Tuesday, June 24, 2008
Sunday, June 15, 2008
The first thing you need to know when you create a budget is: what is your income? (If you don’t know, base it off of your worst month ever, and then the rest is extra! IF your worst month is $0, then use the worst month after you started making money.)
Then you need to look at your expenses. There are three types of expenses.
- Savings – 10% gross, invested.
- Fixed – emergency, mortgage, car, utilities, insurance, cable, cell phone, etc. These are the things where you basically know how much they will cost every month. [NOTE: These are NOT really fixed if you cannot afford your lifestyle.]
- Variable – groceries, gas, clothing, entertainment, recreation, gifts, holidays, assessor, personal, unexpected, etc. [NOTE: These are the things you know you spend money on all the time.]
While we were talking about the variable category, we talked about some of the things that we will spend but that people sometimes don’t budget for. For example, holidays. People spend money, whether they have it or not, for the holidays. She puts aside $100 every month, and treats it as though it’s already spent, and then in November or December or whatever, she deletes the lines of holiday expense money from her budget, and suddenly she has a nice holiday fund to go shopping with.
Also, she said that just for this June she has three weddings that she’s attending. She said there’s always money to spend on gifts. On the rare occasion that she doesn’t need to buy a gift for something, she buys herself one.
Where I wrote “personal” under the variable category, she had actually written “Troy/Alayna”. In her budget, she and her husband each get a certain amount of money to spend on whatever they want.
She hates having to pay $150 for the car assessor, so every month she puts aside $25, and then when she has to pay it it’s not as bad.
For the unexpected category, she told us a story. Across the street, they have these neighbors, the Jones’s. We’ve heard stories about the Jones’s before. Anyway, this time she told us they have a son that’s about the same age as one of her kids. (I think like 7 or 9 years old.) Here’s where the story gets awesome: their son’s name is
Anyway, the story ended up being about when her son came home from playing at Indy’s house, totally distraught. It turned out, he accidentally threw a ball that hit a statue, which happened to be a statue that Mrs. Jones’ dad gave her the week before he died. So Alayna talked to Mrs. Jones, and was like look, did your dad carve the statue, or can I replace it, or what, and I’ll replace it. So, a trip to Deseret Book and $350 later, things were a little bit better. Her son earns a $2/week allowance, and she told him it would be coming out of his allowance indefinitely. Heh. And then the same month she had a car problem that cost $1000 to fix, plus something else that was like $600, I forget what. And she didn’t have $2000 set aside that month for emergencies, but having set aside what she did made a huge difference.
She uses Excel and Quicken. It seemed like the important thing for all of it is to stick to the budget, and then also, don’t just rely on your bank balance. It may seem higher because things haven’t gone out, or because you’ve set money aside to go towards something, so you need to follow a budget instead of spending it because you think you have it.
We also talked about debt elimination, and it was basically the program where you get rid of your debt with the highest interest rate first. (If you don’t know how this works and want to, ask me and I’ll explain it to you or find some website that explains it.)
That was the end of our personal finance section, and then we started talking about taxes, that’s separate, but I’ll finish this post with some advice that Alayna gave us: Any time you’re in business, it’s always best to hire people better than you. It makes you look better. (So, don’t feel like you have to be the smartest and best; instead have an attorney that’s smarter than you, and an accountant that’s smarter than you, etc. Because like, they have your back, and they make you more awesome than you already are.
Saturday, June 14, 2008
When you save for things instead of just buying them, you: - avoid buyer’s remorse OR realize you really do want the thing, AND can find a better deal.
As an aside, Alayna said that RC Willey is not a furniture store, they’re a finance company. They make more money on financing than they do on furniture.
The ONLY things that you should finance are: a house, a car, school.
If you have debt, the first thing you need to do is get it paid off.
If you don’t change your habits, nothing will change. You will always have debt.
Okay, this was kind of interesting. There’s a guy in our class who used to work for a company that calculates people’s credit scores, and he said that the way that it works is, credit companies take random snapshots of your accounts. They like you to be carrying a balance of 40-60%. If you have a balance over 70%, it hurts your credit. (So, that has nothing to do with whether or not you pay credit cards in full when you get the statement or not, but just that you’re using the card and not dangerously.)
