Our Top 10 2008 Financial Goals...

OK, time to put it on the line with our Top 10 2008 Financial Goals. Over the course of the year I will provide updates on how we are doing and hopefully knocking these off of the list!

1. Pay Off State Farm CC - $2836.22 - We only have two CC's left to pay off, but they are both good sized with horrible Interest Rates. This is our current #1 snowball debt and we are overpaying the minimum. I hope to pay this off when my bonus comes.
2. Pay Off Car - $4594.87 - We were overpaying on this loan until we began following snowball payoff plan. This would be really nice to retire this year as it is a $350/mth payment...on a Taurus...doh!!!
3. Pay Off CitiBank Platinum CC - $8989.16 - Our oldest CC. When we got into trouble though they jacked the rate. High $ + High Rate + High Suck factor! I am going to work the Rate down and if my bonus will pay off the first two debts, our snowball may be able to kill this one too!
4. Pay Off all CC debt - This would be accomplished with the above and not charging anything at all! We would still have our Lines of Credit to pay off, but they are at interest rates 66% lower! This would be a big boon to our FICO scores as well.
5. Save 100% for 2008 Property Taxes - $5000 - Don't want to borrow to pay on this one this year. Already saving for it. Hope my neighbor isn't "helpful " again. May fund part with bonus...can you see I am really counting on a good bonus :)
6. Keep Snowball 100% Intact - If we pay off the above debt our snowball amount shouldn't change, but it is easy to justify other uses when minimums are much less...Must protect Snowball!!!
7. No CC use - We will use Debit card were we have to, but it's Cash and Direct Electronic Payment where possible.
8. Increase Average FICO Score to 720 - Current: 692.7 over three bureaus - Need to refinance house in 2009. ARM will end with bang otherwise. As soon as I can afford to , want to move to fixed loan. I will sleep much better. 720 is the basement for the best loans, really want 750...one step at a time!
9. Stick to Cash Budget System - This has been key to not letting us go over budget. However, it is a pain. Our society IS trying to be cashless so they make you go inside to pay for gas, cannot use the self-checkout at the grocery store, etc..
10. Net Worth Increased by $20,000 - This would be a great move and poise us well for 2009.

Our stretch goal for the year - This would be to get to a break even Net Worth. This would be a tough goal given were we are, but if we stick to budget and work our plan we may be able to do it.

Thanks to all for your support in 2007 to reach our goals in budgeting and money management. We can't wait to mark some of these goals off as well!

New Years Eve Rockin' Carnival of Finance...

Over at We're in Debt they are having a great Personal Finance Carnival. All of my favorite posters are there including great ideas on Budgeting, Credit Cards, Managing your account...and even Star Trek!

Life, Liberty and the Pursuit of Money is pleaded to also be a contributor with our "Very Wealthy People's Characteristics..." entry!

Thank to We're In debt for including us in the final Carnival of the Year!

Managing your Finances: Taming Suffitis...

I admit I have terrible Stuffitis. I stole this phrase from Dave Ramsey, but it really sums it up nicely. If I am going to ever get total control over my finances, I will need to learn to curb this base instinct.

I really have no excuse, I am in marketing, I know what and how the messages are crafted, yet, like the stupid bug who watched his whole clan march into the light, I feel powerless at times! No, I haven't gone off the deep end and charged a bunch of things, but it is really easy to self-justify some of these item as needs as opposed to wants or desires.

Here is how I am making sure to keep Stuffitis at bay:

• Chop up the Credit Cards -It is really easy to say, I might need them for emergency use only! OK, that would be one...many people hold 5+ credit cards. If you have that many emergencies at once you may want to consider upping the insurance.

• Use Cash Whenever Possible - Cash is finite; when it is gone it is gone. Cannot be overspent. Its a physics issue! Yes I am foregoing 2% cash back on left-handed tomatoes, but I don't have the best track record...maybe some day I can trust me enough to do that, not yet though.

• Bad Influences - We all have those friends that are shopping enablers, or parents that say, "Oh come on, $5 won't kill you," or, "You deserve it, you work sooo hard!"

• Track Everything - I guarantee if you haven't been doing this you will be appalled. "$550 on cat toys? We don't have a Cat!"

• Try to Appreciate what you DO Have - This is the toughest, but the most rewarding. Sure I don't have the fanciest car right now, but I also don't have the equivalent of a second house payment either!

I am sure you have your own ways, but if you want to be really in charge of you Personal Finances, I agree with Dave Ramsey...you have to tame your Stuffitis!

Budget vs Ninja Bills...

I have talked about Ninja Bills before in the blog. They are when you aren't expecting a bill from somewhere, or a lower balance, then...Bamm! Something comes up that could potentially blow your budget.

Well, for the past three months we have been pretty good about our money management and budget. Nothing popped up and the Ninja from the picture hadn't attacked. Until yesterday.

I am currently hard at work on 2008 budget and goals and got the mail yesterday. We received our gas bill. Now we are lucky in Southern Oregon that it is pretty temperate. Never super cold or hot. This has been a big savings compared to out bills when we lived in Utah.

So imagine our surprise when I received our gas bill yesterday for $280! OUCH! This is nearly $200 more than last month and WAY above our average. This happened due to it being colder and bad thermostat wars breaking out. Well luckily we will be able to pay it due to our more recent ability to better manage our money.

