Did you know? Premier Edition

Did you know switching one incandescent light bulb to a compact fluorescent can cut around $30 off your annual electric bill? Think about how much money you could save by switching all of your light bulbs. Most of us would be looking at a savings of several hundred dollars a year. Fluorescent bulbs cost slightly more, but they use 2/3 less energy, and can last up to 10 times longer.

Did you know the earlier you purchase a life insurance plan, the cheaper it is? Also, you qualify for more plans when you're younger, because you don't have all the health problems that come with getting older. If you're married, life insurance is a must. Don't wait until it's too late.

Did you know if you work from home you may be able to deduct the expense off your taxes? There are certain requirements that you must meet to take a home office deduction each year, but if you meet these requirements it's certainly worth it. Want to know if your home office qualifies? See for yourself here.

Be thankful for what you have

The best food is free food, and last night I had the privilege of eating at my parents. We had beans, cornbread, fried potatoes, fried squash, and corn. That's some good eating. Better than anything you can get at Cracker Barrel, O'Charley's, or any other restaurant. And the conversation is just as good as the eating, that's why I love visiting my parents.

My mom told a sad story last night, and it's one I think we can learn from. My mom cleans houses for a living, and one of her best clients had called to let her go. She called crying, and told my mom they just didn't have any money left. Her husband had been president of UPS for several years and had become a multi-millionaire, but when the economy tanked the money dwindled. They've been trying to sell their houses, but they've had no luck, and the money has run out. They are now at the point of losing everything they have.

I went to their house several years ago because my mom had talked so highly about it. It had a personal theater, an indoor pool, and my favorite, a room filled with autographed sports memeribelia. I was amazed at this house and thought to myself how lucky these people were. They traveled all the time, they had nice cars, they had even bought houses for their kids. And now, they are on the verge of losing everything.

Often we look with envy at what others have. We think if I just had what they had, I'd have it made. But rarely do we consider the cost. Our friend buys a new car and we think, must be nice. We don't think about the payment that comes with it.

Instead of thinking about what we don't have, why not be thankful for what we do have. Because chances are, we have a lot more than we think.

Building Your Emergency Fund

Having an emergency fund is essential to becoming debt free. An emergency fund protects you from those unexpected expenses that seem to pop up from time to time. With an emergency fund, when your car breaks down, you don't have to turn to your credit cards or take out a loan to pay for the expense. This means you keep yourself out of debt.

Most people like the idea of an emergency fund, but can't find the extra money to fund one. First, you need to start with a spending plan. Track your spending each month. Save every receipt and write down every cash purchase. Review what you're spending your money on, and see if there's areas where you can cut back. Here are a few ideas to get your started.

1. Cut out the extras - These are small expenses that add up over time. The most common example is coffee. Instead of giving your money to Starbucks, make your own cup of coffee at home. Drink water with your meal, instead of cokes. Bring your lunch to work with you instead of eating fast food.

2. Buy generic - Buy the store brand of paper towels, cleaners, cereal, and any thing that will save you money. Walmart has revamped their generics to make them look, um, not generic. I love the new branding, and I love saving money.

3. Get thrifty - If you just can't stop shopping, change the places you go. Instead of going to the mall, go to thrift shops to search for deals. It's like a treasure hunt, you never know what you might find. I found my Halloween costume at Goodwill just last weekend.

4. News for free - If you're one of those people still paying for a daily paper, get with the program. You can get all the news you'd ever want online for free. Besides too much news can make you depressed.

5. Home entertainment - Instead of going out for dinner and a movie, why not save yourself $50 and stay at home. You can make dinner together, rent a movie from Redbox, and pop your own popcorn. If you're not the movie type, why not have a game night. When's the last time you played Monopoly?

6. Down-Size your services - Do you really need 800 channels, include 12 HBO's, 9 Starz, and 6 Showtimes? They show the same movies over and over again. Why not cut back to the basic package for a few months. Or do you really need all those cell phone minutes? Could you get by with a smaller plan? What about cutting out text messaging? Do without texting, that's impossible.

7. Save your change - Empty your pockets or purse each night and put away your coins in a piggy bank. At the end of the month open the piggy bank and count your winnings. You'd be surprised at how much money you've saved.

8. Have a "no spend" month - This is my favorite tip of all. Simply buy nothing, other than what you need, for a month. How much money would you save if you did that?

Keep in mind, these don't have to be permanent decisions. You're just cutting back until you've built your emergency fund. Of course once you've started saving money, it may be hard to stop.

Avoid Overdraft Fees

Did you know that the median overdraft fee on a checking account is $26? Here are three quick tips on how to avoid those pesky fees.

1. Don't trust your "Available Balance" - This could be a part of one of my Wednesday rants. Never trust your available balance. I'm talking about the balance the ATM gives you whenever you're taking money out, or depositing money in to your account. It's always higher than what you actually have. I think mine is usually about $500 higher. Apparently this is the amount they'll cover for you, but don't think they'll do that for free. It comes with a hefty cost.

