided the budget in two. I understand that I get paid 26 times, but our stomach doesn't know that so we looked at a top down budget and a bottom up and determined our bi-weekly needs.
• Separate Envelopes - You need separate envelopes for each amount. On allowance, one envelope per person. Write on the outside of them what they are for and how much is in them when filled.
• Divide up the responsibilities -Get your spouse Involved! Letting someone else have decision ability over a fund is a great way to stop being the budget police! If it is just you, then still judge each envelope as a separate entity and not as a pool of money.
• Plan out your cash - In order to fill those envelopes to the exact amount, and no more, you will need a wide variety of denominations, in our case, all of them! Plan out what bills work for you in each envelope. If you want to eat pizza, and you know Pizza Hut won't take a $50...don't put a fifty in that envelope. On the other hand, you might not want to bring 200 single $1 dollar bills anywhere...trust me...
• Off to the Bank - I will warn you, some of you will feel weird the first time you go in with a note asking for an odd amount of cash and then want it in all of the possible denominations. Don't stress. The banks don't care, and if they did...who cares! It is your money. In fact I have explained the system to a few teller now and one of them is doing the same now as well!
• The Last Envelope - There is one more envelope; label it Overage. You won't need it yet. But at the end of your period, one week, two weeks, etc., whatever is left over goes in to that fund. My suggestion is to do something that the whole family wants to do; pizza, a movie. Celebrate that you beat budget, which is the only way money is left! Spend it guilt free. You will want to put it towards debt, or some other noble cause, but don't you need to as it is truly extra But you do need it, and so do your loved ones, small motivators. If you want Budget to stop being a 4-letter word? Just try it!
• The Aftermath - For us it is important for everyone to know how we ended up for the month at. IF we went over in some other area of our budget we dock the next envelopes, but not the overage. So for us for example, our gas bill was a Ninja this month, as some folk decided that they preferred it warmer then where the thermostat was set, no surprise, higher Natural Gas bill. So for the next few envelopes we will pay it back via lowered Dining and Entertainment. It is a great reminder to all to do there part...and have my kids tattle on each other (kidding).

So what about those easy savings that I spoke about. They come from making budget every time. If you are not using this method, add up over the last 90 days how much you went over in those categories you could pay for in cash? $20, $50, more? Big time budget blowers and money management killers. Using a debit card, or even worse a credit card, and you can nickle and dime yourself to death.

Us? In 12 weeks we haven't gone over once in anyone of the categories, and had, on average $20+ to spend on a couple extras! We are not perfect by a long ways, but we have been able to work together and still have some creature comforts. I know I drive people nuts by saying this, but It is a marathon and not a Sprint. You have to be able to live your plan...forever!

Hope this works for you. If you are doing something similar let me know, would love to hear how it is working for you.

If you like the post, please sign-up for my RSS feed at the top of the site, or via email up there as well.

Personal Finance QuickTake: Life, Liberty and the Pursuit of Money Update

Gonna take one day off of our Personal Finance:QuikTake feature because today is a special day. Yesterday was the first month Anniversary of this Blog! It really has been amazing. To be able to share tips on Personal Finance, Money Management, Debt reduction and random acts of silliness has really help me focus on our finances and be more accountable.

There is so much great information out there and what started off as being curious about Blogging has turned out to be my new favorite hobby. It has been fun to tweak the look and feel of the site and to try and see if those tweaks translate to more visitors.

We have also achieved some mile stones over the last 90 days that I am proud of:

• 1000+ visits - I know some of your get this in a day, but I never though that many folks would come!
• Nearly 4000 page views - Wow!
• This is the 60th post! - Time has flown by!
• Great Comments - More Please! Thanks to CathL, Mrs M and Heidi (aka Bankergirl) for being the top commentators!
• Featured in many great Carnivals - This really has brought a lot of traffic, especially Plonkee's Current one and Mrs. M's recent Carnivals
• Featured on MSNMoney - The Micheal Scott piece has receive the most views so far of any piece, but the piece on your career is close!
• Great Blogs I didn't know about - "Good Karma list" started with 3 and now at 25 and growing fast!
• Supportive people - People have been very kind by giving the blog a chance to find it's voice and
• Starting to learn about AdSense and Affiliate Sales - It is really cool to see what works and what doesn't!

