Wednesday, April 30, 2008

Money Wasters, Part 2

Here are my top five money wasters.

5. Being a pack rat without being organized. This is a huge money waster because you have every thing you could ever need because you don't throw anything away, but you can't find it when you need it, so you go out and buy it again! Put your stuff in a place where you can find it when you need it otherwise, you keep buying the same stuff over and over without using the stuff you already have!

4. Buying brand new sports gear, especially for our little ones who are still growing. Mason is only four, yet he has name brand snow clothes, Wrangler jeans, hand crafted cowboy boots, and so much more. Not one piece was purchased new. I like to shop at thrift stores, so when I am in Truckee, I shop for winter wear. After all, the people who live in the colder climates have more of this kind of clothing. Their children can't wear this stuff out before they outgrow it, so I happily make the donation to the charity like Goodwill or Hospice, Mason gets great gear, and I get a deal with a tax deduction! While in Key West, FL, I found some great beach wear for pennies.

3. Convenience store and gas station snacks. This is one we all fall for at some point, usually on a road trip. A little planning goes a long way, I mean, how often are you on a road trip you didn't know you were going to be on? I suppose it could happen, but in reality, plan ahead. Pack a cooler with some drinks, reusable water bottles filled ahead of time and some snack food. Not only will you save your cash, but you'll also be able to eat a heck of a lot healthier.

2. Starbucks coffee and energy drinks. I bet you though this would be number one, didn't you? I'm going to be kind here, but let's do some math. If you spend $2.00 a day, five days a week, that's $10.00 a week and $520.00 a year! I bet this very minute you're not laughing, because you realize that you spend more than $2.00 each time you go to Starbucks or buy an energy drink. I don't drink the soda stuff, but it seems to me that Dave spends more like $2.89 per can of Rock Star and my girlfriends spend more like $4.00 per Starbucks coffee drink. At $4.00, that's $1040.00 per year if you're only going once a day. Just in case you're wondering, I make my coffee at home each morning.

1. In my opinion, the number one money waster is public storage services. Let's face it, the idea is that you need to store your stuff for a temporary amount of time, usually short term. It never works out that way, in fact, the average amount of time a family uses a rental storage facility is six-plus years. Think about this, if you're paying $100 per month (this is conservative) for a small unit, that's $1200 per year and $7200 for six years! Is the stuff you're storing really worth what you're paying each month to keep it? I suspect about 1% of you can answer yes, but most of us are storing cheap furniture, old records, sports equipment we don't use because we can't access it easily, and holiday decorations. In many cases this also goes back to #5, if you need something you have in storage but can't get there quickly, you'll likely go buy another one of whatever it is. As soon as I have the extra money, I'm investing in a rental storage facility!

Where are you wasting your money? Think about it, and if you can find just one place you can stop wasting, you'll be on the road to coming out ahead!

Monday, April 28, 2008

Top Money Wasters, Part 1

As we wind down the month of April and the topic of our finances, let's finish up with what I think are the biggest wastes of our hard earned cash. From number eleven to number one, here are the bottom five.

11. Paying more for electricity because you're not being diligent to turn lights and appliances off. We struggle with this in our house. Some of it's having little ones in the house who have no idea about what things cost, but Dave and I also get lazy leaving lights on in rooms we'll be "going right back in to." Of course, the next room we enter, we turn a light on and may or may not turn it off.

10. Washing clothes in hot and warm water. This one may surprise you, but think about it, hot and warm water was once believed to be the best way to get our clothes clean. Technology has come such a long way with energy efficient washers and dryers, our cleaning products are better than ever, and frankly, we're not really all that dirty to begin with. Use cold water unless you absolutely need warm or hot, and then do a smaller load. Ultimately, when you can, make the investment in a new washer and dryer and save money on your water bill, too!

