Tag Archives: Saving

Activity CLUB

Ways to Have Fun on a Budget: Kubb

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With football season starting back up strong, tailgating games are back in fashion.  Some of the more popular games including Corn Hole and Ladder Ball offer a simple setup and team competition, but often lack a touch of strategy that makes another game great.  A Swedish game called Kubb is set to spread like wildfire among the lawn game crowd.

What is Kubb

Kubb is an easy to learn, yet challenging yard game for people of all ages.  Anywhere from two to twelve players can play at once making it great for any occasion.  The game is based on a simple concept of knocking over blocks with batons, but provides much excitement as the game develops to the eventual take down of the king block.

In general, this is how Kubb is played.

  1. Each team sets up 5 blocks on a goal line and a king block is placed in the middle of the field – let’s call it the 50-yd line.
  2. Teams alternate tossing 6 batons at the opposing blocks with the objective being to knock over all blocks on the opposing goal line and then the king block (think 8-ball).  If the king block is knocked over in any way before the right time, that team loses.
  3. The extra element of the game is that after each baton toss, the opposing team picks up any knocked over blocks and must toss them from their line of scrimmage to the other half of the field and attack these blocks before going after the opposing goal line.
  4. Always toss batons and knocked over blocks from the standing block closest to the 50-yd line.  Usually this is just your goal line but if the other team messes up, this could be further up field.

If you’re a little confused check out the official World Championship Kubb Rule Book. I have yet to find a person who has tried Kubb and not loved it, so find a way to try today.

Where to Get Kubb

The great thing about Kubb is that you can make it yourself in 15 minutes. Based on the advice of a good friend, I recommend going up to your local home improvement store (e.g. Home Depot) to purchase the following.  Most stores will provide the cuts for free or at a low cost.

  • An 8 foot 4×4 fence post with some type of styled top.  Cut 10 blocks that are 8in in length starting at the bottom.  This will leave you with a 16in piece with the styled top which can be the king block.
  • 2 round dowels (wooden poles) each a yard in length. Cut the 2 dowels into 1 foot batons so that you have 6 batons. I recommend using 1.25in diameter oak wood dowels to keep these as heavy as possible so they can knock over the blocks.
  • You can also consider purchasing 4 stakes to mark the boundaries of your field.

Altogether, this should cost $20-25.  Alternatively, you can purchase Kubb online for $60-80.

Activity C.L.U.B. Ratings

Community
10 – With room for 12, this game allows any group to enjoy a nice day outside.
Low Cost
8 – Although the game can get unreasonably expensive when buying online, ten minutes in a home improvement store makes the cost of this game a great deal.
Underrated
9 – It’s one of those games you have to see to believe so most people are skeptical before trying. Everyone ends up loving the game, so I won’t be surprised to see this on ESPN2 before long.
Beneficial
7 – Throwing sticks may not be the most physically challenging sport but at least it gets you outside.

For more great lawn games, check out the Wikipedia Lawn Games page.

(photo Johan Larsson)
Life, Money

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.

Featured, Life, Money

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)
Featured, Life, Money

A Personal Credit Score Designed for You

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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)
Featured, Life, Money

What to Know About the US National Debt

A reader asked recently, “What is national debt? It seems both complex and simple. How will it affect the future?”

Indeed, the US national debt is a complicated issue and this is evident in how the nations top economists continue to debate the significance of our debt and its impact on the nation.  As the US national debt continues to swell, many people are seeking to understand the issue better.  Here are some basic principles and strategies that should set your foundation for understanding the subject.

Types of US Debt

The US national debt can be looked at in two main ways.
First is the “public debt.”

  • Public debt can be viewed as the actual amount of money the US owes through loans to individuals, groups, and governments.
  • This is what the government pays interest on right now.

The second type is “gross debt.”

  • Gross debt includes future obligations like Social Security.
  • Although future obligations may be covered by future taxes, current tax rates will not bring in enough revenue to cover them.

Today’s public and gross debt levels relative to the size of the US economy (GDP) are higher than they have been since WWII.  This has happened since the Iraq invasion around 2003 and can be largely attributed to the post 9/11 economy and recent “Great Recession.”  Entitlement spending (Social Security, Welfare, Medicare) has also had a significant impact on the rising gross debt as population growth has slowed and the ratio of people on entitlement programs to those paying for it has increased.

How the US Debt Will Impact Us

As obligations increase, the US government must continue to raise interest rates so that investors are willing to loan the US money.  Alternatively, taxes must increase across the board.  Either scenario can be harmful to the economy and thus limiting job opportunities and people’s ability to spend effectively.  This creates a few potential problems.

  1. As the US government increases interest rates to raise more money, investors may move money out of corporations leading to more government power and inflation.
  2. As interest obligations to debt holders increase, taxes are no longer used to improve the country but instead go to other nations.
  3. If a decrease in infrastructure programs happens before a decrease in entitlement spending then taxes become less and less an investment in economic growth and more of a temporary solution to support those in need.
  4. American companies are considered more risky as the US debt increases causing prices to rise which creates inflation.

What You Can Do

As time passes, the US will either have to cut programs or increase taxes to pay for the problems.  Simply increasing debt is not exclusive of these options since it will increase interest payments which decreases the amount of money going to programs.  Even if the government never goes bankrupt, its power on the international scale will diminish slowly over time making living in the US less of an advantage.  Here are some strategies you can consider to be prepared.