All of your debt should not be over 45% of your income, and really it should be under 35%.
Alayna’s husband worked for American Express before they got married. He was making like $18-19,000/year, and they offered him either a 5% merit increase or they would pay him 5%. He always thought he wouldn’t work there very long, and he ended up working there 5 years. Even though when he left he was still only making like $18-19,000/year, he had over $10,000 in his 401K when he quit. The moral of the story is, if your company offers a 401K program, a lot of times companies will match what you put into it, and you should take advantage of this as much as you possibly can.
This is the worksheet that we got in class.
Do you stick to a monthly budget?
How much do you spend each month on the following?
Drinks (Big Gulps, Doffee, Alcohol, etc.)
Automobile (gas, maintenance, etc.)
When you see something at the store that you really want, what do you do?
Save up for it
Forego it – you can’t afford it anyway
What is/are your credit card balance(s)?
If you have balances, when do you expect to have them paid off?
What is your interest rate on your credit card(s)?
Do you notice any patterns in your spending? (i.e., I spend more when I’m unhappy, when I’m happy, I buy things when I see other people have them, etc.)
Add up all your debt. (Mortgage, car, credit cards – don’t include things such as food and entertainment). What percentage of your monthly income does it represent?
Does your employer offer savings plans such as a 401K, stock purchase, etc.?
Are you taking advantage of these?
Friday, June 13, 2008
- Never spend your coins. (Alayna says that if you’re someone who uses cash, this can be a good way to start saving. She said her grandfather used to always save his coins, and they would do trips to Lagoon and stuff like that with coins that he had saved.)
- Bring your lunch to work. (She said that he says it will save $25/week. After 5 years, that’s $7,010. After 20 years, $35,600. She doesn’t know how he got those numbers; he probably includes interest, etc, but she said they seem about right.)
- Buy in bulk. (From Costco, etc.) Alayna added, buy stuff at the grocery store when it’s on sale. “I brought proof,” she said, and she showed us a 5 foot long receipt. She has three boys and her husband, and everyone plays sports, and they’re always drinking Powerade. Powerade went on sale, and she bought seventeen cases of Powerade, or 255 bottles. She says it will probably last 6-9 months. She paid $131 for all of that Powerade, and she said that usually it’s at least $1 per bottle, or sometimes even $2 per bottle. So that much Powerade would have cost $255-$500, and she had just saved at least $150 on something they would have bought anyway. She finished that discuss: “Now don’t go buy cat food because it’s on sale and you have a coupon but you don’t have a cat...” So, buy things that you use in bulk.
- Get rid of home phone line services. Now, most people have cellphones, but a lot of people are still paying for extra services on a phone line that they don’t really use. If you drop call waiting and caller ID and all of the fancy services that you’re not using anyway, a lot of people can save a bunch of money here.
- Go over your utility bills. (Alayna said that one of her students did this and discovered that she was paying $10 a month towards some charity, without realizing it. Not that charities aren’t good and important, but sometimes you’re paying for more than you realize.)
- Buy fewer premium TV channels.
- Eat dinner at Happy Hour. (A lot of places offer a lunch menu until 5pm, she said. So go at 4:57, and save a bunch. At this point, Alayna told a fantastic story. She said that last semester she had a guy in her class who was like, “look, coupons are a nice idea, but I’m young and single, and I’m still taking girls out. Is this really practical?” And she was like, “Absolutely! You just have to spin it right. Tell the cute girl, “I’m saving $8 on your meal and it’s going into my retirement account, and did I mention I’m going to be a millionaire by the time I’m 41?” So that was an awesome story.)
- Use supermarket coupons. “Some ladies play Bunko, some ladies scrapbook; I clip coupons. And when I save a buck, I feel like I’ve scaled Everest,” she said. She said that when she goes to the grocery store, she warns the people in line behind her that it’s going to be a while, and they usually choose other lines. One lady was like, oh, well, do you mind if I watch and see how much you actually save with coupons? And she was like sure, and on the receipt that she brought in for this story, she had paid $121 and saved $258.09. She said the lady applauded at the end. Also about coupons, she said that she likes coupons so much that she sometimes buys them on eBay. She paid $1.50 for 20 GM coupons, and saved $20. Ric Edleman (whose suggestions these are, remember?) said that clipping coupons can save you $49,000 over 20 years.