9. Calling information to get a local phone number. This is something I've had to really be careful not to do. I get lazy and just want someone to give me what I need. I once had almost $20 in charges on one phone bill just from using the convenient 4-1-1 on my home phone. I then learned that on my cell phone, information is no longer part of my plan, I was informed by way of one of those little pamphlets that has print about 2 pt, and somewhere in all that teeny-tiny print it said information calls will now cost $3.75 each! Yes, each! Just one bill with those charges due and payable, and I've become a phone book toting mama! You can also use the Internet to get a number if you don't want to blow the dust off your old fashioned paper phone book.

8. Credit card late fees. This is a no brainer. $29-$35 added to your balance just for not getting a bill paid on time. In my opinion, there's no excuse, just make it happen. Open the bill when it comes, write the check or go online and pay what you have to pay to make it go away for another 30 days. Better yet, figure out how to pay it off so you can either pay it in full, on time, every month, or not use credit at all.

7. Trial memberships for credit protection and other silly products and services. These people make millions of your dollars every year for stuff you never get your money back on. Credit protection is one of those things some credit card companies add to your bill every month as part of your agreement to have their card. If they give you the option "free for 30 days and just cancel when your get your bill," even if you say no, you need to look closely, because I've had to fight tooth and nail to not only get the charges to stop, but to get my money back. Just say no and be sure to review your bills every month. Whatever their giving you to give it a try just ain't worth it!

6. Wasting money by "saving" when you buy something on sale. The only time this makes sense is when you were going out to make a specific purchase and that item is on sale. If you're out and see something you didn't think you needed until you saw it was on sale, you don't really need it. Don't fall prey, you're living without it just fine and spending $40 to save $12 is not really saving.

I'll do what I think are the top five money wasters on Wednesday. If you have one, post it in the comments, let's help each other save and grow our money so we'll have it when we need or simply want it.

Friday, April 25, 2008

Happy Friday!

Just a reminder that Intentional Winning in Life is about winning in all areas of your life. We're all trying to find balance and harmony, so each month we're talking about a different integral part of our lives. This month has been all about finances and money.

After reading the last two entries about credit scoring, can you see how there are multiple things to consider when utilizing credit while at the same time, considering how it'll affect your credit? It takes some time to get your brain around sometimes, and I find it helps to talk about it with someone else.

Last weekend you all had an assignment and I got a great response. So many of you set out to do something fun and free, and even some of you who had plans already found that something free came along. Mike went to a boat show (not his planned "free" activity) and while waiting to get in, someone gave him a free ticket! Way to go with the power of intention! I really just wanted to get you all thinking of ways you can have a great time without spending all your extra cash. Gas prices are way up, this is driving grocery costs up, and so it goes with everything. Cash is king and as long as you have something in reserves, you will have something to fall back on if need be.

Finally, send me an e-mail about your mom. Maybe the best advice she ever gave you, or a great story. I have special plans for May and our tribute to all moms! You can e-mail me at

Wednesday, April 23, 2008

The "If this, than thats" of Credit Scoring

This part of your credit score is the most difficult and the most important. We may spend today and Friday on this. If you have questions, post them and I'll answer here for everyone.

On Monday I gave you the rundown of the kinds of credit and the percentages by which information is weighed to calculate your credit score. Today we'll start in on how all this information changes and works together. Through all of this, remember that there are three different bureaus, using three different sets of your information, to calculate three different credit scores, and creditors then use your score for evaluating you for credit.

35% of your scores are how you handle credit, basically meaning do you pay your bills and how promptly. This is huge, so pay those bills on time every single month! No late pays or defaults will help you tremendously.

30% of your scores are based on how you use the credit that is available to you. Here's where this starts to get tricky, and in my opinion, unfair. If you use all your available credit without going over your limits, and you make every payment, more than the minimum, on time, your credit score will take a pretty hard hit and fall. The scoring model, though it's not human and doesn't judge, sees this high percentage of your available credit used, and it's a major red flag. The theory is that if you're using all your credit, you must not have cash, or that you're in some kind of financial crunch and if you suddenly lose some income, won't be able to pay those bills. Did I say the scoring model doesn't think?