  1. Be thankful that you live in a great economy that provides you with many more advantages than other places.  How many people honestly are completely independent from everything else?  Even if our country one day fails us, we’ve been very blessed until now.  You have to appreciate the benefits along with the losses.
  2. Get financially sound in case you’re required to live on less.  Practice the basics like saving for an emergency, spending less than you make, and investing in yourself.  For more frequent advice, read some good financial blogs like MoneyCrashers.com or ChristianPF.com
  3. Vote for politicians whom you believe will best spend your taxes for the good of the country.  Tell your friends to vote for them too.
  4. Lose your dependence on money by giving some away and seeing it as a tool for other things.  When possible, find ways to enjoy life and make a difference without needing lots of money.
  5. Look outside.  Even when the stock market drops the sky is still blue (or gray but I don’t think there’s any relationship there).

Have your own question to submit?  Submit your time, money, or fun question here and get it posted on the Obsessed Analytic blog.  If you have any thoughts to add, then share with others in the comments below.

This post is featured in the Carnival of Personal Finance Edition #270.

Featured, Money

Should I Worry About The Expiring Bush Tax Cuts

It’s always funny to watch people get jumpy over a fifty-cent coupon on their next pizza purchase and then not worry about the fact that their largest expenses (taxes and healthcare) may change by thousands of dollars one year to the next.

People definitely delight in the occasional saving.  It’s a personal “win” and makes you feel like you beat the system.  However, if your goal is to use your money a little more effectively, it’s worth knowing the impact of political changes so that you can react (and vote) accordingly.

What Are the Bush Tax Cuts

For starters, the tax cuts passed in the early 2000s had a few significant impacts.  Based on 2010 brackets here are the noteworthy numbers versus pre-Bush tax levels.

  • You will save 5% on the first $8375 you make (~$419)
  • Plus 3% on income over $34,000 (another $480 for someone making $50K)
  • Plus $500 per kid (raised child credit from $500 to $1000)
  • Plus 5% on stock gains and 25% on dividends

Remember that your taxable income is far less than your salary.  Just for breathing, the government exempts $3,650 (personal exemption), and because the government knows your a generous giver they assume you have at least $5,700 in deductions (granted if you have more you can deduct that too).  So to be taxed as a $50K earner you would really need to make at least $59,350.

What You Can Do

Nothing. It’s politics. Or stop having kids just to get the child credit (I’ve heard they cost more than $1,000 per year to raise anyway).

No, actually there are some worthwhile moves.  First and foremost, be knowledgeable.  If the tax cuts don’t get extended, you (the average American) will likely bring home $400-800 less in income next year.  For those of you who simply spend the amount of money in your bank account each month, you will be fine but you will end up buying less and continuing your saving achievements of zero.  If you have a budget on the other hand, you may need to make some minor tweaks, but you should be ok.

Second, read the news.  The Democrats basically control the situation right now in D.C.  They want to raise taxes but don’t want to mess with people making under $200K.  If that’s you, then you’ll likely see no changes in taxes (healthcare is another issue).  If you make more than $200K then be afraid, kinda afraid.  Your taxes will likely increase by a few thousand dollars and your inability to lavishly spend, donate, or save like you used to may hurt the economy, but that’s up for debate.

Sigh of Relief

So it looks like the pending doom of slightly higher taxes won’t hit/hurt most of us, yet.  Larger concerns for your immediate finances are healthcare changes, but I’ll save that discussion for next week.  Do be aware that the national debt is swelling quickly and the long term impact is unknown.  Even if taxes don’t go up this year, they will go up eventually.

Got a better question for me to answer?  Submit it here and I will forever thank you!

Photo Credit (alancleaver_2000)
Generous Information Sources
Life, Money

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)
Money

Last Chance to Save with Bing Cashback

The shopping side of the Bing search engine is losing its cashback feature in a few days.  Microsoft debuted Bing Shopping back in June 2009 and used the cashback program to drive awareness to the ability to search for product prices within Bing.  The program offers cash when making online purchases that begin with a search on Bing, but has been a cost to Microsoft.  Now that the service is well known, Microsoft has decided to pull the plug on Friday, July 30, 2010.

Lots of Last Minute Deals on Bing

The cashback program typically offers 2-25% cash back on purchases, and some retailers are ramping up the offers to entice last minute Bing cashback shoppers.  To try it out, just search for the next purchase you’re planning to make on Bing.  Also, don’t worry how small or large your cashback amount is as Microsoft has said it will remove its current constraint of at least $5 in savings before sending you the money.  Here are a few great deals this week.

Where To Go Now For Good Deals

Once Bing cashback is gone the big question is where to go instead for savings.  Thankfully there are a number of similar sites out there that are similar.  Although, an actual cashback rewards style program will be hard to find, the deal sites below offer great discussions of the latest deals retailers are offering.  To test a site out just click a link below and search for the product you want to buy.  I tried searching for Macbook Pros on Slickdeals.net and was able to find a local retailer offering $200 off the going price everywhere else.

Will you be missing Bing cashback?  I sure will, but thankfully the internet will provide other great ways to save.

Carnival

The Best of Money Carnival #48: My Top 10

10 Comments

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.