For anyone starting out I would say the following:

• Stick with it. Good content will attract readers
• Get good tools to help you - Blogger and Wordpress are great for the beginner! I got my site up in an afternoon
• Sign-up for Blog Rush - They are great about exposing your blog to a lot of people, and their bonus program help out new blog get extra exposure! IF you click on the tab on the widget on my blog you can sign up right away and, unlike other "traffic" helpers., it is free. If you sign-up through my widget I get extra bonus credits as well, and you will if other sign up on yours.
• Don't make a MFA (Made For AdSense Site) - Those Internet "deals" are scams and Google is cracking down. if you are doing this for big money, a part-time job will earn you more. You have to enjoy it. Not saying you can't eventually make some money, but it takes time and effort, no get rich quick here!
• Read about being an effective Blogger - ShoeMoney is a favorite. He gives you real facts, doesn't try to sell you anything and has great real-life tips.

Top 10 Traffic Buddy's for first 1000 visits!! - A Huge Thanks to them!!!

1. Mrs Micah
2. The Digerati Life
3. We're In Debt
4. Plonkee
5. Bankergirl
6. My Open Wallet - (First PF blog I ever read!)
7. Get Rich Slowly
8. Being Frugal
9. The Brightside of Debt
10. Collecting My Cash

Writing about helping people with finances, money and debt has helped my very much. I hope you have enjoyed some of the articles. If so please sign-up for my RSS feed, I try to update a couple times a day so it makes it easier to keep up! also if you enjoy the site and have your own blog please feel free to add me to your blog role too!

All the Best,

RacerX

Top Emergency Fund Basics

If you want to break the chains of debt dependency, and you probably wouldn't be reading this if you didn't, I firmly believe you have to have an Emergency Fund as a cornerstone to a good debt reduction plan. Dave Ramsey and I firmly agree on this. If you don't, you have a high percentage chance of being in a worse situation then you are now.

What is is For?

Your Emergency Fund is to stop Ninja Bills. Those bills that pop up with no notice. "My muffler fell off;" Water Heater Popped:" I broke my foot by stubbing my toe" (which I did this Summer!). What is isn't for: "That is a great Driver and it's on sale, and hey I have money in savings. It might be sold-out later, It is an Emergency!!!"

I don't need one I have a credit card!

I have heard all of the arguments; "Credit Card Interest is 15-20% and I get 1% on my saving, I am better off with charging it!" You are not wrong! But if you have debt; one, you may not have enough credit and; two, all the hard work of paying it off is gone! In addition most that have money issues (which is most Americans!) have an issue clearly separating OK charges from "Stuffitis."

I hope this person doesn't mind but a favorite Blog of mine, "We Need to Be Debt Free" is a great example of what can happen when you don't have a fund. JW works really hard, starts to pay down his debt then some random act of un-mercy hits him. Back up go the charges and start over and over. It is mentally draining to continue to fall back into debt. JW is now taking those steps to establish his fund.


OK, That scared me I am in, but how much? And where do I keep it?

These are the two questions that confuse Ramsey fans the most because he picks an arbitrary number out of the air, $1000. But if you are driving an older car, own a bit older house, have kids, this many be low. For others it may be high.

As long as your major life points haven't changed recently (new kid, house, etc.) here is what we did. We went through our last 2 year worth of purchase in Microsoft Money. We identified the "emergencies" and then took the most expensive one an rounded up a bit. Ours was a $1800 repair bill on the car we still have now so we used $2,000 as our number. Important part is that it can handle most day-to-day issues that could reasonably come up. Your are right, if Killer Bees attack your monkey, you may need more, but the odds are pretty low. We WANT you to get back to paying off debt. We are only putting in a First Aide kit, not a hospital!

On the where to keep it, I feel this isn't an investment fund, so I don't suggest buying something illiquid with it like a CD or Real Estate. Put it into an Interest bearing savings account, preferably attached to you checking account as potential overdraft protection...Never Hurts.

OK, Got it...Is it OK to Use it?

I have read of people that won't touch the fund at all. It is there to be used...IF needed (see above). Our house rule is that we expend our "fun" money first. Goodbye Entertainment and Dining. Funny...that is usually enough to downgrade the Emergency to, "maybe next week".

That's it. Then move on to Step two, killing your debt. A Good Emergency Fund is the best friend of a debt reduction plan, and a very important step in breaking the chains of debt.

Personal Finance QuickTake: Facebook

60 Minutes just ran a really interesting piece on Mark Zuckerberg, the founder and Head of Facebook. What I really liked about the piece is how someone at 23 is changing an Internet model thought cast in stone a year ago.

Over 2 million people sign-up each week, and the main selling point for me is the ability to really custimize your pages with widgets that you can even develop and sell. Sure Beacon was a PR nightmare, but they seem to have a better handle on there clients want compared to mySpace.

