Getting Caught Up!

OK now that I am back I need to get caught up! Both in terms of where I am financially and my goals. Back to Personal Finance 101.

After a series of Unfortunate Events (Taxes, Computer, Bonus, Ninja Bills) I have real been too passive with my personal finances. So with this weekend being my Anniversary I am going to take a few days (Friday-Tuesday) and do the following:

• Compile and file all of my paid bills. They are in my "Out Box" but they need to get re organized. This weekend I alphabetized them and prepped for filing.
• Re-Download MS Money and rebuild...ugh, not looking forward to this part, but it has to be done.
• Reset calendar to adjust for moved bills. Some have been changing dates (CC Cards) didn't notice until I compiled...dirty apes!
• Final March and prep for EOM April
• Reset goal now that bonus is probably poof.

Also really need to get my short, medium and long term goals back in focus...feel like I have been treading a bit of water for a while.

Sarting was tough...restarting is tougher!

New Car Smell from Hell! (And Charter Sucks!)

As I am still working on my 1st quarter numbers, my Internet went out and who knows how long it will be out...Charter Sucks! So I am knocking out this post as I eat a sandwich at my desk and dream of holding these Ninja Bills at bay!

Neat report on Yahoo today about new cars that lose their value the quickest. Nothing is a better feeling then driving home in that new car, neighbors saying, "Hey Bob...Nice Car!" no spilled Cheerios in the back...or dog hair (we don't even have a dog either). But all of this is balanced out by one little personal finance fact: Buying a new car is a horrible financial decision!

You take 10%+ of the value of the car and flush it for just driving off the lot. And to make it worse, most people finance them...and not great rates. So you are spending current dollars in the future for something that's always losing value.

Just buying a 2-3 year old car can save thousands of dollars and will probably still have most of its warrantee intact. As bad as this call can be you can make it worse by driving a car that depreciated even quicker!

Here are the Worst Offenders:

• Kia Sedona
• Lincoln Town Car
• Suzuki Reno
• Suzuki Forenza
• Suzuki Aerio
• Mercury Grand Marquis
• Dodge Durango
• Chevy Uplander

As a point of reference the KIA only retains 20% of it purchase price value after a typical five year ownership! Five years isn't uncommon of car loans anymore either, which makes the impact worse.

A new car is fun and feels good, but is it really worth this big of an economic impact on your personal finances and budget?

The Marathon Wall

I have said in this blog over and over again, "Personal Finance is Marathon not a Sprint." But like a marathon often even the best runner hits a wall.

The wall is where you just tire out. For others it is a loss of concentration. And even others describe it as a system breakdown.

Well...I have hit the wall. I am pretty sure it came from a series of Ninja Bills, that, as they do, jumped out of nowhere for their attack. The first was my computer going down, the second was prepping for my presentation, a bonus issue, a late review and finally the last one was just time...or the lack thereof.

It isn't like I have gone off the rails and started charging things, but I am just tired of thinking about my debt all of the time...it really is at times disheartening. It is a long road.

I know what I have to do...I have to get the train back on the rails and then get it moving. Get back on the horse. This weekend, when I have 10-mins...and not at 1am in the morning! I am gonna get caught up and back on track. I look at my sheet and we have accomplished a lot in the last 120 days that it would be a really shame to turf it.

How about you? Hit a wall in your quest? Did you go through it, around it, or are you there right now as well.

The $200,000 Baby

After the $22,000 Cat I guess it was inevitable...a $200,000 baby. Except this is not some baby that you design at an old Eastern European lab sneaking in past the US State Department, this is ANY kid born in 2007.

Apparently the average cost of raising a child has risen over the $200,000 level for the first time. This money stops at 18, no college, wedding and endowments beyond. Yep, just $200 grand hit to your personal finances to get this little guy through High School.

As a parent of three it is amazing the costs, some hidden and some blatant in raising a kid. Beyond the obvious food and clothes, think about housing. Most of us wouldn't get a 3+ bedroom house with no kids. Unless you trade over for an expensive loft that is a significant amount.

Don't forget about activities either. Summer Camp? It can be thousands of dollars and they might still come home early. Add in sports, Ballet (which I still say is French for Expensive), other hobbies, holidays, etc. and you can see how that the number racks up.

So am I saying don't have kids?...no way. If my three will cost $600k then it will be worth it. The are great people and I am proud to have them around...not to mention the caring for the elderly (me one day!) is probably more expensive and harder on your budget then raising kids...so it is an investment :) .

