Tag Archives: Advice

How to Protect Your Home from a Burglary

I recently experienced a home burglary and through the incident I have learned a lot. Although worse things can happen, coming home to a house that has been broken into is a traumatic experience. Losing “stuff” hurts a little, but more so are the lost memories, like photos on a computer, and the lost sense of safety a home typically provides. Here are some lessons I have learned from the experience. While not exhaustive, following these tips will leave you be better prepared if your home is ever targeted. Feel free to add your tips in the comments section.

Minimizing the Risk

First off, when a home is burglarized, it is because burglars chose it over other homes for some reason. Finding ways to prevent your home from being targeted is a great place to start. Consider the following.

  • Put up signs showing you have a security system
  • Use random timers on lights when you are out of town
  • Have a garage – though not easy to change once you own a house, it’s important to understand that houses without a garage help burglars know when no one is home
  • Get a big dog that may scare away intruders (be smart – a dangerous dog that can potentially harm your family is not worth scaring off intruders)

Additionally, you can minimize the risk of harm by forcing intruders to get off the scene quickly. Here are some ideas.

  • Let trusted neighbors know when you’re not home and what cars you drive so they can keep an eye out for suspicious vehicles
  • Use an alarm system – be sure to register it with your local police precinct to prevent getting fined for false alarms
  • Install home web cams – there are a number of webcam systems that record when they detect motion or consider a fake one as a deterrant
  • Use locks on expensive equipment like TVs and computers to make stealing them more difficult
  • Use long screws into a solid frame on dead bolt locks to make it hard to kick in doors

By combining the ideas above, you will be even more safe (e.g. if your alarm is going off and a neighbor sees a suspicious car they are more likely to call the police and write down vehicle information than if there is no alarm or the neighbor thinks it is your car).

Protect Memories

Even though your home is now a less attractive target and burglars have limited time to steal stuff, you still may want to take further precautions to protect important items in your house that are harder to replace.

  • For computer files, consider an online data backup program like Mozy or Carbonite (~$50/yr). While potentially more expensive than an external hard drive, online backup is easy to set up and can’t be stolen by intruders.
  • Scan important papers and photos onto your computer too. This helps in the event of a burglary and other events like a tornado, flood, or fire.
  • Tag your pets. In case your dog or cat gets out through a door left open, make sure it has a collar with your phone number on it and a microchip that vets can use to identify your pet in an online database.

Protect Value

In addition to preserving memories, you definitely want to make sure you have taken the right steps for preserving value. Great insurance helped us quickly replace lost items.

  • Understand whether your home or renters insurance covers the purchased value or replacement value of your items.
  • Understand the deductible on your home in the case of a burglary. The deductible amount will reduce how much money insurance gives you but also reduces your annual premium.
  • Document expensive items in your home by taking pictures and savings receipts.
  • Save serial numbers to help the police identify stolen items and to prove ownership.
  • Download some tracking software to help find computers that have been stolen. Something as simple as free backup software like Dropbox will identify the IP address of a stolen computer when it is connected to the internet. You can find the internet provider of an IP address and the police can work with them to find the physical mailing address where a stolen computer is located.
  • In the event of a burglary, file a police report as soon as possible and let them know what has been stolen to the best of your knowledge. This will make the insurance process easier.

The more you do, the better your chances are at preventing a burglary or getting through one with minimal losses. You may never be perfectly protected, but it’s always helpful to be prepared.

(photo credit: Shutterstock)

Why and How to Buy Time

Outsourcing unnecessary tasks in your life is one strategy I believe will free you up to what you are designed to do best.  With that said, it can be hard to justify paying someone to do a task you could do pretty easily.  I’d like to present an idea on why paying for outsourced tasks is worthwhile.

Opportunity Cost and Time

Opportunity cost is a concept that generally urges someone to consider what opportunity they are giving up when doing something new. If the lost opportunity (a cost) is greater than the new opportunity (a gain), then the status quo should remain intact.

When evaluating what you are willing to pay for an outsourced task, you shouldn’t think about the difficulty of the task. Instead, you should consider what opportunity you are giving up when you do that task.

If you can be investing in skills or a hobby that could benefit you by adding a hundred dollars to your salary or giving you new income, then it may make sense to pay someone $10-$20 per hour of time saved. Even if that task is mowing your lawn and you are willing to do it yourself, the incremental value of that hour may justify finding someone else to cut the grass.