- Borrow movies from the library. Alayna said that you can even get on a waiting list so that you can get the brand new ones right when they come out. And then you get them for a week, for free, instead of paying for Blockbuster or whatever.
- Vacation at home. Not skip a vacation, just skip the airfare and hotel costs. Alayna said her? ( I think) family did this one year when she was growing up, and they spent a day at Lagoon, and went off to see where the Golden Spike had gone in (it’s in Utah), and did vacationy stuff all day every day for a week, and that they had a lot of fun, and that’s a way to save some money.
Thursday, June 12, 2008
We finished the personal finance portion of my Investments class. It started with us watching an episode of Oprah where she had a bunch of ordinary people who had accumulated a lot of wealth on the show. There was this old lady who had saved her whole life, and she only made $18,000/year as a librarian, but she had about half a million dollars to retire with. Another girl had started saving as a kid, and she put basically everything she made in savings, and was going to retire with a million dollars at like 25 years old. And they had financial advisors on the show offering suggestions, and a bunch of stuff.
And there were eight tips from Ric Edelman on how to become wealthy. But they were all tips that made more sense if you were already investing. (Like “ordinary people who invest and become wealthy rarely move from one investment to another” and “ordinary people who invest and become wealthy don’t pay attention to the media”). So if you want to find out about that, you can Google it.
And then in class, we discussed that stuff, and we talked about ways to save money to invest (which seems more practical, I think), and how to start a budget, and how to eliminate debt. Here are some highlights from the class discussion after the movie:
- It’s important to just start saving. Open a mutual account with $100 and put in $25 when you can, and that’s better than doing nothing. It will add up.
- Everyone has needs and wants. If you’re in debt, your list of wants needs to get shorter.
- If you find your self-worth in buying stuff, you’ll never bet wealthy.
- “If it’s on your ass, it’s not an asset.” (One of the ladies on Oprah said that, and they kept repeating it after that. The idea is, if you’re spending money on clothes and other consumable things, those things don’t last and don’t contribute to your wealth.)
- Saving money doesn’t mean that you have to give up everything good. Identify what makes your life pleasant, and keep those things. (Our professor was saying that after watching the Oprah thing with her husband, she joked with him about them getting rid of DirectTV, which was one of the suggestions on the show. He said he would fast every Wednesday so that they could keep it. For them it’s something that they just plan into their budget, like boating, which is another thing that they really enjoy.)
- The first thing you should do each month is save.
- It’s very important that the whole family be involved in the family’s finance. On the show they mentioned that there had been a survey of three year olds, and a bunch? most? of them thought that money comes from ATMs. My professor said they taught her three year old that mom and dad have to work for them to have money. She told us that one time he wanted something and was like “Mom, go to work so you can buy me this.”
- It’s not so important how much money you make; it’s more important that you’re diligent and consistent about saving.
- Our professor said her sister attended
- Are you setting goals and achieving them? That creates happiness and shows your self worth. If your goal is just to have money, you’ll never have enough; there are plenty of celebrities with a lot of money that are unhappy.
Tuesday, June 10, 2008
Today I went to Sports Authority to buy some swim paddles. I picked up "Cycling Utah" while I was there. It's one of those free newspapery magazines that you can grab at the door. Since I'm cycling these days, I thought it would be something good and motivating to page through/read while I waited for the bus after the gym.
It was good. It has a list of all of the different races and stuff, and a bunch of articles. Also a bunch of advertisements for races and bikes. One quarter-page ad caught my eye. For your pleasure and enjoyment, I will type the copy from the ad.
The Rotary Club of American Fork proudly announces the Inaugural Utah...Tour de Donut!
Join us July 12, 2008 [and then there's location and time information with a little map]
It's simple. Race 21 miles and see who is the king donut! In circuit style, ride 7 miles, then eat as many donuts as you would like. No limit. Then, ride 7 more miles, eat more donuts, then ride the last 7 mile lap. Glory and adulation are waiting for you at the Finish Line. Proceeds benefit the Utah Amber Alert ID project.