Career Key: Frustration vs Reality

Ever have that, "If they don't see my value I should leave!" feeling? One of the toughest times in a career or job is when expectation level doesn't remotely meet reality. These, to paraphrase, "are the the times that try men's careers!"

I am there now.

It is coming up on bonus payout time, I know what my payout could have been. We revamped many of the programs under my direction this year leading to over $1M in increases. I also laid the groundwork for new programs now launching that will generate $6-10MM per year...for a long time.

Based on all criteria I had a pretty good year...too bad it is for naught.

At a staff meeting this week we were told the bitter truth. That since the company had a poor year, (due to operational issues, not sales) bonuses would be small, or non-existent. And it would be based on the discretion of Executive management on the amount. Frankly, based on that I really don't know if I will get a bonus! But if I do it will probably 10% of what it could have been. Given that 20%+ of my pay is bonus, that hurts. Not eating moldy bread tragic, just a major bummer.

I am actually not surprised as the company, which in all other facets is pretty great BTW, puts lip-service to MBO Bonuses but the followup is poor. We had agreed upon MBOs (Manage by Objective) targets laid out and agreed to, to our Boss a year ago. They were never signed off on by the Executive team.

I am OK with saying that we had are having a poor year and bonuses will be tied first and foremost to OI (Operating Income). However this was discussed and determined that this year would be different and we would truly run the MBO program as intended; in other words hit your goals and you will be good to go.

Add to this frustration my review is 120-days late and won't be delivered until April. I will be retro-ed the amount, but given that there are already hints that; "I really already make more than the other Directors" I am not expecting much.

So what to do:

• Quit - Not with somewhere else to go. I am always networking though and have options
• Do Nothing - Passively going through a career taking only whats given will cost you thousand over the course of a career.
• Talk to the Top - Go to the CEO and complain. Uh...career suicide!

OK, Trek fans, sounds like a "Kobayashi Maru" test huh? For non-Trekers, this is a no-win test. It is to gauge your ability to get the best outcome even though you are gonna lose. Only one person to beat the test is old Captain Kirk. How...he changed the rules.

I did a bit of that too. here is what I have done to "win the situation" or at least get the best possible result:

• Before I came, back to the company I investigated how the "MBO Structure" had been working. Most expressed indifference at best. Basically I knew I couldn't rely on it, so I didn't and tried to get my salary as high as possible.
• I have NO plans for my raise. IF it comes in it will go right to my debt Snowball. I'll never see and spend it.
• I am logging all of these wins too! If someone asks for a resume I have a freshly pressed one ready to go.
• I don't let it get me down...at least to my Boss. I am Captain positive. I am sure he did everything he could (which he did) and I won't d anything to make him look bad.
• I try to get mine other ways. I talked to him about promotion, project bonuses or anything else to get those funds back.

End of the day, you can't control how you are dealt with, just with how you prepare for it and react to it!

Movies are a Budget Weakness

Summer Movie Season is a hard budget time for me. But I am a movie junkie. Have been since I was a little kid. Every other kid wanted their birthday party at Chucky Cheese or any Pizza place. Not me, I always wanted to go to the movies.

I was lucky to grow up near one of the best movie palaces outside of New York and Los Angeles; Indian Hills in Omaha. Unfortunately, it is gone now but it was one of the few Cinerama theaters outside of a big city. It is where I saw Star Wars for the first time, had my real first date, and the last time I was in Omaha, I took my Mom out to a dinner and a movie as I was now a big time music school attendee and future Rock Star :)

The reason for the nostalgia trip is the Summer movie Season is coming up and I will have to stretch my entertainment budget by cutting other things as much as possible to see all of the ones we want to go to!

Here are a couple No-Brainer way to Save Money if you are a Movie Fan:

• Matinees - Simple I know but the difference in price can be $3-5 per ticket for a family of five that means at least $10 saved (two are still kid tickets). Sunday afternoon is a great time to see a movie and it seems like most are timed to let you make it right from church :)
• Wait two weeks - This is a tough one for me as I have the patience or a knat sometimes, but often movies are going to discount theaters quicker as they go to DVD quicker.
• Don't get nickled and dimed! - Snack bar is the killer. Often costs more than the movie! They will try to up sell you to a uber-jumbo size on all, but it is rare that you will eat a four-bushel barrel of corn! right size...or get the bigger size and share. Get the large w/the refill if you are all going to share.

Three pretty easy ways to save some money so you can go more often!

How about you? Any tips to share? Looking forward to anything cool?

Are Oil Hedge Funds to Blame?