To pay for it we will reduce all of our fun money (dining, entertainment) and take a bit from our Emergency Fund. Given that we all participated, we all pay! Before I would have had to pay for this by not paying another bill, or even worse using a credit card.

So next time you are deciding between putting a little away in your Emergency Fund or Freedom Fund, remember: this guy could be lurking in your mailbox next...

Very Wealthy People's Characteristics...

In preparing our final 2008 budget and goals, I came across an older book of mine from the late '90's dealing with Personal Finance and Managing Money called, "The Complete Idiot's Guide to Getting Rich."

Well I must be pretty smart, because after owning the book for 12 years I have a negative Net Worth!

Anyway inside the front cover of these book was a tear out page. I don't know if the publisher hoped these would become tradeable or collectible like baseball cards, but lucky for me they didn't cause mine was still there.

All kidding aside it had some great wealth level indicators and such, but the best part was this little list of the Top Characteristics of wealthy people...and they ring very true of everyone that I know who is, as we say...with money.

Here is the list:

Have a Passion for What You Do - This was a key to everyone that I know who have been very successful that I have had a chance to really talk with, including the CEO of a couple publicly traded companies that I have worked for. Both of them I believe would be doing this whether or not they were being paid for it. The seriously enjoyed the business and role they were in. Many would say, "Pay me that kind of money and I would be passionate as well!" Both of these people by all account have always been this way.

I have seen very successful people who didn't care make it as well. They made it on drive, determination and will...and most either seemed miserable, or were busy planning their second career as soon as they had enough money. So call me naive, but I believe successful people get the position because they are those passionate people., not because they have the position.


The Ability to Make Decisions - I once heard someone define genius as the ability to make order out of chaos. So many people that describe their best boss say that the person would weigh all of the input, analyse the facts and make the call. They would spend much more time to make sure that everyone understood their role.

This goes to one of my personal mottos, which is: A Good Plan executed is better than a Perfect Plan in a drawer. A good leader makes decisions, but isn't afraid to make course corrections or change plans in the face of enough evidence.


Discipline - When you look at successful leaders, whether in politics or in business this is a huge difference maker. This can be as small as taking care of your finances or health. It can be as important as not taking a big pay raise when you ask your team to do with less.

I see this everyday on different blogs: Doing the right thing everyday, even in small amounts is so much more important than grandiose gestures. The ones who really get their financial houses in order are the ones that make the lifestyle changes, and make them part of who they are.

Patience - I see this as a key for every investor. If you look at the mix of stocks at Waren Buffet's Berkshire Hathaway 3-5 years ago it is pretty much the same, with maybe more added on. Now show me a mutual fund that is the same way. You can find them, but they are rare. So many chase the fat buck running to the hot stock or sector. If it is OK for one of the world's richest men (that made most of their fortunes investing) it may be OK for you :)

This one is going to be a prime goal for 2008 for me. I will have the patience to manage my money, pay down my debt and increase my savings.

Or you will be free to mock me...

Zen Through Better Budgeting...

It has been three full days since Christmas morn and I feel something strange. A much lower stress level! I was asking myself, why I was truly not stressed out Christmas Night. Then it hit me, it was through better budgeting, managing our bills and cash management. I just wasn't as stressed out as usual Christmas night.

"It is all paid for!" I told myself. I have made it through the month of December actually lowering my indebtedness rather than adding to the pile. There are NO bills coming in January, as we saved and paid for everything in cash. In fact we have begun (albeit slowly) to save for next Christmas.

Here is how we did it this year:

When we decided to get real with ourselves, one of the realisations was, " What will we do about Christmas this year?" We just couldn't do what we had before and rack up huge credit card bills. One we cut them ALL up, except our debt card. And secondly we wanted off that Tilt-a-Whirl of Doom.

So the next step was to determine how much we wanted to spend in total (a top-down approach) then we said here is our list of people we usually shop for along with us and the kids. At first it worked out to about ,47 cents per person...a bit low. So we went and paired the list to who really was close to us. With having 3 kids, it was still below what we wanted to do so we made two categories of people, Us and Them (pretty original, huh). We came up with a budget per person for the Us category and a pool of funds for the Them's (my English teacher would kill me if he saw that statement...).

The next step was harder, we talked with the kids about expectation level, which we had set WAY too high up until now. We then asked them for their list and reminded them their fate was in their own hands. If they wanted a big gift...that was probably it, or they could have a series of smaller gifts.

We also dropped another bomb...we wouldn't give them money to shop for us or each other, but we expected them to at least shop for each other and established a minimum present price of $5 on each. This price floor avoided my middle Daughter (who will never be broke) from buying a pencil for each of her siblings which was her first offer! She is why the rule was established! Since we started this discussion at the end of September they had plenty of time to save.

Next...the Them's...They are all really good people, but they aren't my kids or wife so they are lower priority. We wracked our brains for what to do here, then we decided to have family pictures shot and given out as many had asked for these. To be fair ,we warned all that we were doing something like this so we could avoid the big gift vs small gift possibility. We also asked those Them's to focus on the kids if they were to buy presents at all, or to do exactly what we did, as we would love to get family pics from them as well.

Now the test...we've saved the money, taken out cash so we couldn't go over, then prepped our list. In order to keep track of what was who's money we separated the money in a bigger envelope with 3x5 cards with the gift receivers name. This kept us fair between the kids, and if we did want to go over, we have to take it out right then, from someone else's present money. This avoided many prior years issues of going over on one, then making up to the other, now #3 wasn't balanced...a never-ending spend spiral!