[In a fancy circle on the side: "For each donut eaten you'll get a 3 minute time deduction!"]
Visit www.utahtourdedonut.com for more information
I don't really like donuts, and I don't know how I would do on a 21 mile bike ride...but I did think the idea was really clever (and random) ! Who knew donuts could be incorporated into a bike race?!
Thursday, June 05, 2008
The New York Times makes my life more interesting. A few days ago I was reading the paper while I waited for my train. A guy sat next to me, and he joked about how I was in
Normally though, the New York Times is fun because of the amusing articles.
On 2 June, there was a story about this guy Dan Walsh, who started altering
Then yesterday, there was an article about a guy, Everton Wagstaffe, who had been imprisoned for 16 ½ years for a murder that it looks like he didn’t commit. There was one witness, and she was a drug addict and prostitute, and it looks like the case was in a long line of cases where there were witness tampering. So this guy has been waiting, and he’s served his minimum 14 year sentence, and he’s still there because he refuses to express remorse to the Parole Board since he’s still saying he didn’t do it. As part of the interview they’re talking about how he’s held up, and he says “There are times I feel beaten down. But then I read about these other people being cleared, and say, ‘My day is coming.’” There was a ton of evidence, too, because the poor murdered girl had hair in her hand, stuff under her fingernails and hairs found near her genitals. Except! The evidence had been lost and they finally just found it last July. They’re not done with the DNA testing yet, but so far there’s no trace of this guy. At the end of the article there’s another quote from him, “During all these years, I learned the importance of strangers. One does not really have to know somebody to help somebody. Just being a human alone is enough.” I just always like stories of people who are optimistic and positive, and hopeful.
There was another interesting story recently, about these berries that make everything taste sweet for awhile, but Jeremy Blachman wrote a sweet post about it already, so I’ll just link to his. He also links to the original article, which is very interesting.
Today I’m planning on (finally!) making cheese, so I’ll probably have a post about that soon.
2. Pawn shops are a good place to buy jewels. You don’t have to have an ugly wedding ring, just have it re-set in a setting that you like. “Do you think the diamonds from diamond stores were just mined in
3. She taught us about “shorting”, which is the way to make money when you think that a stock’s price will be falling. Basically, what you do is sell stock that you don’t technically own, with the promise that you’ll buy it back later. (And you buy it at the lower price after the price falls.)
The example that she gave us of how it sort of works, is, she wanted these yoga DVDs. And she couldn’t find them anywhere. And she found them on eBay as a Buy It Now, so she bought them. (She likes Buy It Now because someone always outbids her at the last moment in the regular auctions.) And then a box came from Overstock.com. So the seller had ordered it for her on Overstock, and pocketed the difference. And at first she was like “Heyyyyy” because she could have gotten it for less, if she would have just checked Overstock. And then she was like “Good for them,” because that’s a smart way to make money on eBay. And that was her example of shorting.
She said there are two movies that have good examples of shorting: “The Runaway Jury” and the recent James Bond one, “Casino Royale.”
She also reminded us that after 11 September, trading had been closed. She said it’s kind of interesting because the terrorists hate us, and they hate our capitalist society, but that they funnel their money here, because they want to make money, too. She said that on 11 September, a lot of businesses were affected. Obviously. So like suppose you have stock in some company whose office was in the
4. Here’s another interesting story. It’s kind of similar to the movie Catch Me If You Can, with Leonardo DiCaprio. SO, the regulatory agency for stocks and stuff is the SEC, which is the Securities Exchange Commission. And what they do is not make sure that you always make lots of money, but they make sure that you have all the information that you need to make informed decisions about the risks that you make with your money. Okay, good, great. WELL, know how in Catch Me if You Can the guy is like the best of the best at counterfeiting and he ends up working for the good guys? The same thing happened with the SEC. Joseph Kennedy was like the grandfather or something of the Kennedys that are all famous now. And how did he make so dang much money? Bootlegging. Mafia involvement. Insider trading of stocks. When the depression hit, he was one of those people who would pay pennies for stocks, and for farms, etc, just because some people were so desperate that they would take anything. So since he was super shady and totally good at insider trading, he was chosen to be the first SEC Commissioner. Awesome. I had no idea that the Kennedy family made all their money through shady stuff.