The US is very shortly staring at $4 per gallon gas in its near future. Oil was at $108 a barrel today and given that those are 55 gallon barrels that is nearly $2 per gallon...for crude oil! The $1 Trillion Question is, Why?

What has changed in 24 months in order to send oil from $50 to over $100? Is it demand? Nope, demand is rising 10%+ and will probably slow down to very low growth due to consumers driving less. Has OPEC turned off the spicket? Nope. There have been fluxes, but for the most part...no. Iraq and Venezuela have been an issue, but not enough to cut supply by half. Which is what it would take to double the price (at least in a linear fashion). This report from WTRG shows more great slides to review for yourself.

From the report:

The U.S. petroleum industry's price has been heavily regulated through production or price controls throughout much of the twentieth century. In the post World War II era U.S. oil prices at the wellhead averaged $24.20 per barrel adjusted for inflation to 2006 dollars. In the absence of price controls the U.S. price would have tracked the world price averaging $26.16. Over the same post war period the median for the domestic and the adjusted world price of crude oil was $18.53 in 2006 prices. That means that only fifty percent of the time from 1947 to 2006 have oil prices exceeded $18.53 per barrel.

Until the March 28, 2000 adoption of the $22-$28 price band for the OPEC basket of crude, oil prices only exceeded $24.00 per barrel in response to war or conflict in the Middle East. With limited spare production capacity OPEC abandoned its price band in 2005 and was powerless to stem a surge in oil prices which was reminiscent of the late 1970s.

I was puzzled, why the super rise then? Then I ran across another, bit older article from Fortune about Oil Traders and Oil Hedge Funds. While this article is a bit out of date it really lays out where the groundwork for this bubble has come from. Oil Hedge Funds. Talk about printing money for the last three years!

It works like this: I think oil is gonna rise, so I buy a "future contract" for oil at x date at x price. The fellow I am buying the future is betting the other way. So let's say I think oils going to go to $125 by Christmas (Gosh I hope not, but as an illustration) I would put a bid out to get the lowest possible price for that December 2008 oil. Timmy thinks it is going to $115, so he is happy as punch to sell me all the oil I want for $125! So he takes my bid at $125...It is now December. Oil is at $150! I get to buy it at $125 and Timmy is selling it to me at that price, even though the market is $25 higher now. So I made $25 per barrel!

The only issue is that you do not have to hold it all the way to December. If the market looks like it is going against him Timmy can sell the contract off, probably at a loss, but better than it could have been.

When this is out of control it can become a real Ponzi Scheme, in Biblical terms you rob Paul to pay Peter. Exactly like what was going on with housing. The problem with a Ponzi Scheme is that you eventually run out of suckers and it crashes!

Which is exactly why OPEC doesn't want to jack production (even if they could) way up. They all expect a big crash. Irrational Exuberance, to quote Mr. Greenspan.

While the housing market (the other Ponzi Scheme) is to blame as well, oil touches every budget point, for everyone and I believe our biggest true inflation issue. They government could step in and freeze oil prices, but that would kill any reason for the oil companies to reinvest, which leads to higher future prices.

A crash is coming. And I hope it won't be too late!

Is Suze Orman's Advice Too Basic?

First let me say I believe Dave Ramsey and Suze Orman have brought more people to consider their personal finances than most other financial writers. Orman has additionally brought more women into thinking more about their finances and take control of their financial futures. However, every time I see her (which, to be fair is not that much) something troubles me.

Her advise is often very simplistic.

I watched the show awhile ago and there was a segment on the show called "Can I afford It?" No offence to the people that called in, but it was like a bad SNL skit.

• Caller: Suze...Can I afford a Plasma TV?
• Suze: Tell me, do you have any cash on hand for Emergencies?
• Caller: No...
• Suze: Any Retirement savings
• Caller: Yeah I have $2500 in my 401K
• Suze: How old are you?
• Caller: 50
• Suze: I wouldn't...get some bonds right away...

That was totally made up but it isn't that far off the calls received. It isn't her problem who calls in, but the way real radio or TV works is that they feed the callers and queue them...some someone tosses her some real softballs...at least when I watched.

Her tips that I have read out on the web were pretty pedestrian as well.

• Don't Eat Lunch out
• Search your closet for lost money
• Use Self-Serve pumps at gas stations

They might as well also include:

• Don't put your money in a pile and burn it
• Don't eat dirt
• Don't try All of the get rich quick schemes...its not fair to others that want to get rich too...