So how'd we do? Exactly on budget (well, actually a received a gift-card from work so I went over on her, but I used the gift card to do it!). We managed our money, we kept to cash so it was easy to track, and everybody had a great Christmas. Oh yeah, and it looks like we reduced our debt this month by $2,940!

All I can say is this worked for us, we are planning to do the same every year and enjoy our Zen...

Managing Money: Get Everyone Involved pt2...

For the second part of Managing Money: Get Everyone Involved, we are going to talk about establishing a work area, cash management and follow-up. Once again this is just how we are doing it, you may find tweaks that work better for you; go for it! We tweaked the Ramsey system for us take any of this you want and turn it into something that fits your personality. It is the only way to make long-term change.

Work Area - I firmly believe that having someplace, a desk, a box, even a bedroom drawer where everything is kept is an important thing. The second, is to make sure that your significant other knows that space as well. This should have files on all bills to store afterward and your checkbook as well as credit cards, if you aren't prepared to chop them up yet. You want your family to understand where all this information is in case of anything happening to you. Banker Girl has a really good article about why here.

Cash Management - For us, this has been key. We use cash for groceries, dining out, entertainment, gas for the car, the kids allowance and ours. This is where we have made most of our improvement in making budget. My wife didn't want to be in charge of an area, but since we are in this together, she took over all cash funds, except the car and allowances. She is 100% in charge of those funds. She has done so well, and I am not just saying that cause she will probably read this :), we have cut nearly 33% off of our grocery bill through better planning, coupons and using only cash.

This has really also squished the Budget Police mentality around here. As I said before it is OUR Families money, our family should have a say! The kids have their votes on how to spend the money as well. They make their pitches on dinner and when we go. So when they used to push to eat out all of the time, now they are often the first to say, "I want pizza this weekend, we better wait!" 180 degree turnaround!

Follow Up - We have a review every weekend after I get paid to review how we did for the previous two weeks. We then go to the bank and get the cash in the denomination we need. I bring one of the kids each time so they see how much money this really is and where their allowance cash comes from. Initially we got some strange looks asking for $x37 in $50's, $20's, $10's, $5's and $1's but now they know us and it goes pretty quick. I may have even convinced some of them to try it as well.

We will also have a quarterly review to check and see if our levels are right: Did we over budget for Gas? (not likely), Under for Groceries? etc.. The most important part is that we discuss it as a family. In learning these lessons now they will hopefully find that personal finance, budgeting and avoiding bad debt gives them a leg-up later in life.

And that is the best thing we can do for them...and ourselves...

Managing Money: Get Everyone Involved pt 1...

OK. It is the day after Christmas, heading to the New Year and new, New Year's Resolutions. Before you break out the Sharpie and commit those to personal growth opportunities it is time to get everyone in the house involved with Managing Money!

For us, when one person has to be the Budget Police it is doubly hard to make it. One person feels the whole burden on themselves and resents the others not participating, and those being dictated to on how/when to spend, resent being treated like a child. I truly believe this is a key reason people fail, it sure has been for us. It isn't just us either, Dave Ramsey devotes a whole chapter to it in his book "Financial Peace."

But I don't think Ramsey goes far enough. I believe that you have to get the whole family involved, down to the smallest ones who have a basic understand of what money is and does. If followed, my hope is to instill "cause and effect"understanding to them regarding finances.

Budget - First off, don't use the word budget, like you do grounded! It cannot be presented as a punishment, but as a way of life! Have a budget that everyone has a part in building. Once all of the "must-haves" portion of the budget is ready gather the family and have everyone apply some group-think to the remainder, if any. For example: Is it more important to the family to dine out or rent/buy DVDs? By asking the question, you get buy in. This is so important when the question comes up, "Why can't we do X?" If you are in a situation where only basic musts are covered by the budget, I believe it is important to make sure everyone, without installing fear, understands the financial situation. Trust me, they know there are issues, and if you don't tell them, they will make up something worse in their heads!

Ramifications - What if we beat our number? We take our "Overflow" out every month and put into a fund for Holiday Fun, extra decoration or other Family Fun. The family earned it, they get to put it to what they want! Want to get your kids to turn off lights/TV, etc.? By doing this we have said $x is what we have for our Electric Bill, if we beat the number it goes into the fund, if over it comes out of our other areas like Dining or Entertainment. The first month they were great and we saved enough to buy some extra Halloween decorations they wanted. This month we were over and dining was cut! Already my 7 and 10 year-olds are running around and chastising anyone that leaves on a light!

Please understand these are just things that are working for us. Personal Finance and Managing money is so much less of a chore when everyone pitches in.

Pt 2 tomorrow...

A Tribute to Banana Nut Bread and Grandma...

I was planning to write something else tonight, but my mind kept coming back to Banana Nut Bread. Truth is I don't really like it, but yet right now I am desperately craving it.

You see every Christmas Eve growing up (the longest day of the year for a kid) we would pack up the car and drive up to Logan Iowa. 99.9% sure you have never heard of it, but it was a very special place. It was where my Grandma lived during all of my childhood.

All of my Father's brothers and sisters (10 total children, 9 who lived into adulthood) and all of my cousins (7000 of them :) ) would gather at Grandma's house to get together, run around, drive the adults nuts, talk about our Christmas wishes, be teased about the whereabouts of Mr. Santa, eat, do our present exchange, then collapse into a pile to be carried back to the car and whisked back to our beds with visions of...you get the idea.