The other factors are small, though still important. 15% is how long you've had credit available to you. If you are just establishing your credit history, there's not much you can do about this one, except, do it right from the start.

10% is the kinds of credit you use, and ideally, the unthinking scoring model likes to see variety. A credit card or two (revolving), an auto loan (installment), and a mortgage when the time comes. Again, go back to our 30% factor, when you buy that car, ideally, you want to finance the whole thing and then in three months, pay it half way off. Why? Because if you do that, you'll have a credit line of $20,000 with two or three months of good payment history and then when you pay half of it off, you're only using 50% of the available credit on that line. There's 65% of a good credit score! Not the same thing with a credit card. With revolving credit, you have a set spending limit right out of the gate, so you want to make sure that you don't use more than 30-50% of that at any given time, and pay it on time! With the auto example, if you put the $10,000 down when you bought it, you would only have $10,000 (the amount you actually financed) line limit and you would be at 100% of credit available to credit used. The percentage is slow to move down just making your monthly payments, so you can see why I would say finance the whole thing, and then pay it down in a chunk in just a couple of months.

The final 10% is inquiries into your credit record. If you're shopping for cars or filling out credit applications to get 15% off your purchases at department stores, this will start to affect your scores. Again, if your looking, the unthinking scoring model evaluates this as a yellow flag. In my experience, the number of inquiries is not as hard hitting to your score as it is a plus to have fewer.

Keep in mind, this all gets really convoluted as you try to decipher it. There are many ways to plan your finances and it may not make sense to actually exercise the plan for buying a car the way I proposed it above. I am only trying to show you how the decisions you make with how you utilize credit affect your credit score. Ultimately, credit is only really important when you need it. If you save cash every month, and have a strong reserve fund, you'll always have the money you need. Inevitably though, you'll need credit when you least expect it, and it'll likely be an urgent situation, so keep it healthy and it will be there for you when you need it.

Monday, April 21, 2008

Credit Scoring - What is it?

So, what happened this weekend? Did you find something you could do for free? Post a comment and let me know!

This week and maybe for the next two weeks, I'll explain the basics of credit scoring. Do you know what your credit score is? Do you care? If you don't, you might want to rethink that. Your credit score is a number assigned to your social security number as it pertains to how you have handled your personal credit. This is for credit cards which are considered revolving credit; you have a spending limit but can keep using it as you pay it down. Auto loans are installment credit; you have a set amount of money you borrowed and as you pay it down, you can't keep using the line of credit. Mortgage credit; this is obvious, your house payment for a first mortgage. This is technically installment credit but lenders look at it a little differently. Seconds are considered revolving credit in most cases as they're often equity lines. This's important and I'll explain that later.

With the three kinds of credit, there's three credit bureaus. Experian, Equifax, and Transunion. You have three credit scores and the one that is used is the middle number. If your three scores are 684, 710, and 690, your credit score would 690. Typically, mortgage companies and auto loans are reported to all three bureaus. Credit cards don't necessarily report to all three, so it's possible to get a report from Equifax that shows a lower score than the report from Transunion because a credit card you were late or defaulted on didn't report to Transunion.

Currently, credit scores range in number from 350-850. I've never seen a score below 480, and the highest score I know of is 813. What criteria makes up your credit score? Here's how it breaks out:

35%: Past payment history (paid on time/late, defaults, etc)
30%: Outstanding dept utilization (how much of your credit available to you is used)
15%: History of credit establishment (how long have you had credit available to you
10%: Type of credit being used (revolving, installment, mortgage)
10%: Number of inquiries (how many times in a year someone checks your credit)

So there are the basics. I'll go into how this convoluted system works on Wednesday. There's so many "if this, than that" when it comes to a credit score. If you have a question, feel free to ask and let's see if we can understand this before the system changes! Laughing.