What to Outsource

When I discuss outsourcing, I’m not referring to shipping all your duties overseas (though that is a possibility). Most of the time these tasks can and will require you to invest in your local community. There are some tasks, though, that may best be served by someone around the world. Either way, you are creating jobs for others while improving your ability to contribute to and benefit from others.

Here are some simple examples tasks that anyone can outsource. Consider which ones may best help you and come up with your own that best fit your situation.

  • Home Cleaning – it may seem like something you’re supposed to do, but if that time is worth more to you then consider giving it up.
  • Lawn Care – people who live in apartments already outsource this. Consider giving it up if you don’t love getting outside every week to keep things green.
  • Personal Secretary – it’s not just for corporate managers anymore. Some people have found it worthwhile to outsource time consuming tasks like email to personal agents in India. Check out the 4-Hour Work Week blog for more crazy ideas.

Finally, don’t just weigh the amount of time a task takes you. There are always those tasks that provide us with a break from everything else in life or a chance to do something just for fun without worrying about money. Until you find the career that provides you with this enjoyment, don’t give these hobbies up.

Next week I’ll lay out some ways to use your free time as an investment in your future.  For now, I’m considering giving up home cleaning or lawn care to have more time to invest in my skills and revenue generating hobbies. What could you consider giving up?

Why and How to Buy Time is featured in the Festival of Frugality at My Personal Finance Journey.

Escape Financial Worries with Margin

One great solution that has helped to keep me from obsessing over my finances is the idea of margin. Surprisingly, I learned this at my church and my pastor used a great phrase to sum up the impact of margin. He said something to the extent of, “Relationships are made in the margin.” The idea at the time being all the great things we love about life – friends, hobbies, adventures, solving problems – are only possible when there is room for the unexpected.

What is Margin?

To some people, margin is the extra profit they make on a deal, but for now, think of margin as the extra room we leave ourselves for the unexpected. Here are some examples on how you can create margin financially.

  • Make sure your checking account has more money than you plan to spend each month.
  • Have a budget item called “margin” that goes towards unexpected causes.
  • Create an emergency fund (3-6 months expenses) in case you lose a job or have an emergency expense.
  • Don’t buy a big purchase on credit/debt.

How Does Margin Help?

No matter how you do it, leaving room for unexpected opportunities allows you to experience the best of life. Here are some examples on how financial margin can benefit you.

  • With a well funded checking account you no longer have to worry about over-drafting.
  • A “margin” line item in your budget frees you up for spontaneous activities like treating a friend who is in town or supporting a sudden crisis.
  • An emergency fund is like insurance for down times.
  • Avoiding debt gives you the ability to take on unexpected opportunities to invest in yourself or others.

How have you incorporated margin into your finances? Have you experience any unexpected opportunities that make you wish you had more margin?

(photo evilerin)

Avoid Scamming Auction Sites At All Costs

As the internet becomes a ubiquitous information tool around the world, we all benefit with the ability to find what we want and the way we want it.

The internet has also created many services that make it easier for companies to easily bring products to market at prices we like, but this low cost of entry and information overload also makes it easy for companies to find ways to scam us.  More specifically, a number of scamming auction sites have popped up with offers too good to be true.

How to Spot a Scam

If you are viewing a financial article or maybe researching your next big purchase, you may see an ad for something amazing like an iPad for $25 or a new car for $500.  Obviously the ad is trying to catch your attention and suck you in, but remember this first rule to not get caught.

Now, if you are just really curious and you want to see how someone could even consider offering the iPad for $25 and you click the ad, you will still see some scam indicators.  At the scam site memphisgazette.com (warning scam site), you will notice a few things that may seem odd.

First, all the buttons at the top are not actual links, the “Breaking News” is a saving trick (not something a little more breaking like a massive hurricane, a world war, or asteroid colliding with Earth), and my personal favorite, all the comments are extremely positive.  Any news site will have more negative comments than positive ones.

  • A fake news site may have fake links, overly positive comments, or a dramatized headline.
  • This does not give a product credibility.

But even if the news site is fake, it may be a legit ad. So you click a link and head over to swipebids.com.  This site along with some other scamming auction sites try real hard to take your money, but again, just resist it.

Why? First, depending on the links you clicked to get there, you may see some interesting reasons why they can offer these products at such a low price. For example, they may say a warehouse is overstocked and they don’t know what to do. Also, you will eventually find out that you have to sign up to really get anywhere and signing up requires a credit card. Since the site is a scam, they hide in fine print that you get charged $150 for signing up. Sure you can try and sue them for your money back, but that will take a lot of time and more money just to get them in trouble. Just say no.