We would also get a loaf of Grandma's Famous Banana Bread to take home for the next day. Like I said, I could take it or leave it, I was really a fudge kind of kid. But even after we all grew up and moved away every year we would get our little loaf of bread. It was the family inside joke; "Wonder what we are getting from Grandma?"

Unfortunately not this year. Grandma passed away right before her 88th birthday. And as these things go I wasn't able to get out there to see her much. Really less than 4-5 times after college. Just too busy. My mom and her husband as well as my brother, sister-in-law and brand new niece are all out here so it was hard to get out there, cause we'll do it next year.

So for all of the presents that I will get and give on Christmas, the one thing I want most won't be there...

So when you are in the bustle of Christmas running to and fro, think about what your Banana Nut Bread is and really gives thanks for it. It may be the last time you have a chance...

I miss you Grandma, God Bless

Our First Financial Christmas Carnival...

A quick supplemental post. We just had our first contribution to a Carnival Posted, and it is a special one!

http://www.thedigeratilife.com/blog/index.php/2007/12/24/money-finance-and-fancy-the-carnival-of-personal-finance-132-whimsical-christmas-edition/

Silicon Valley Blogger is hosting an Uber-Huge Christmas Carnival to get you a ton of great pipin' hot tips and article from all over the Blogsphere.

I gotta go...got some reading to catch up on...

FICO Scores and the Credit Card Crunch...

There is a double Whammy coming down the pike to sub-perfect credit card holders out there.

First FICO, Fair Isaac Company's scoring arm, is rolling FICO'08. This is a code update that they due every year or so, but this year's is a pretty big change.

A quick primer first...Your FICO scores are what determines how good of a loan you get, or how low of interest rate. Banks use it as a "fair" way to measure people against each other. FICO scores range from 300-850; but really you need 600+ to have a shot at real non-mob-knee-breaking credit, and 720+ to get the scary perfect deals. There is a ton of great info out there about FICO scores and I suggest that since your finances depend on the score, know it and review often (yearly worst case, I look every month because I am paranoid).

But back to the double Whammy; the FICO'08 code roll changes some key scoring notions of previous models. Basically it doesn't penalize as much for having a bunch of credit files, but nails you harder for having a higher percentage of used credit.

That means some of us Ramsey Debt Snowball believers are going to get hit on our numbers; potentially up to a 25 point swing. This is due to the basic tenant of the snowball; pay one debt off at a time, make minimums on the others until the first one is paid off, apply it along with the second minimum to pay more than the minimum.

It will hit snowball users because many of us have maxed or high debt-to-credit ratios on our non-snowball payments cards. Not to mention some cards have FICO triggers for their Rate changes...so basically because your score changed (and even though it had nothing to do with you) your rate could go up. In some cases...a lot.

The second whammy is that since the banks are getting whacked right now with bad home loans which is leading to bad Credit Card loans, they are tightening up their approval, or at least the reins on who gets the better offer. This means it will be harder to dump those higher rate cards for something more comfortable.

Any silver lining...especially on Christmas Eve?

Yep, some will actually get a score boost if they have generally under a 35% utilization on all of their card and no missed payments. That is huge! Also, we are in an interesting time in regards to FICO. The big three Credit boys, Trans Union, Experian and EquiFax are all trying to bust FICO's monopoly and possibly get there own model that they don't have to pay for. To date, only Experian is beginning to roll FICO'08 because of this.

That being said the end of the year is not a bad time to plan out when you are going to check your credit, also make doubly sure to check prior to any major purchases. This does not mean that you should stop working your debt plan or switch to a new one. It just means there are new rules and you are better off knowing them before you play.

The embarrassment you save could be your own...

The Christmas Gift Returning Bandito...

Let me first say that I am a very grateful and gracious person, not to mention humble...OK, I fail at all of those often, but I do have a big ol' soft spot; presents.

I enjoy getting them, and I truly do appreciate the effort that one goes through. You have to decide what to give (which is the hardest part for me), you have to buy it, then wrap or ship it and wait to hear the reaction (my second hardest part of the gift-giving experience).

This empathy may go to far though based on what I know about retail. January is a great sales month for stores.

Know why? People return items and then add in some "Grandma Money" and buy what they really wanted. Add this to the grundle of broken things that aren't directly replaced and you probably have 10% (a number completely pulled out of my mistletoe) of gifts that don't stick.

Confession time: I can't do it...I feel too bad to return something. I think the only time I have returned something is when it was broken and I actually liked it. I was the only one excited to get the same item back from customer service!

I am normally a very practical person. I have no problem when someone returns something I gave them. I want them to enjoy their gift. My wife and daughters have no issue returning anything. Their dying great-grand Uncle could have bought them a gift, told them the meticulous planning that went into getting it, and then the next day they will be in line ready to exchange it for a Narato backpack. Well ,at least my daughter would.

I really think it is Rankin-Bass' fault. Who are they? All of those Christmas shows that are playing right now with the faux 3D people...You know, "Rudolph the Red Nose Reindeer"...

Anyway Rudolph and this wannabe Dentist Elf go on an adventure (you would have to see it, that made it sound like a Tarantino movie) and they find the Land of the Forgotten Toys. Toys no one wanted...totally depressing. Kids in third world countries asking for bread and kids just dumped these poor toys. Sure the Elephant has a Pirate Hook and lead paint, but come on, cut him some slack...But I digress...