Love to hear you opinion, am I being too hard on her based on the few shows I have seen? Is one of her books a must read? Let us all know!

Nothing wrong with simple, just simplistic! It really comes down to this: If you want to create wealth first you need to spend less than you make. Period. Then topics like Budget, Emergency Fund, 401K, debt management and investing should be reviewed in depth.

Forbes Richest List Out - Big Changes

The Annual Forbes List of the World's Richest is out and there have been some big changes. First off, for the first time in 13 years, Bill Gates is not Number 1! He is replaced by a fellow Omaha native, Warren Buffett (Go Huskers! :) )

Mr. Buffett watched his fortune jump $10 Billion in 2007, to reach $62 Billion. Berkshire Hathaway continues to be the company to beat for long term investment prowess. His friend and List buddy Bill Gates saw his fortune jump $2 Billion to $58B, not good enough to even hold on to #2.

Gates slipped to number three behind Mexican Telecon Kingpin, Carlos Slim Helú, who has seen his fortune double to $60B in just two years. An amazing financial run.

Mr. Helú is part of a growing International trend to the list. Four of the Ten Top Billionaires are from India. In comparison, two years ago, 10 of the Top 20 were from the US, now only four are. The US still leads in total number of billionaires with 42% coming from our shores.

However, Russia becomes the number two country overtaking Germany as the new minted Russian capitalists rush the poll. Karl Marx RPM meter now reads 7200RPM :).

The other interesting stat was how many younger people were on the list. 50 of the 1125 billionaires were under 40! The youngest? Would you be surprise if they were from an Internet company?

It is Mark Zuckerberg from facebook. He just made it based on the current guesstimate valuation of the Social Site, but then again he is already 23 and past his prime ;).

Anyway it is an interesting read. So many different ways that people hit the list. Stocks, Internet, Real Estate, and everything else under the sun.

Me? Not quite yet. Maybe next year. In fact I am going to go see if I can cut my entertainment budget a bit more just to make sure.

Aligning Goals with Reality

Well we are two months into the New Year. Still early, yet 1/6th done. Trends are appearing. The rush and promise of the New Year feels quaint, while new visions of tax rebate check...sorry stimulus checks, dance in your heads. The big question is how is it going? Especially Budget and Goal-wise.

I firmly believe a good plan executed is far superior to an excellent plan in a drawer, but even better is the adequate plan that fully recognizes that the battle plan needs to be fluid. I like to do a look every two months at my goals to see if they are still on track, are achievable and even make sense given whatever has gone on.

This is so important for your finacial goals and budgets. Did you really think you would spend $14 a month on eating out when you had been spending $100? And now you are spending $125, because you also cut the grocery money in half!

So time to breakout the old checkbook and write yourself a check...a reality check. Grab two months worth of data, one month is too short due to ninja bills that can creep up, and do a line by line check of the budget. Check reality vs actual, then rebalance. Once that is done take a whack at your annual goals. Does the reality check mean your a bit behind, if you can catch up do, if not reset! Perhaps you are that rare bird that under-estimated where you would be right now. Sorry no points for lay-ups...push it out!

The idea is to have goals the stretch you but don't break you! Celebrate your wins analyze your losses to see where next time you can improve. Do this and you will be amazed at what you can do!

How are has your first 1/6th gone? Need to readjust?

The Active Veil Of Consumerism

We have a family budget meeting at the end of every month. For February we discussed the good progress we made, when a question came up from our middle child, our 10-year old daughter.

"If we have $2000 in our Emergency Fund and $3000 saved on taxes, that $5000, right?" "Why can't we use some of that to go to the mall like we used to?"

After some chuckles I noticed that others were thinking along the same lines...and probably me too. See when we would get money in before we would allocate some of it for "fun." We would buy something on our list that we had all agreed we wanted. New TV, DVD player, etc.. But not this time.

What we were all feeling was the break from the past.

Before we would "celebrate" our wins more. We would look forward to bonus as it meant a second Christmas, albeit with more expensive gifts! Although this was an illusion...what I call the active veil of consumerism. Sure we had debt, check out the Pinball machine. No retirement, Trip to Vegas. But every grain of sand in the hourglass was working against us. Every spend, pay-off, spend cycle got larger! The Power of Compounding was our Enemy...

That is why with our Success Map firmly in hand we had planned out what we were going to do with this Tax Refund...and it was going to be boring. No Ice Cream, no Pony rides, just put it into E*Trade for our 2008 Property Tax bill.