2. Balance your checkbook - This is by far the best way to know exactly how much money you have in the bank. It will help you avoid overdraft fees, and you'll be able to catch any errors the bank may have made. You have to be very diligent about making sure every transaction is put in the checkbook, otherwise you're wasting your time. Invest a couple hours a week to keeping the checkbook up to date, it'll be well worth it.

3. Create an artificial buffer - Decide on a certain amount that you'll always keep in your account, and don't dip into it. It may be $100, $500, or $1,000, the amount just needs to be enough to keep you safe in case you accidentally go over. You may even want to go ahead and subtract the amount out of your checkbook, that way the balance you see is what you can spend. Having a buffer is a huge stress reliever. You never have to worry about bouncing a check when you have a large buffer in place.

Carnivals I Participated In This Week

Carnival of Twenty Something Finances: I was included for my article Christmas, It'll be here sooner than you think.

Carnival of Money Stories: I was included for my article Have a plan.

Wednesday Rant - Credit Card Rewards

I'm 28 years old, and I've never had a credit card. To be honest, I've never even had the urge to get one. Why would I want to risk paying those outrageous interest rates and late fees. That is, until recently. It seems like more and more people are using credit cards for their rewards benefits than ever before. And it's tempting to join the crowd.

You can customize your credit card with your own picture. You can pick your own rewards. You can get 0% interest for 6-12 months. I mean, it sounds great. And that's the thing, you remember that saying it's too good to be true. There's a reason these companies are offering you whatever you want. They know if they can get their card in your hands, there's a good chance you're going to end up giving them a lot more than they ever give you.

Why do you think every store you go into now offers you a discount if you sign up for their credit card? If it didn't work in taking more of your money, they wouldn't be doing it. Yes, that 30% discount is tempting, but why not just wait till they have a sale. Or just buy 30% less stuff. Chances are you didn't need all of it anyways.

I know there are those who are going to disagree and say you just have to be responsible with them. Isn't part of being responsible, not having to borrow from someone else. And isn't part of being responsible, being an example to those around us. Do I think I can beat the credit card game? Sure I do. But why would I even want to play with them?

Mypoints

I'm always looking for ways to earn a little extra cash or get something for free. One of the ways I do this is through a website called Mypoints. Mypoints gives you points for visiting websites, taking surveys, printing coupons, and buying stuff. You can then use the points you've earned to redeem for gift cards. They have the largest variety of gift cards I've ever seen. There's a lot of other sites that do something similar to this, but I believe Mypoints is by far the best. I've been a member for about 18 months now, and have redeemed for several gift cards already. Right now, I'm about 400 points away from redeeming for another $25 gift card, that will hopefully be here by Christmas.

By far the easiest way to earn points is just by viewing the emails they send you, and then clicking on the websites they're advertising. Most of the time you get 5 points per website viewed. In my experience I get at least 5 emails a day, which then turns into 25 points. $10 gift cards start around the 1400 point mark. This means just by clicking on their emails, you should be able to redeem for a $10 gift card every 2-3 months. Not too shabby, right? Starbucks taste better when you have a gift card to pay for it.

So, if you're interested in getting gift cards for doing very little work. Make sure to sign up for Mypoints. Have a happy Friday everyone.

Wednesday Rant - Politics

Does anyone really want to be the president anymore? I generally stay away from the political discussions, but I couldn't think of any thing else to rant about today. Unless you've been living in a cave over the past week I'm sure you've heard complaints and outrage over the president speaking to the nation's school kids. Many people see it as a way for Obama to brainwash our kids into socialism. From reading his speech it just looks like he wants kids to work hard and stay in school. People have compared Obama to Hitler because of his health care plan. I mean Hitler, who killed 8 million Jews.

When did all of this start, and will it ever end? I don't care if you're democrat, republican, or none of the above, you have to admit our government is messed up. Do they ever do anything besides yell at each other anymore? I'm convinced that if one side discovered the cure for cancer, the other side would find a way to shoot it down. No one works for the common good anymore, you're either for us or against us. I'm convinced that it's become impossible for an honest man to succeed in politics.

20 years ago, I would've been excited about hearing the president in a classroom. In fact I'm pretty sure the original George Bush did speak to kids in 1991. Not that I remember it now. Apparently, he's not a very good brainwasher. Hold on a second, his son did manage to get elected, now we know how. But seriously, the media has turned politics into one loud yelling match. The louder they yell, the more it sells. We need to stop buying it. That's the only way we're ever going to see things truly change.

Christmas, it'll be here sooner than you think

It's hard to believe, but Christmas is just around the corner. Hopefully, you've been saving a little each month and by now you have a pretty nice Christmas budget. I've budgeted $50 each month to go to Christmas savings, so by December I'll have $600 saved. If you haven't started saving for Christmas yet, it's not too late to start. Here's some simple steps to take to help you get prepared.