For me it really is the thought that counts. It may mean that I won't get the Super Death Star I wanted, but at least my Light-up Reindeer tie won't get deported to that horrible island and I won't feel like the guy in the picture...

AMT, it isn't just for Breakfast anymore...

Congress passed the Tax Reform Act of 1969 and introduced the Alternative Minimum Tax targeted at 155 high wealth families that basically were using every tax loophole to, although legal, avoid paying any real Income Taxes. Basically it isn't really even a tax, it is a way for the government at a certain income level and tax liability quotient to dis-allow exemptions.

Brilliant!...Except for one, teeny , tiny little issue...They didn't index it for inflation. Meaning that if the threshold was $150,000 in 1969, it is $150,000 in 2007! Never mind that $150K in 1969 dollars equals nearly $500,000 (actually $461,217.50 based on 3% inflation over 38 years)!

So what happened is every year it snagged more and more families. Well not much political will when it gets the top 155 families or the top 300, top 500 even, but top 2 million...oops!

"Over the coming decade, a growing number of taxpayers will become liable for the
AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT
liability and nearly every married taxpayer with income between $100,000 and
$500,000 will owe the alternative tax. Rather than affecting only high-income
taxpayers who would otherwise pay no tax, the AMT has extended its reach to many upper-middle-income households. As an increasing number of taxpayers incur the AMT, pressures to reduce or eliminate the tax are likely to grow."

That was a quote from the Congressional Budget Office in 2004...sound familiar. It should, it literally comes up every year and nothing is really being done.

Problemo #2 is that it now pulls in a ton of tax dollars now. In case you had not heard Congress prefers to keep the coffers filled, this would be a major hit to scrap and go back to the original purpose.

How much moola are we talking about? Over the next 10 years between $850 million and $1.5 Billion! Enough to buy every man, women and child in the country a not-so-Happy Meal.

This will continue to be a hot button until it gets solved, Congress barely got this year's patch on AMT this year passing it a few days ago. Given the last minute nature of this, tax refund this year could be delayed up to four weeks according to the IRS.

This is really a great question for everyone to press on to their Congressional Representatives.

"What are you doing about the AMT?" Cause it isn't just for the Rockefellers anymore...

Viva Wall Street...

Stock Pickers Paradise!

Can't Lose Tip

My Doctor told me about this new drug...

Stock tips. OK. Most of us at one time or another have heard a juicy stock tip. Whether out playing golf, on a blog or from a friend these little glimmers of fast money dance in your head.

I once had a boss who was enamored of them. This was a non-drinker, non-smoker, non-gambler who was straighter than fresh cut wood. When we went to Las Vegas for trade shows he wouldn't play the nickle slots, as it was a bad investment!

So one early January a co-worker and I told him I heard about this experimental drug Oigaleb. It was Italian and not on the market yet. It cured some horrible disease and was in stage IV clinic trials. That we could get in for a small investment. It WAS a risk though, but it had a 50/50ish shot at a 100% upside.

He offered to write me a check right then for however much I wanted!

I said OK, but their are three types; the red vaccine, the black vaccine and a really experimental green vaccine, this one was extra risky, but it had a 1800% upside, but only a 1 in 18 shot in being the one. Only one of these could come in, but according to my guy it was a 100% probability that one, and only one would.

He then asked, "What was the most he could invest?"

"$50,000"

"Per vaccine?"

"Uh...yeah"

"Done!"

He then proceeds to write me a check from his ETrade account for $150,000! At this point we stopped him and explained that we were talking about Roulette, and Oigaleb was Belagio backwards! Not a drug...He played it off like he knew all along, but it really did wake him up. What he was doing was gambling not investing. If you want to do that, go to Vegas at least they will comp dinner if you lose...

Link and the Mod Squad...

This has been one full week on my blog and it has been really fun. I hope all of you (both :) ) that have read it have enjoyed it. From the blog I have had the great pleasure to see a lot of other great blogs out there.

As I see them I am trying to make sure I add them to my "Good Karma" Section. I call it this since I think these should be exposed to a wide audience since their is some great stuff to be learned.

If you like what you read here and want a link, let me know and I will be happy to add your Blog as well and exchange links. This is a great way for everyone to increase traffic to areas and sites they like.

Thanks for all of the great suggestions. I look forward to the next week...

Emergency Fund vs Ninja Bills...

Many self-help finance books discuss the need to have some back-up Emergency Fund. Well for years I resisted, and I am sure some of you are right now as well.

"I have Credit Cards! Why would I stick my hard earned money in a savings account with less then 1% of Interest. I am so much more flexible this way I have the access to emergency funds in my wallet at all times!"

Problem was I was using my card for everything: car expenses, golf clubs, trips, signed pictures of Bradgelina (kidding). I wasn't paying them off every month and often when something would come up I would rob Peter to pay Paul (or at least blackmail him).

For the last 90-days I have had a $2000 Emergency Fund in my Wells Fargo Savings attached to my Checking account. We came up with that amount by looking back for the last few years issues that have come up. Car issues, Home issues, illness and found that while most were under $1000, a couple (car) were closer to $2000. This cushion helped us sleep at night knowing that if most things came up we could handle them.

How did we get it saved up? Basically we paid the very minimum on anything we could, i refinanced a much lower rate on some bills and paid our property taxes and we had some left over. (Before we would of spent this as a bonus to ourselves for being so good!) It took a couple of months with NO extras for us.