And that is what we said to her...how doing that in the past, while fun at the time, gave us the debt we are paying off now. And how every dollar we save or use towards paying off that debt gets us closer to our Freedom Goal.

Her reaction: "Ok, that makes sense, but I still like the mall though!"

Is Grandma Coming to Live with Us?

As more baby boomers retire there are going to be some parents that are not going to be in the position of just being able to make it. Starting late with 401k's, higher then expected health costs and frankly, longer life will add to this phenomenon.

This is the flip side of the coin of kids waiting longer to leave. We may end up living with our parents, between homes over half out life! Don't get me wrong, I love my Mom and Mother-in-law, but I could end up with both!

Personally this is not a burden I want to put on my children. And to be fair it would be child...singular, it is always one that is the go to person, either due to closeness geographically or responsibility. level.

Are we ready to become multi-generational home dwellers like many other countries?

My opinion is that, I think a lot of this will be avoided as people work longer and live better then previous generations. 100 becomes the new 80. People are vibrant and sharp, because they have to be. I also believe that the baby boomer are too independent to migrate this way in droves.

How about you? Do you see yourself becoming your parents...parents? If so are you preparing for this now via budgeting, or as part of your retirement plan?

(photo from freakingNews.com)

What Fight Club Can Teach You About Personal Finance

OK...I know I broke the first rule, but given that my last post was accused of being a "fantasy" I thought...I will go with that. It's one of those random acts of Silliness.

I really like everything Chuck Palahniuk writes, but Fight Club is such a great visual by David Fincher, that it transcends for a lot o' folk my age. What a lot of people don't get is that the story is a great allegory for Consumerism and Commercialism. Frankly...a whole bunch of ism's, but we'll focus on the first two.

The narrator of the story is a never named character that is an insomniac, at least at the beginning. As the movie shows, and as someone who has lived through that hell, you live in a daze. Not really awake not really asleep. However you really believe at times that you discover some universal truths...

I am jack's list of things to learn:

• I am not my things - He is only free once his things are destroyed. I don't advocate this...other that your credit cards
• Don't have a house full of condiments and no food - Condiments are designed to Enhance the flavor of food, not to be food. The same holds true with DVD players, Plasma TVs and *Gasp* the Internet. These things are to enhance your life not to be the center of it. Otherwise known as "Stuffitis."
• Follow your Passion - Don't blackmail your Boss to do it, but...
• You won't be free unless you have no debt - You don't need to wipe out the data centers for all of the credit card companies. Break your debt chains as soon as you can.
• You have the control - At the end he has the control not Tyler. You just have to choose to have that power.

I know this because Tyler knows this...

OK...a bit inside, but watching it again the Commercialism allegory really hits home. Probably because I am writing multiple posts about personal finance and budgeting multiple times a day. You start to see better with the sunglasses on sometimes :) .

When Even the Rich Runaway...

Even the working rich are worried according to Forbes. "Housing has imploded, the market's a yo-yo, recession's in the air. And the 'working rich' are learning to do without." This according to Russ Alan Prince, president of a private wealth-research firm and author of the book The Middle-Class Millionaire.

Princes research points out that 78% of the Working Rich, identified as those with $1MM-$10MM in Net Worth and still working for a living, consider themselves "very or extremely concerned about their ability to maintain their current financial position." Furthermore he believes 21% of them are already reducing spending.

Compared to the first half of 2007, the last six months saw a 20% drop in Luxury spending. According to a source in the report, "Luxury consumers have never expressed such a dismal view of their financial status." This is a compounding issue for the economy as the Working Rich are known networkers. In other words they talk to one another before purchasing, which if sentiment is down can lead to a vicious circle of reduced spending. The spending is transitioning into higher perceived value items, felt to be less frivolous.

This is a big indicator the economy is in trouble as this group has been a leading indicator of things to come. Great time to make sure that your debt, budgeting and money management is firmly in place!

BTW - Broke Grad Student is running the current Carnival of Personal Finance with a great spin on the topic! Take a look!

The spending is a mixed bag of information though. Hi tech gagets continue to sell well, but Jewelry is down. Luxury car are stable, but sports cars are slowing.

Save 50% When You Dine Out

As I start to pull together our information for February I am struck by something. Our Dining Out amount, when it is just us two, has really fallen, frankly in half for an average meal. This has allowed us to have, pretty frequently, left over funds in that Envelope!


For us, and probably anyone married with three kids, we often eat out to escape. It is nice to have adult time together. It is frankly nice to not order food through a Clown's Mouth when we do it either! :) We are both foodies, and Mrs. X is an amazing cook so we would good well made food. Unfortunately this can equal expensive (at least to us) and can leave buyer's remorse on the tongue!, not to mention in the past, the credit card!