  • There is no way to justify a $25 (or even $125) iPad unless it’s a scam.
  • Don’t give your credit card to a site if you are concerned it’s a scam.
  • Better yet, ask someone you trust if they have used the site or send me a question when you’re not sure.

How Scamming Auction Sites Work

Now, truth be told, the auction sites do have some deals on them and there’s a slight chance you get one. Understanding how they work, though, should convince you it’s not worth the effort.

For these “auctions”, each person buys a set of bids (e.g. 100 bids for $50) and places those bids on the product. Each time a set of 100 bids is placed, the winning price increases by a few cents, and after a set amount of time, the auction ends. So for a $25 iPad, there may have been 2000 bid sets placed.  Each one cost $50 for a total of $100,000. The winner (in a lucky scenario) put down $50 and then pays $25 for the ipad – a great deal, but everyone else lost out big.

What should this remind you of? This is very similar to the lottery or other forms of gambling. In this example, the average person pays $50 for a 1/2000 chance at winning a $500 iPad.  These are odds you should always avoid.

  • Avoid SwipeBids (scam!) and QuiBids (scam!) at all costs!

Have any experiences with scam auction sites? Let others know in the comments or check out these links for actual bad experiences.
http://www.sitejabber.com/reviews/www.swipebids.com
http://bloggerboon.com/2010/06/23/how-swipe-bids-scam-works/

This post is featured in the Carnival of Personal Finance at Budgeting in the Fun Stuff.

(photo from bloggerboon.com)

Hear Malcolm Gladwell and Steve Jobs for Free at TED

It’s always fun and beneficial to go to conferences where subject matter experts let you in on some of their secrets and how to advance in whatever you love doing. The downside of course is that conferences can cost hundreds of dollars and require days of your time. Although they still may be worth it, what if there was a place to go to get this content instantly and free?

Well, believe it or not, one website should be considered the YouTube channel of great speeches. This site, TED.com, offers hundreds of great speeches that cover everything from Money and Happiness to the Axis of Evil Middle East Comedy Tour.

TED.com Ideas Worth Spreading

TED started out as a conference aimed to spread ideas on technology, education, and design in 1984. They still hold annual conferences around the world, but the online site has given access to everyone for free. Additionally, all conference profits are dedicated to a TED Prize with the intention of seeking “goals of global impact.” For more information on TED and the why the group is trying to spread great ideas check out this page.

Best of TED

Advice is easy to find online, but it’s not always what you need to hear. Here are some talks, though, that may change the way you see life and the goals you choose to pursue.

Malcolm Gladwell – On Spaghetti Sauce

  • Gladwell is the well known author of The Tipping Point and Outliers. In this speech, he makes the case that there are no universal absolute desires (e.g. no universally perfect spaghetti sauce), but that each person seeks different things.  Companies and people should embrace this to appropriately find ways to make people happy.

Steve Jobs – How to Live Before You Die

  • Steve Jobs created a following of “Apple Fanboys” with his company’s iPod, iPhone, and Mac computers. This great speech at a Stanford graduation makes the argument that making the most of each opportunity, doing what we love, and counting our days is the best path to success. It also provides viewers an inside look at Steve’s life and what led him to making Apple what it is today.

Daniel Kahneman – The Riddle of Experience vs Memory

  • Kahneman is one of the best known researchers on behavioral economics. In this talk, he analyzes how people’s memories impact their happiness. Let me know what you think about his research on pain in surgery.

Jeff Bezos – Gifts vs Choices

  • Bezos created Amazon.com. In this address to a graduating class at Princeton, Jeff discusses how our lives are more based on the choices we make than on the talents we are born with.

What is your favorite? Have any speeches you want to recommend? Let everyone know in the comments.

A Personal Credit Score Designed for You

Many people rely on banks to tell them whether or not they deserve a loan to buy anything from a house to a TV. What people don’t realize is that credit scores are designed to tell banks how much money they can make off of someone.

From a bank’s perspective, credit scores tell the following.

  • Someone with a high credit score is a good guarantee of consistent profits
  • A medium score is potential for high profits through fees but with some risk
  • A low credit score is too risky to consider

We need a system for us to know when to get a loan or when to sign up for that credit card. A true Personal Credit Score will tell us (and not the banks) when a credit decision is best for us. I have started a score sheet below to help everyone out.  Let me know if you think this works for you or if something is missing.

Rules of Credit

My Personal Credit Score tool is based on some well known rules of money.