But now we have it. This fund is especially great for what I call Ninja bills. When you are first getting your finances together bills seemingly pop out of nowhere...like Ninjas..."Honey what is this bill from a Wine Club?" "What is this old gym bill still being sent", etc..

In the old system Ninjas were deadly. If we had the credit we charged it, if not we would get some stupid interest signature loan until my next (hopefully) bonus.

This is known in psych terms as a viscous circle. No money to pay debt so you borrow to pay debt which you can't pay back because of your debt...

Now we have had a couple Ninja jump out at us, but we have defeated the evil "nomoney clan" with our emergency fund armor.

We broke the circle. Now even when things come up we can handle it. We only use the fund for emergencies (non-shopping kind!). Since then we haven't yet had to touch a credit card!

In the words of Keanu Reeves...we know Kung Fu...

Just Seven More Shopping Days...

I saw that sign outside of the mall on the way home tonight. I guess for people that have never heard of Christmas, that may be helpful. If you are Jack Bauer from 24 and cannot see the little clock on the lower part of the screen it is also helpful. For most though it is a way to goad one more purchase out of you, or maybe even more.

By the way Black Friday (the day after US Thanksgiving) isn't called that due to the crush of people in a Black Plague sort of way. It is named as such as the day when retailer profits for the year turn to the Black (or positive).

Imagine that...a whole year of losses, then just 40-ish days to cover everything!

It isn't that the margins get better, it is that people who normally wouldn't think of shopping for Uncle Stu any other time, including his birthday, frantically search for the perfect gift for the person that they barely know or perhaps even don't like. It is actually rude not to! I have seen a lot of blogs talking about buying for in-laws that expect gifts even when the person is really trying to get their finances in order.

Not to say I haven't done the same thing!

Not this year though. By setting an exact amount to spend and using cash, it really came down to priorities for me and my wife...the kids. If that offends some people...Bah Humbug :)

However...I would be remiss if I didn't at least act gracious to anyone reading this. I am truly grateful that you take your time to read these entries, and I probably read yours! Thank you!

With that said I still need to get Uncle Stu a pipe cleaner organizer. Quickly, since there are only seven shopping days left...

New York transfer to North Dakota Anyone...

I just passed a year in the new job.

In reality I really should say I returned to my old place of work. You see, I worked there six years ago in another function. It was a tough decision to make for me. I liked my previous job. It had a better title, better perks and a little bit better total pay package. I built the team from five to 14 and for the most part they were really good and I liked them all. The new gig isn't chopped liver either, just a change in trajectory.

So why leave?

This ties to a question that I wrote in http://www.myopenwallet.net/ in response to a Madame X question about living in New York. I twisted it a bit to ask the following:

(For New Yorkers or LA'ers, etc.) Everyone complains about the cost of living in New York or LA, but if you could make the exact same salary (not adjusted at all for cost of living, but dollar to dollar) would you live in Fargo, North Dakota?

The only response laughed me off the page (which I expected). But think for a moment, we are all budget mavens here, you would have 30-50% more disposable income, the day you get there. On top of it I believe there is still no State Income Tax!

This was posed to not mock North Dakota at all, I grew up in Nebraska and love the mid-west...as an adult, not so much as a pre-20 year old! It was really posed to make us think, how much of what we love, would we give up for financial gain.

My answer?

Pretty simple, I packed back up and returned to Oregon 'cause it was better for my family. And you can't put a price on that, can ya...

A MAP to Christmas...

I am not sure how familiar you will all be with the concept, but I thought that it may be a neat topic to discuss MAP.

No I don't mean Map Quest, Google Maps, or those 180-panel maps that cannot be refolded. I am talking about Minimum Advertised Price! Most stores that you will shop in this holiday adhere to this policy and those that don't, well you either see key products advertised or potentially even available.

Ever wonder that, for the most part, everywhere you go the Wii is $249 no matter pretty much where you get it? Don't cha thick Wal-Mart would try to under-sell Best Buy on this (if they had them) just to get you into their stores?

No can do.

There is probably a Minimum Advertised Price for the piece or perhaps even an Minimum Selling Price.

But why would Nintendo care, they make their money selling to Wal-Mart and Best Buy, locking in their profit? Basically to make sure that all of their dealers have a chance to make some margin on the product. Nintendo cannot afford to just have Best Buy and Wal-Mart as their only dealers, because they probably (deservedly so) get better pricing based on the volume they buy.

Basically without this protection, little Mom and Pop shops could be crushed.

In fact, in many cases if you won't adhere to the policy the vendor won't open (or keep you) you as a reseller. This is why you rarely see Sony in Costco. Costco won't sell at an agreed upon price as they are an EDLP reseller, or Everyday Low Price. This means the generally they price cost up. They want to make X on light bulbs so they charge their cost plus X margin. So if they want to sell Sony they have to find a whole seller that will sell to them, albeit at a higher price.

Until recently all this policy was kind of on the fringes as it walked a tight line to price fixing which is illegal...until recently.

The Supreme Court (not to be confused with the Supremes in court) recently handed down a verdict that made it legal for manufactures to be able to set Minimum Sell Prices for the first time officially. Basically a Costco-type place sued a high-end Purse manufacturer saying that they violated price fixing laws by cutting them off from reselling the purses.

After all the arguments the Court agreed with the manufacturer, basically agreeing that the manufacture can sometimes take steps in order to protect their brick and mortar dealers from over zealous competition.