Guide to Save 50% when doing the Full Dining Experience:

• Drinks - This is a restaurants profit center. If we are gonna have a drink, we will have one at home with our...($12 Savings)
  



• Homemade Appetizer - We plan out those dining nights and there is a great little Harry and David store here that has amazing appetizers (Stuffed Bacon Brie! mmm) that just has to be heated up. I will pick it up on the way home the night before, Mrs. X pops it in at the right time and with the drink above and we are half way through dinner before we leave! ($8 Saving w/purchase)
  



• Specials - Restaurants try specials to see if new things work at that location OR if you are in a quaint getaway, just because they want to! It is a great way to try new stuff and save money! ($10-$20 savings)
  



• Dinner Drinks - We are water-ers now (tap please! love the planet), but we will have a glass of wine. Often they will have a good wine by the glass, especially at a small restaurant, or...Bring your own. Most will charge you a cork fee, but that is nothing compared to 1.5-3x markup! ($10-$30 savings)
  



• Pay Cash - Unless you like doing dishes you will stay to budget! (Priceless!)
  



• Dessert - Have it, but not at the restaurant! Find a great little bakery and pickup some neat little deserts there. Or even go for Ice Cream together! A third the price of having it at dinner! ($10 savings)
  



• Babysitting - Your reduced time out saves money. This is one I give you 100% walk away from if the weather is good go take a walk together, or go to the park and breathe! (skip the savings and take the lady for a walk, bub!)
  

This is still an extravagant night, but she is worth it! But if you can do the whole night for $50-$60 instead of $100-$120 you can enjoy it at the time with no post-traumatic credit disorder and protect your budget at the same time!

College the Poor Kids Way

Mrs. Micah featured a post recently about a sister who was talked into co-signing for her sister's student loans. Not surprisingly this did not turn out well. But it raises an interest point. Many of us are ill prepared for our financial life when we go off to college, or on our own.

Oh sure we think we are. We get signed up for credit card, and maybe even get a FREE t-shirt for signing up! We probably then only use the card for emergencies...no pizza or beer left in the house! Taking our girlfriend out! Maybe even rent once or twice.

Pretty soon that one is maxed, bummer, luckily you get a second one to help pay the first minimum payments. If you are lucky this ponzi scheme keeps up until you leave school and get a real job. Now you are saddled with big student-loans and credit card bills!

Some kids are "lucky." Their parent fit the entire bill down to spending cash and help with those pesky Credit Card bills. They want their kids to have the best start possible. Unfortunately, either situation sets up for potential failure. You either engage in the workforce with pre-made debt chains, or no real sense of how life works.

Our kids won't be like this. First we have made a conscience decision NOT (and I smell the angry emails already) to pay for their education past High School. We will help them with 100% free rent and food, in exchange for chores if they chose to go somewhere close.

Why oh Why you cheap *#$^ !?

Every single kid we knew that went to college on the parent express left school 100% unprepared for real-life, if they graduated at all. They took basket weaving and Klingon 301. They never worked the menial jobs that give you an appreciation for honest work, honest wages.

No I don't want our kids saddled with an insane amount of debt leaving school either. I would rather see them take 5-6 years to graduate and come out 100% paid.

Everyone that I know paid their own way had it hard. But they studied hard and really wanted it. Guess what? When they did graduate they had a huge sense of accomplishment! They, on their own completed one of life's milestones! What independence!

I call this: College the Poor Kids Way!

To do this you can't just throw then in the deep end at 18. You have to make sure they know what they need to succeed in the world. The whys and hows of Credit. The basics of budgeting and money management. Even a bit about investing.

Their first real investment will be in securing more income by having a college degree. Their investment will be in themselves! And what a great investment to make!

In conclusion:

Don't think for a minute that this means we don't value a college education. There are way to many studies that show the value of post-High Scool Education. We just believe that giving the lifetime gift of independance, through life experience, is worth 5-6 tough, but managable years.

(please throw tomatoes..they are softer!)

Our First Winner and Best of the Week

Exciting photo finish as I had some more sign up for my RSS Feed rigt before 10PM PST, the time for the first drawing. The winner has been notified and I hope to get a quote in time for my mid-day post!

For everyone else there are three more chances and you are already entered! If you are already signed up, you are entered for all of the contests as long as you are a subscriber at that time! If you didn't sign-up yet still great chance to win! Sign up NOW!!!