I like seeing stories of companies that are just taking off as well. I remember reading about this small search company that was fighting an uphill battle against the jugernaught of Yahoo... you now know it as Google.

I lie business biographies and the "Pirates of Silicon Valley" is a favorite. It would have been great to see more of the early Microsoft and Apple days. Great lessons to be learned from all of these founders:

• Follow your dream
• Don't take no for an answer
• Work harder than all the others

Is Facebook really worth $15 Billion, I don't think so, but rest assured someone is going to buy them, and they will have to pay a King's Ransom.

New Week New Carnivals!

Just a quick note to let you know that Life, Liberty and the Pursuit of Money has been included in some great Financial Carnivals that are running now!

Plonkee Money (a personal favorite!) is running the Carnival of Personal Finance right now and man is it HUGE! What an amazing amount of work. They were kind enough to include our article "A Most Important Key to your Future" .

The Carnival of Debt Reduction is running at DebtFREE Revolution. Again, a ton of really great work and articles to help you become debt free. They were kind enough to include our post on "Budget is a Four-letter Word" . Don't worry no bad language...other than Budget and Diet :)

And last, but certainly not least, the Carnival of Financial Planning is going on at The Skilled Investor (which is a great site BTW!). They were kind enough to include "Budget is a Four-letter Word" as well!

Thanks to all of these site for all of the hard work. They have all really helped me to begin to establish the Blog and they all do amazing work!

We Saved 33% on our Grocery Bill

Since we have began our Personal Finance and Budget journey, we knew we needed to get one of our largest bills in line as well, groceries. This was one of the largest "bills" in our budget and it was creeping up. With three growing kids, me (kid four?) and my wife being an amazing Chef, our bill was out of control.

We had a lot of big dinners at the house to entertain family and friends and always insisted on doing everything ourselves. But besides packing on the pounds, we were packing on the bills as well.

So how did we cut our bill by $400+ per month? Here is what we did:

• Set a More Realistic Budget - We looked back to when we were running better in controlling our money and then set a goal that was took into account what was reasonable for a five person family with the Holiday coming.
• Started by Meal Planning - What were we going to have to eat and when? My wife being the chef, didn't want to fall into the Tuesday is Meatloaf night sort of house either. But being 100% flexible was costing us with one-off trips to the store, where we always came back with more then what we needed.
• Went to cash ONLY on Groceries - The best way to not overspend is to make it impossible. Use cash. I get paid every two weeks and when we do we take half the budget and use the envelope system. The potential embarrassment of having the store put things back will keep you paying attention! If we go over, it comes directly out of our Entertainment and Dining Out money. Then out of our small personal allowances! Ouch!
• Put Chef in charge of grocery money! - They make it, and knows what and where they can substitute to save money.
• Take advantage of store loss leaders - Almost all grocery stores print a set of coupons and deals during the week. Here it is Tuesday. These are the stores products that they take short margins, or even a loss to get you in the door. We take 20% of our grocery money for stock-ups of these deals. This can be Costco money as well. BE Warned: Do Not stock-up on non-needs! You do not need to buy a 55 gallon drum of pickles! It isn't a deal if they are never/half used!
• Multi-Store It!- Usually store will have a specialty to try to be different then the other local stores, so it doesn't turn into a blood bath margin-wise every week. So in other words, Albertson's won't make a big push on hamburger when Ralph's does, if possible. Work the food ads and go to separate stores, it will take more time, but I would almost guarantee if you aren't doing this step it is costing you 10%+. Even with gas prices it pays for itself.
• Only go with a list - Then only buy what's on the list. If something else sounds good, you have to cut the other stuff right then. Part of the power of cash! It is such a pain to do, it will be the exception rather than the rule moving forward.
• Incentivize - If you beat the grocery bill have (or some amount, goes Into Entertainment or dining. Your kids will start trying to help cut things if there is something in it for them, like an extra DVD or Video game rental if you beat budget.
• Snack-itis - Limit snack foods or cut them out. They are bad for you and are some of the highest margin items in a grocery store! If you do buy some, make sure everyone knows when they are gone, they are gone. This is the best tip for those of us with teenagers, who eat EVERYTHING!
• Dinner Parties with family and Friends - Make it potluck! In fact, try to have one of these at least a month. It s great to get everyone together and it is cheaper then a hosted Sunday meal.

We aren't perfect by a longshot, but this has been one of our significant savings on our budget. Money that goes right to our debt reduction or savings...Oh yeah, one last thing...don't go to the store hungry either...they are right about that one...unless it is Costco on Saturday; Free sample laden Lunch!