So where will this end up? Well discounters are a smart bunch and this is why you see new promotions like "Gift Card Sales" or "Come in and Save" type promos.

While MAP means that it can be tough to get lower prices on top-flight gear, at least there is bio-diversity in what stores you can shop...

Dave Ramsey and the Snowball of Doom...

There are a lot of really good ways to begin to get your finances in order. From books, DVDs, website and blog there is really good (and also some Really bad) information out there.

So at the end of September when I looked around for a format that I thought could work for not only me, but my wife and kids as well, I weighed a lot of variables:

• Was is clear and consise? Lower amounts of wiggle room are best for me, because I "justify" my way back into old habits.
• Was there a way to involve everyone in the family? Didn't want to have to be the budget police. I always end up giving in.
• Was there a path post-getting out of Credit Card debt? OK I paid everything, I guess I could charge them up again...

Weighing all of these points and others I personally gravitated to the Dave Ramsey debt snowball.

For me these were the keys:

• The use of cash. Even using Debit cards we were spending too much. With cash when it is gone it is gone...like our Entertainment money right now!
• We could give areas for each of us to be in charge. She runs a lot of the cash envelopes; like for Groceries, Entertainment and Dining. She feels involved, cause she is! Those envelopes are 100% her call. If I want to buy Season One of The Office (which I do) I have to lobby her, just as the kids do for Harry Potter (HP won, damm Wizard!) Having real control over areas keeps people involved without one partner having to be the Budget Police
• Quick Wins. Although it is better financally to pay off debt in order of Interest Rates (as many blogs have pointed out) psycologically it felt nice to pay things off, real tangible change since you no longer have to pay the bill. This really helps me because I can lose focus and become disillusioned pretty quick

So how is it going?

I will give a full update at the end of the month, but so far we have paid off some smaller bills, stayed pretty much on budget (sometimes beating it) and kept everyone in the boat. Due to this our debt snowball is growing and we actually have a bill that we are actually paying more than the minimum on!

While I don't agree with everything Ramsey says, with a quarter of a year nearly under our belts, we are at least taking away from the pile instead of adding to it.

Can't wait to get our snowball to the size of a snowman. I think I will name it Dave...

Work Christmas Parties and the folks that love them too much...

Just got back from the Executive Christmas party (although i am not an Exec, I guess I am the closest thing in my group!). This is held at the CEO's house, which is unbelievable.

Copious amounts of really good wine as well as other beverages flow, but I now know (it only took 38 years) that this isn't intended as a Frat party :) it is a party at the CEO's really expensive, nice house.

That being said it never fails to amaze me that some still believe that this is a great time to get liquored up and let "the man" know what is REALLY up. Or the spouse who thinks that they need to "really let the Boss know how unfair the Boss is to the worker.

My advise: Treat holiday parties as if it was and office meeting with cocktails! The job you may save, may be your own!

Then again I paid $200 vs $2500...

When I was a small boy growing up I dreamed of traveling to exotic locations (anywhere seemed exotic compared to Omaha!), flying around the world, seeing all of the amazing sights that I read about.

Well, I have been lucky enough to get to travel as part of my job and in my previous job and a decent percentage of that was International Travel. This included Hong Kong, Paris, London, Barcelona, mainland China, and others...All of my friends,family, wife and kids would say, "You are sooo lucky, I wish my job would send me to 'X'."

Here is the a little known secret, known only to business travelers...Business travel sucks!

Here is what I saw on my first FOUR trips to Paris: The Airport, the train, a hotel room, a conference room at an office building, a train, and airplane...That's it! Never even saw the Eiffel Tower! Maybe if you are lucky you may get a good meal out of it. This is also balanced by no sleep, sometimes goofy local issues like when/where to tip, countries love/hate with American's, people calling you and needing to be available to them on their time zone which could be +/-8 hours from yours.

If Jesus was born this Christmas there is a good chance that the three wise men would be stuck in Chicago O'Hare.

This is really Ronald Reagan's fault :)

Reagan de-regulated the airlines which meant they could charge whatever they wanted for a flight. People were freaked out. Prices were going to go through the roof, little towns around American would be bypassed.

Didn't happen

Today you can fly cross country for $200, if you plan it out right. This is way cheaper than Greyhound used to be. In fact Southwest is the new-millennium Greyhound.

But how does this ties to Business Travel, oh King Whiner?

When the airlines were regulated and the prices really high, people only traveled by plane because it was imperative, or they were rich. (Not to mention people didn't try to blow-up planes with their shoe either) This meant every airline was judged and selected based on service, not price. If the cabins on Eastern sucked, people would take a flight on United for the same price with nicer cabins. Bad food??? I will never fly them again!!!

So at the end of the day I am tired and grouchy from being packed into a Buddy Holly Express flight with the guy from Deliverance drooling on me while the Stewardess...sorry Flight Safety Attendants, whine about giving me a peanut and thimble full of Sprite on a 4 hour flight.

Then again I paid $200 vs $2500 :)...

The Neighbor from Hell vs the Taxman......

OK, I am still really mad, and I know I should get over it...but...

In early October I received my Property Tax bill for the year. This is our first year in a house as an owner (I know, I know, rent down the drain). This is also a brand new sub-division, with bigger houses that had been typical for the area.

So when we got our mortgage we were prepared to have our property taxes paid as part of our monthly mortgage payment, but after talking with the broker it was clear the city had no idea what the area would be assesed at so the broker told us an expected average as well as a Worst and Best case scenario. We saved the average and hoped for the best.