The blog had a great week as week added a bunch of RSS and regular readers, we were quoted in a blog on msn Moneyblog and there were some great posts out there that I want to make sure you get to see!

Best of the Web:

• Mrs Micah - She had a great post about people scrapping her site. This is where sites use code to use your posts as their own, She even included a great form letter!
• ShoeMoney - A great piece about Ringtone scams, greedy News companies and one of the funniest clips EVER about Spam! Do not watch it while drinking Milk as it will come out of your nose!
• My Dollar Plan - Did an amazing job pulling together a cool list of the most popular Personal Finance Blogs by their RSS numbers. We aren't there...yet! But a great "To Read" list.
• Paid it Down and Moving Forward - Sharon does such a great job, she wrote a post that really hit the reason I don't like Dentists...
• Birthday's!!! - Both Need to be out of Debt and Plonkee are celebrating First Blog Birthdays. Congratulations, and Thanks for all of the great insight!

Our Most Popular Post of the Week:

• Mortgage Crisis Vs. Integrity - From the link on msn, this brought a lot of people (for me anyway :0 ) to my Blog!

Milestones:

• Second time on msn MoneyBlog! (Officially beat to death, I know!)
• Biggest Individual day ever at 90 visitors (Inching towards the 100 mark!)
• Over 9000 Page Views
• Over 3300 Visitors!
• Our First Poll Showed that Classical and 60's Music are your favorite to work on you finances by! Thanks for voting!

That's the week that was. There are some great links to check out to help budgeting, money management and your finances!

Dealing With Budget Windfalls

Some of us have irregular pay involving bonuses. These are often based on cryptic calculations that involve the Mayan Calendar and a jar of Mustard...In other words you can't count on them. Sure you might have a pretty good idea, but it is hard when you are expecting one amount and another comes in.

Many with this sort of Bonus don't budget it even though it can be up to 30%+ of our pay or we budget at the lowest imaginable payout. The reason is the last thing you want is when you finally get the check to be disappointed. I have been there. One time I was sure my bonus was going to be $10,000 based on the previous year. When I got the check it was less then $5000, still a great amount...unless you wrote checks or planned out more!

This post came up because I was reading a favorite Blog "Paid It Down and Moving Forward" by Sharon. She and Hubby received his Yearly bonus and she is now Consumer Debt Free (Way to go Sharon!) and well better funded in their Emergency Funds. They also bought one thing; A Dell laptop. A very nice purchase to help her with her Blogging and other needs. While she didn't get beat up her readers, I have seen others that have been, with statements like, "You aren't Serious about getting out of debt!"

Here is what I suggest about these, windfalls be responsible...to a point! Remember, these aren't gift, this is part of your pay. You basically have had it held until the end of the year. You haven't been able to spend or invest it or pay for any little extras. I like to look at every bonus in three buckets; Near-term, Medium-Term and Long-Term. I try to get about 1/3 to each bucket as well.

So this process begins when you are doing your yearly budget. What are you expecting to get? Not the best case but not $0 either. Then I look at what yearly bills I have. Will the bonus cover that? What is it doesn't? In our case, Property Taxes and Christmas. My bonus should cover those, but in case it won't I plan out how much per month I need to put into achieving that amount and pay towards it. When/If the Bonus arrives I fully fund it.

When the money arrives I fund those yearly bills first, then I look at my near-term needs. Any Bills that is would help to either catch up or get ahead on? If so I do that. Next-up, I start working, or reviewing my Baby Steps. Is my initial Emergency Fund fully funded? Do I need to catch up on any bills that aren't urgent, but are important, like car repair, new tires, etc..

After that I jump into the big pool of Baby Step #2, paying off consumer (non-mortgage) debt. If, and only if, that is all done, I suggest getting something that is in your "Would be nice stack." I would put a limit of no more than 5% of the total, it can even just be part of a uber-vacation fund you are saving for! The reason is that If we don't treat our selves every once in a while we will blow it big time at some point! Like a good diet that Ice Cream Sandwich won't kill you once a month or so...every night though...

Beyond that I would suggest you work the rest of the Baby Steps!

So Here is that Order Again:

• Yearly Bills
• Near-term needs
• Emergency Fund Baby Step #1 - Initial Emergency Fund
• Important, but not urgent bills - Tune-up, Car Repair, Piano, etc
• Baby Step #2 - Pay off as much consumer debt as possible
• Get something that is in your would be nice list - Not to exceed 5% of bonus Total
• Baby Step #3 and Beyond...