Friday, April 18, 2008

Weekend Assignment

Happy Friday! Hopefully you have pulled out the bank statements, credit card bills, and your check register to see where you stand. If not, get at it!

This weekend, I want you to find something really fun to do that's free. You can spend money on gas to get there, but nothing else! You have to pack your food to eat, from your house (no trips to the grocery just for this trip), no admission fees, and no paying for activities once you're there.

See what you can come up with and next week we'll see who had the most fun and what you did. We're also talking about credit scores and how they're calculated, so hopefully you'll get some useful information! I can't wait to hear about all the free stuff you found to do!

Wednesday, April 16, 2008

The Check's in the Mail!

Did you get through April 15 unscathed? I say that pretty tongue-in-cheek in that, most of us are either well prepared to file on time, or are not losing sleep over an extension.

I am wondering now if our much anticipated tax rebate checks are on the printing presses. I keep hearing on the news how Wal-Mart, K-Mart, and Target have already put together sales promotions to "give" you something if you come to their store to cash your check. What will you do with yours? Dave and I had planned to finish paying off the debt we have with our refunds, but it has turned out that we are spending that money on our patent. I can't help but think it's an investment in our future.

So another tax year is gone, and the new one is well under way. Make 2008 the year that you really get a handle on your finances. All it takes it that initiative to really confront where you are (and how you got there), where you want to be, and what steps you need to take to get you started! You can do it!

Monday, April 14, 2008

Tax Day is Tomorrow!

Have you done your taxes? I have ours ready to go in January every year. I know we are getting a refund and with that, I don't drag my feet. Not to mention, our taxes are not that complex.

Some would say, if we get a refund every year, than we are not withholding or filing properly. Letting the government hang on to your hard earned cash is not the smartest program. In reality, though I could be making a few percent in interest, would I? I am much better and managing our money, but the temptation to spend still lurks. As it works out for us, what we get back in a refund is usually what we owe in property taxes. So from the IRS to Placer County, with a brief stop in at Bay Media Federal Credit Union!

As part of the confronting your finances exercises, make sure to do something on time. Either file your return or at least, get the extension filed on time. Confront it and take action, that' show stuff gets done!

Friday, April 11, 2008

So, How is Your Financial Health?

This is one of those two-meaning questions. If money worries can affect your physical health, it would make sense to get healthy with your checkbook so your body can relax, too.

Exercising financially doesn't mean go shopping! Quite the opposite, in fact, it means connecting with your current financial situation and taking action. Did you do any confronting since my last post? I did. I brought my check register current and took a good look at our finances. They are okay, but I am still not saving like I would like to. In any case, I paid all our bills, including the second installment of our property taxes. Now I'm going to work on my heart health and go for a hike with Riley.

Tax day is fast approaching so if you haven't already, take a good look at your financial situation. If have a refund coming, get smart, pay a bill off and see how good it feels to improve your bottom line. Once you do that, engage is some free activity, take your kids to the park, take a walk with a friend, ride your bike, or pull some weeds in your garden. A tall glass of iced tea, a little sunshine, and a chat with a good friend will make you forget all about that shopping spree you didn't take! Have a great weekend.

Wednesday, April 9, 2008

The Physical and Your Finances

Do you believe your financial situation can affect your physical health? The answer is a resounding "Yes, it can!"

Financial worries tend to be chronic worries, not the fleeting, short-term stress our bodies are designed to handle. If you are losing sleep and unable to concentrate because you don't know where the money is coming from to pay your mortgage, you are certainly developing health issues you may not even be aware of.

The good news is, there are things you can do. First and foremost, confront the whole subject. It's hard to look at a part of your life that is painful, or you feel you don't have control over. In reality, you do have control. Next, do the math; calculate how much money is coming in and how much you need to meet your basic needs. Remember needs and wants are different. Once you know how much you absolutely need, contact those people you may owe money to, or that you can't pay on time and make arrangements with them. Finally, in this simple plan, look for ways to generate more income. It can be by taking a second job, or even selling things you have that you don't use as often as you once did.