I get my tax bill and it is lower than the average estimate by $800! wOOt! I run off and pay off another debt with the difference, building my debt snowball of doom.

About a week later I get roped into a new neighborhood dinner (I hate these things with a passion, but since I am in this house forever I make nice). During dinner, my newest noseiest neighborhood tells me this story:

Nosey Neighbor - "Hey I got my tax bill. How was yours?"
Me - "Better than I thought it was gonna be!"
NN - "Yeah, mine was too high, so I called the city to fight it"
Me - "Really?"
NN - "Yep, in fact I looked yours up online and since I know you paid a lot more for your house, I used that as an example of how high mine was..."
Me - "How do you know what I paid, I never told you"
NN- "Oh the contractor and I looked it up"
Me - "Huh?"
NN -"Oh, yeah it is all available online. I showed then and funny thing, they think mine was right..."
Me (waiting for other shoe to drop) - "...and?"
NN - "They think your's was low"
NN- "Yeah funny thing, he is going to review the whole neighborhood"
Me - "I already paid..."
NN - "Oh you are fine then..."

Sure enough two days later I get a supplemental bill for $1200!!! So $400 more than my "savings" and I already spent the delta. Luckily I have a $2000 Emergency fund (Thank goodness) so I could pay it especially since the city gave me NO extra days to pay.

So the guy didn't get his fixed and got mine raised!

No good deed goes unpunished!

I wife will never force me to go to another neighborhood meeting, so at least I got something out of it!

.25% Fed Move vs the Tortoise and the Hare...

So the Fed makes another rate move of a quarter point today. This apparently chapped everyone living in Manhattan 'cause stocks got beat up.

A little closer to home, I wonder how fast all of the savings rates will flip vs the rates on credit cards mortgages, etc.. I bet before I can zap my lunch in the microwave at work we'll see a couple major banks make a move regarding savings rates. Those same banks will probably make a move on lowering my credit card rate in 2108!

One of my goals for January is to contact all creditors and re-negotiate all of my rates. It is worth a shot and my FICO scores are climbing, so...

Surviving Christmas by Charles Dickens...

Basically two weeks until Christmas and the tension is palpable.

Living up to an impossible standard (Christmas Past) Kids with unreal expectations (Christmas Present), trying to stick with a budget (Saving Christmas Future). The ghost of Jacob Marley (Bob's Son) visiting and telling me not to be cheap while the chains made by CitiBank rattle on the floor.

Well this year we are trying something else. We saved $1200 in order to pay for Christmas. $200 for each person in the house, $200 more for presents for others. Given that this is the annual GNP of Ghana on one hand it really is a ton of money, but less than we have spent before (not budgeted, but spent :) ). I don't know about you, but pull the tinsel out of my eyes and I generally don't drop a grand+ on anything. But, every year get me all liquored up on egg-nog and off we go. Buying plastic crap in the shape of; Barbie and her Bio-Engineered Pets, Various remote controlled creatures and don't forget the latest (and outdated in January) electronic gizmo's of doom.

So this year we went cash only, ala Dave Ramsey and we have pretty much stuck to it, although we went over by $83 on the gifts for others as family portraits (along with the requisite new clothes) went a bit over.

And you know what...

There is still plenty for everyone.

Sure we had to plan a bit better. My wife fought the good Black Friday fight and got some Massive deals (Thanks Hustler Blog $$$ - Great tips). We tried to manage expectations for everyone, but in January there will be no panic...no, "Oh my Gosh, we spent $X!!!" No one died (except Marley...but that was awhile ago) and we go into the new year chipping awayat the debt instead of adding to the pile.

And it feels pretty darn good...

Found Money is the Best of All...

'Tis the Season I guess, but since Friday I have come across an extra $206!

First, I just recieved a gift card for $100 from work, normally most would be bummed at that for a Christmas bonus, but since I wasn't counting on it (my regular bonus is in Mar/April) I will take it smiling.

I addition in the mail I recieved two checks; one for $25 on a balance I had with my old doctor in SLC (we moved a year ago) and second an $81 refund on my State Taxes last year, since Oregon didn't use enough of the money and by law they can only keep so much overdraft (like that will ever happen again!).

So what will I do with my surprise funds? The gift card will allow me to get my wife something extra and the rest will go to debt snowball.

Every little bit helps!

In the Beginning...

So why another Blog; and what’s with the Title?

It is a chance to share my dreams, hopes and aspirations for a better time and place. One where once I am rich and can do nearly whatever I want. This will be a place for future generations, perhaps even our future Simian Masters, to come and gain the knowledge of someone who was privileged to grow up during the greatest generation known to mankind…the 1980’s.

Cure Cancer; done.
Pay my debts…YES!
Monkey Butler…of course

So now that that is out of the way, a few ground rules. You are a guest to my Blog (please wipe your feet) observe a few common courtesies and we’ll get along fine:

1. I am always right…Unless I am not

2. Racer X is the Best Metal Band of the 1980’s

3. Only discuss the following:

-What’s going on in my life (although, unless you are stalking me, I probably have a better feel for that one)

-Things that I have commented on in the Blog

-Personal Finance

-Anything else you want…especially Phoebe Cates in Fast Times at Ridgemont High

4. Racer X is the Best Metal Band of the 1980’s

I fully expect to have no readers. So, if you are someone other than me reading this…Thanks…and you might want to tab to another page, your boss is coming…