  • Managing money takes time and time is our most limited currency (not money or gold)
  • When you give money as charity, money loses its grip on your life
  • Spend less than you make (auto saving)
  • Don’t use a loan to buy something that depreciates
  • You earn the right to use a credit card
  • Credit makes it easier for people to spend beyond their means

Personal Credit Quiz

Now choose the answers below that best describes you and keep track of your points. At the end you’ll have a better idea of your true Personal Credit Score and when you should be using credit.

Do you consider managing money a fun hobby?

  • Yes, I love it and could spend hours each week! – 100 points
  • No, but I still spend a few hours monthly doing a budget – 60 points
  • No, I don’t look at bank statements ever or commonly miss bill payments – 0 points

How much money do you donate annually?

  • Greater than 10% of my salary – 100 points
  • Between 5-10% of my salary – 75 points
  • A little bit when something bad happens – 20 points
  • Sorry, I’ve got my own things to buy – 0 points

Do you spend less than you make?

  • Yes! I even have an emergency fund with 3-6 months expenses – 100 points
  • Yes. I have an automatic savings account – 60 points
  • Sometimes – 10 points
  • No, I’m living paycheck to paycheck or off my parents – 0 points

Do you currently have debts (including credit card bills not paid off monthly) ?

  • No, I don’t have any debt – 100 points
  • No, except for a house, student loans, or another appreciating asset – 50 points
  • Yes, I’m sorry but I just had to buy the car or TV via a loan/credit – 0 points

Do you have an income producing job?

  • Yes, it’s a full time job – 100 points
  • Yes, part of the time – 30 points
  • No, but I’m looking or volunteering – 5 points

Results

Great job! Now here are your results.

  • 500 – Congrats you financial all star! Feel free to use a credit card, but I’d be surprised if you really wanted one. Also, take some time to write a guest blog on Obsessed Analytic.
  • 420-499 – You’re financially sound. If you have the time, you’re allowed to get a rewards credit card, but keep looking for ways to improve.
  • 350-419 – Still hanging in there, but be careful you don’t lose track. Don’t get a credit card until your score improves.
  • 280-349 – Things are getting tense so make some time to get things in order. Don’t use any credit cards.
  • 150-279 – You’re good in some areas, but other areas can bring you down. Find the problems and do something. Obviously stay far away from any credit cards or loans.
  • 50-149 – Don’t panic. Just breathe. It could be worse, but time to sound the alarm. Start fixing one thing at a time and find someone to hold you accountable.
  • 0-49 – I’m not sure how you found this blog. Send me an email and I’ll help you get going, but this may take a while.

How’d you do? What is your first step to improving? Let me know, comment below, or tell a friend.

This post is featured on the Festival of Frugality: Time Passes Edition.

(photo credit frugallawstudent)

Financial Advice for College Freshmen

The Free Money Finance blog recently posted a user’s question on financial Advice for a College Freshman?  While there may be endless tips on the subject, here are four key areas I recommend focusing on.  I know a lot of my readers are out of college, so feel free to add to it in the comments below and I’ll pass them on.

Find a Co-op Job or Internship

Check with your school’s career development or career services office and see what type of help they provide for obtaining a internship or co-op job.  These types of jobs provide two great things.  First, they will provide money towards your college living expenses and savings.  Second, and more importantly, jobs provide work experience that will teach you valuable professional skills and set you apart as a job candidate when you graduate.  Even if the job adds a semester or two to your college life, you are simply extending a great time to develop friends and future connections and better preparing yourself for the future.

Build a Fund to Pay Off the Loan

Assuming you are able to get some type of job, start working on a savings account to pay off that loan.  I recommend an online bank like ING Direct or Ally that offers a decent interest rate and easy access to your account.  Set monthly goals based on your income and save before you spend.  Most college loans start charging interest after you graduate so no need to make payments until then, but if you have built up a savings account during college you will have some momentum into paying that loan off afterwards.  Remember, loans are a constant distraction to developing one’s positive financial future and paying off the loan as soon as possible will help you focus on more important financial questions later in life.

Get Involved

Outside of just accumulating cash to be well prepared for the future, you should invest in yourself and skills as well.  Your ability to succeed often corresponds to the amount of experience you have and the connections you have.  The best way to gain experience working as a team and driving initiatives is by getting involved in clubs in college.  Most colleges have a great variety of clubs to participate in so look for something you enjoy and practice being a leader and making things happen.