Hands down, the most powerful part of this whole process is to confront the situation, and take responsibility. As soon as you do that, the energy will be refreshed and things will happen to assist you that you never could have predicted!

Monday, April 7, 2008

Honesty and Money

One of the best ways I find to keep my ethics in with money is to be honest. Suze Orman talks about this and it's a superb way to get it right!

Next time you want to buy that great pair of shoes, or newest video gaming system, ask yourself if you honestly need it and if you can afford it. Here's the good part, be honest in your answers to yourself and follow through.

Depending where you are on your financial journey, you don't have to need something to buy it. For most of us, we have indulged ourselves into deep credit card debt and would very much like to get out from under that burden. So if you need to use a credit card, then you can't afford it. Only you can determine the need part, but I've yet to meet someone who genuinely needs a new video gaming system! Laughing! (Yes, honey, I hear you. No, we don't need a PS3)

As Dave and I evolve as a couple, we've made some really great progress with our finances. For us, this is where work in marriage comes in. We do a really good job, and then some of those old habits creep back in. At that point, we'll catch ourselves and get back on track.

Being honest isn't always easy, with money or other areas of life. But when you get honest, things ultimately get good. It may not appear that way at first because it may be uncomfortable and even painful. The god part comes when you now have a strong, solid foundation to make your next few decisions from...honesty is the best foundation to build any future anything on!

Friday, April 4, 2008

Be Willing to Change

So did you look at how you feel about money? Do you like how you feel? If so, great! If not, be willing to change. How do you want your relationship with money to be?

Think about this; being willing is different than wanting. We're often willing to do things that we don't necessarily want to do. Pregnant women don't want to bear the pain of childbirth, though they are willing to go through it to have a family. There is power in saying yes. As we get older and bogged down with so many commitments, we find power in saying "no," when in reality, the real power comes when you're willing to say "yes!" There are so many aspects to this idea. When you take responsibility, you have control. When you say yes, you take responsibility. Saying yes wakes you up in your life. When you say yes, there is suddenly something to do. When you're doing, things are happening, moving, progressing. Can you see how this relates to money and your finances? Say yes to a budget, say yes to a project that will bring you some extra money, say yes to balancing your willing. I didn't say you wanted to!

I think this can be a relatively simple thing to do, but you all know me, "whatever you think, you're right!" If you believe you can choose how you feel, you can be willing when you don't want to, and you can create the kind of energy you want to live, you can.

Wednesday, April 2, 2008

April Showers Bring Financial Matters

Welcome to April 2008! At this point in the year, we have worked on getting healthy, creating happy relationships, and being lucky. Now it's time to get our money house in order. Are you ready?

Before we go any further, let me ask you this; how do you feel about money? Is it good or bad? Is there ever enough or do you have plenty? These are important questions to ask yourself and try to find honest answers. I had to go back to being a little girl to find my true beliefs about money. It was classic, my mom would often say, "Money doesn't grow on trees." Or, "What do you think, we are made of money?" Even though we weren't poor, the energy in my house growing up was, we don't have enough money.

I grew up with that belief and as an adult, I had to make the choice to believe something different. My new belief (not so much new anymore) is there is always enough for what we need and more. As I changed the belief system I inherited from my mom, my financial life changed, too. Check me out! I am holding a whopping 2.5 million... Vietnamese dong! Laughing! I had to take it out of an ATM in Hoi An. I never in my wildest dreams imagined I could withdraw 2.5 million anything! Okay, it's only $156.00 in American money, but it was sure cool punching in all those zeros.

Money is energy. It has a vibration just like we as people do. What is your vibration? Is your energy one of abundance and affluence? Or is it an energy of fear and lack? Whatever it is that makes up your energy as a being, is what you will attract in the energy of money. So, with that, how do you feel about money?