I am not a financial council. I am just someone who has had a lumpy income for the last eight years and made all of the mistakes you can! Windfalls don't happen everyday! Go get advice if you want it. Just get out your Success Map, Budget and work your Money Management!

Congrats again Sharon, I loved this line from her Blog, "while it's WONDERFUL to be cc and car loan free, we will not lose focus and will continue to SAVE. We will NEVER, and I mean NEVER have credit card debt again."

Don't forget to sign up for my email RSS feed for a chance to win some great software from FruitfulTime, a $50 Value!

Giving Away $50 Software and Best of the Week

Great week all around for the blog we had our biggest single week ever with Traffic, began our first RSS Signup contest, had more comments then ever, AND read some truly great posts out there this week.

First on the RSS signup contest, there were some questions emailed to me. The contest will run for the next four weeks. On each Saturday night during the contest I will run a list randomizer to pick a winner from my Email RSS list. Unfortunately there is no way for me to pull the regular RSS list as well, so if you are a standard RSS reader, just sign up for the email version to enter yourself in the contest! Second there is NO cost to enter, just sign-up! And last NO you don't need to enter every week, just once and you are in for every drawing. So enter early, to be entered into all of them!

Next it is time for my Best of the Web:

• ShoeMoney - A great Post/Video this morning. A Rap about SEO (Search Engine Optimization). Great starter course in the shape of a Rap tune...pretty original, and catchy!
• Collecting My Cash - This post shows really well that good people are hard to find, but you better do whatever you can to keep your Great people, which Wealthy! is...of course!
• Catherine Lawson - A Total favorite blog (and person!) had a neat article talking about Bands blogs. Being a musician at heart, if not at practice, this had great points for all bloggers!
• Ian Denny/ Phoenix From the Ashes - Every time I read his blog it feels like I am reading the beginning chapter about a future king of the business world! This lesson is about Cash Flow. It is written in the Business Sense but it plays the same for all of us.
• John Chow - John is one of the most successful bloggers out there. In this post he explains why you should set up your business separate from yourself.

The Most Popular Blog Article of the week according to Feedburner:

• My New E*Trade Account Sucks - STILL all messed up by the way! This is tomorrow's lunch time fun!

Milestones:

• Over 8000 Page Views
• Over 2800 Visitors (more than 500 over the week!)
• 120 posts!
• First RSS Contest!

That's it. There are some really links to check out to help budgeting, money management and your finances!

Five Great Ways to Sharpen the Saw

I am a fan of Steven Covey's "7 Habits" Book. All of the tips are really helpful to see you become more effective.

For me though, if you really want to make some movement in your finances, budgeting or life in general, one step more than others gets ignored. And it is a perfect Saturday topic...#7 is "Sharpen the Saw."

This comes from a story about a lumber jack that is sawing harder and harder and just not making the same progress as before. When someone asks if he has sharpened his saw, he says he doesn't have time, he needs to saw.

I am really notorious for doing this...getting so myopic that I am only focused on the trees, not the forest. I need to remind myself that a well-timed break can actually save time sometimes! I this spirit I offer Five Great Ways to Sharpen the Saw up and get you back to top form in no time.

Saw Sharpeners:

1. Exercise - I know, half of you jumped to number two, but it is true. Not only is it good for you, but it can take your mind off your troubles, even if it is 30 minutes on a elliptical or walking around the neighborhood.
2. Hobbies - I can tell a real difference in what I am getting done now vs when our little Monday and Friday Golf game was going on. I am not the only one, my wife said just last week, when am I going again. Luckily this one gives me a little of number one as well.
3. Take a class - On something 100% not related to work! Non-credited if needed. Like to cook, take a once a week French cooking class at the local Community College. Learn auto repair. You'll actually save yourself money in the future!
4. Meditate - Oh now I've lost you :) It does need to be in an ashram in the mountains, just sit in a hot bath-tub and clear your mind...you too guys. The ladies have it right, a hot bath can really relax you. Let your problems float away.
5. Read - This is something other than the sports page, or the grocery coupons. Actually go to the library! There are great people who work there (like Mrs. Micah) who are there to help open your mind. So I don't go ing a rut of reading the same thing, I will ask the librarian, what's cool, what are people talking about? I also like Biographies as it gives you real world example of people that have gone through either similar issues or even worse and come through.

In a 24/7/365 world we need to break every once in awhile, except from this blog, read it everyday :) Seriously though just clearing away a little of the mind clutter will really take you much further, much faster, whether it is life, budgeting or managing your money!