Work Hard

Every thing you want to accomplish in life will require some bit of effort.  A great work ethic is what drives you through those hard times when you start to forget why you are doing something.  College offers a great time to develop that work ethic whether it’s in class, in a club, or on the job.  Don’t be afraid to fail and practice developing the endurance that will pay off later in life.

(photo credit SBA73)

How to Maintain Your Own Lawn

I recently spent some time teaching myself on how to maintain my lawn well without paying big bucks for someone else to do it.  The situation arose after realizing that I love spending time in my yard and, because of that, would rather do it myself than pay someone else to do it.  This provides me with a hobby I enjoy along with some financial savings. Continue reading How to Maintain Your Own Lawn

The Best of Money Carnival #48: My Top 10

To all my readers new and old, it’s a pleasure to be hosting the Best of Money Carnival this week. This carnival is one of the most well known in the personal finance blogosphere and always features a great collection of personal finance articles. After perusing a long list of outstanding articles, I have picked my favorites. Thanks to all the entries and continue to enter for a chance to be featured.

My Top 10 and Thoughts

Starting with the best, here they are.

  1. The Winner! 11 Great 40 Dollar Investments – A great simple list of ways to spend 40 dollars well. A nice article without all the overwhelming information you see in other blogs.
  2. It’s Never Too Early to Teach Children Good Money Habits – Teaching your children about finance should be a top priority today (or when you have them).
  3. How To Get More Value Out of Your College Education – Too many people go to college because everyone else is going. Understanding why college is important and how to get the most out of it can set you far ahead of the crowd.
  4. What is a 529 College Savings Plan? – In line with the last two articles, be sure to save for your kids college one day. Here’s a good summary on how to get started and what to expect.
  5. Wipe Away Debt Problems With Debt Snowflakes – An interesting micro version on the popular “Snowball” theory Dave Ramsey followers know of.
  6. 5 Ways to Ask Your Boss for a Raise – Learning how to get the most money for your work make improve your balance sheet than any other savings advice.
  7. When Your Dual Income is Cut in Half – In a recession it’s important to know how to react when you lose a job. Here are some ideas to consider.
  8. Costs In Buying A Home Besides Your Mortgage – Buying a house comes with a lot of responsibility. Be prepared with this great checklist before committing.
  9. Living frugally for early retirement – We often overwhelm are lives with too much stuff. Here’s a fun perspective on a simple life in retirement.
  10. Avoiding Online Money Making Scams – A few good reminders on what to avoid when walking through the financial world online.

Be sure to check out all the posts. If you would like to take part in a similar carnival that’s just getting started take a look at the Find Time, Save Money, and Have Fun Carnival page.

How to Live Beyond Time and Money

This past week I took a short break from blogging to reflect on everything else in life. As wonderful of a hobby as blogging has been for me, I always like to take some time to reflect on my life and make sure I’m heading in a good direction. Although I enjoy looking at great ways to save time and money, the past week of reflection have helped me remember the important things in life. So if you’re ever stuck in a time when money or time or some other personal worry is overwhelming you, I hope you come back and think about these ideas on living beyond money.

Time is Limited and Money is only a Tool

I always like focusing on finding time and saving money because they are two things that are very useful.

  • Time is our greatest commodity and most limited resource. We all have the same amount per day and will make some decision on how we use it.
  • Money is the great medium of exchange. It allows people to serve others indirectly in a way that has helped millions.

But while useful, optimizing your time and money can be a distraction.

  • If you spend too much time worrying about your time, then you won’t have any time left to worry about.
  • It’s not worth it to save up millions while giving up great opportunities. Money is a tool that should be used wisely.

Take a Break and Serve Others

If you find yourself in a phase where all you worry about is time and money, then take a break to serve others. Sometimes thinking about money and time gets me so caught up on myself that I need a way to look outward. Here are some ways to impact others.

  • Buy some friends dinner. This helps build relationships and reminds you that treating your friends is a lot more fun than treating yourself.
  • Support a cause with Time. It’s easy to write a check to help someone, but take the next step and spend a day building a Habitat house, working at a homeless shelter, or aiding someone with a handicap. This will greatly impact your heart and remind you that you are blessed to have as much time as you have.
  • Reflect on your priorities.  Taking time to step back and think about what your priorities are versus what you are actually doing should help figure out what’s out of line.

Don’t Be Mastered by Time or Money

In the end, time and money shouldn’t control you. They are two things that if used well can make your life great or destroy it if used poorly. Whenever you realize that your life is being run by a constant need for more time or money, just step back and think about what you are really living for.

Thanks for your time. What are your thoughts about living beyond time and money? Leave a comment or send this to a friend.