1. Determine your Christmas budget. We looked at what we spent last year and added a little to it. This doesn't mean we are obligated to spend the full amount. If anything we want to spend less than last year. You should look at your financial situation and budget appropriately. Do not, I repeat do not, go into debt or use credit cards to finance your Christmas shopping. That's a good way to get on Santa's naughty list.

2. Make a list of all the people you'll by buying for. When I first got married I was shocked by just how many people we actually bought for. We were buying for family members I had never even met before. Luckily, the list has gotten shorter over the years as my wife and my family have decided to just draw names. Take a look at your list of names when you get finished, and see if there's anyone on there that you don't need to buy for anymore. Often we end up buying out of obligation rather than pleasure.

3. Break your budget down into specific amounts for each person and write that number beside their name. For example, you can plan to spend $50 on mom and dad, but only $10 on granny. Don't be surprised if what you plan to spend on each person adds up to more than what you've budgeted. This is where you go back through the list and either cut some more names, or cut some spending. You may find you can only afford to buy a $25 gift for mom and dad. This is perfectly fine. Christmas isn't about gifts in the first place.

4. Take your Christmas budget and divide by the number of months left before Christmas. If you're just starting out you only have 4 months left to save, that is if you're counting December. This means if you have a $200 Christmas budget, you'll need to save $50 a month for the next 4 months. If you have a $400 budget, you'll need to save $100 a month. This is why it's so important to start saving early.

Hopefully this will help some of you out. And just remember you don't have to spend a thing to enjoy Christmas. I consider giving gifts to be a blessing. Don't let it be a burden to you.

Wednesday Rant - This Weather

Hello, and welcome to the 2nd installment of the Wednesday rant. I'm not sure about the rest of the country, but Tennessee has been experiencing some very mild temperatures for this time of year. Temperatures have stayed in the high 70's to the lower 80's with mostly sunny skies, and people are loving it. Most people, not me. Let me explain.

These perfect days make me extremely lazy. Every time I go outside now, I just want to lay down in the grass and take a nap. When I'm not outside, I'm looking out the window wanting to be outside. Trips to the mailbox take me twice as long as they used to. Everything I do, I do slower because of the weather.

The other problem I'm having is a major one. And it's something I had forgotten about over the summer. The colder it is outside in the mornings, the less I want to get up. There is a direct correlation between the temperature outside, and how long it takes me to get up. For example, when it's in the 70's, it takes me less than a minute to get out of bed. Now that it's in the 50's each morning, it's taking me close to 5 minutes to get up. My wife even made me get out of bed first this morning, so I could turn off the fan. Can you imagine how long it will take me this winter, when the temperatures are in the 30's or even lower. I'm gonna have to set my alarm for 30 minutes earlier, just to make sure I make it to work on time.

Tell me I'm not the only one who feels this way. How are you handling the changes in the weather?

Make Sure It's God's Plan

In my last post I talked about the importance of having a plan. I left out one very key component. Unless God is behind the plan, it won't succeed.

Proverbs 16:1 "We can make our own plans, but the Lord gives the right answer."

Proverbs 16:3 "Commit your actions to the Lord, and your plans will succeed."

Proverbs 16:9 "We can make our plans, but the Lord determines our steps."

Proverbs 19:21 "You can make many plans, but the Lord’s purpose will prevail."

The most important part of having a plan, is making sure it's God's plan. When our plans fail, it's often because God wasn't behind it. My wife and I want her to stay home with the kids. We believe it's what God would want us to do, so we're making preparations for that to happen. Successful planning requires two parts, God's blessing and our preparation. It takes both. Maybe God is leading you to be a stay at home mom, but you don't think there's anyway you can do that. Start making preparations for it to happen, and see if God will take care of the rest.

Joshua 3:13 "The priests will carry the Ark of the Lord, the Lord of all the earth. As soon as their feet touch the water, the flow of water will be cut off upstream, and the river will stand up like a wall."

This is the second instance of God parting the waters. Many of us know the story about God using Moses to part the Red Sea. This verse is referring to God parting the Jordan River so the children of Israel can go across into Jericho. What I want you to notice is God didn't part the water until they stepped into the river. Sometimes, God wants us to take a step of faith before He will step in. So, if God has put a desire in your heart, start preparing for that desire to become a reality.

Many times we look at our situation and think something is impossible, so we never try. With God all things are possible. That does not mean God is going to give you all your desires immediately. It may take a long time. We may have to deal with the consequences of our past actions before God can give us our desires. That means if we've gotten ourselves into a bunch of debt, we shouldn't expect God to help us win the lottery. We have to deal with that debt first. But, if we're willing to take the first step, God will step in, and help us the rest of the way.