5. If you’re looking to invest, don’t jump into the first thing you find. Look around and see if you’ll be getting the right amount for the amount of risk you’re taking.
6. We have this guy in my class who has a bunch of credit card debt. It’s really funny because he talks about debt and different ideas and questions that he has, and he’s super open about it. But our professor pretends that it’s all a hypothetical situation. Like nobody would possibly make such a big mess of their finances. “Everything in this class is always hypothetical,” she says. And everyone kind of laughs about it.
7. One final interesting thing from Investments, which you may know if you’re a math person, but I didn’t know. It’s called The Rule of 72. Basically, you divide 72 by your interest rate and the result will be the number of years that it will take to double your money. It’s not perfect, but it gets you close. Neat!
I had a couple more revealing thoughts about poetry: first, I decided poetry is kind of like a magic eye puzzle. Some people are really good at figuring them out, but to me they’re just a big mess of no particular picture which I can sometimes see lines or shapes in a little part of, but that’s about it. Second, I think a new way to write poetry would to use Babelfish and have something go from language to language and then back to English. The jarbled text would instantly be full of hidden meanings for readers to discover. I guarantee there would even be poetic devices in the poems, just by chance, so we could analyze those, too.
People in my class like to describe most of the poems the same way—the lady behind me thinks probably half of the poems are about divorce, because she’s been through two divorces. Another girl in my class describes most of the poems as “childish” or “immature”, (because she was once a child and immature? Hah.) Serious poems, funny poems, whatever, they’re all about divorce and they’re all childish. Mmmkay.
My professor has a funny way of describing things, which makes class more exciting. She was telling us a few days ago that she can’t summarize books. She said someone will say “Oh, you’re reading that book, what’s it about?” and she says she’ll either say something like “There’s this man and another man and they talk a lot” or she’ll try to tell them every page. I thought that was kind of funny.
Or she said she felt like she was “selling herself,” because she kept reminding us of her office hours and encouraging us to come by if we have questions. “I’m available to be utilized as a resource,” she rephrased.
We were talking about the crisis in traditional plot structure, and she said “Crisis is not always super dramatic. THE BUILDING’S ON FIRE!! PEOPLE ARE JUMPING OUT THE WINDOW!! It can be subtle.”
She also dresses really cute.
Tuesday, June 03, 2008
Well, there's this Go Vegetarian/Vegan!!!!!!!!! starter kit that PETA makes, which every website recommends. Okay. Well, here's the thing. I joined PETA's mailing list back when I was like 10 years old, and their junk mail was so intense that I still remember it now.
All I wanted was just the one packet of stuff. So, thinking of Optimistic (who intentionally misspelled his name on some of his graduation stuff) I decided to alter my name a little bit.
Instead of having it come to Emily, I had it come to Enily. Which looks similar, if you're not looking. For my last name, I changed the y for a u, which looks like a y when the bottom gets cut off.
Hah. Funny. So the packet came. It was basically useless because I was interested in vegan cooking for health benefits, and I don't care very much about crying chickens. (As Brutus would say, "Please don't hate me.") I looked forward to watching other misspelled junk mail come, since I was sure they would keep sending me stuff for the next long, long time.
I forgot a critical component of my PETA junk mail from so long ago....
See, PETA sends petitions and stuff, but they also send free "gifts".
For my first non-vegan-packet mailing, I got a big envelope of petition and animal rights stuff, with two free "gifts". The first free gift was a set of address labels.
The second free gift was...also a set of address labels.
And today I got another packet from them. This one has a questionnaire which I was tempted to fill out honestly, and instead threw away (to be nice). And it came with two! free! gifts!
The first free gift was....a set of address labels! "Dear Enily, please accept these personalized labels and decal to show that you care about animals who are being abused." (Who? Is that the right pronoun? Hooray for subtle personification!)
And the second free gift was....you guessed it, a set of address labels! (With some "special" stickers.) "Dear Enily, please accept this second set of personalized labels and stickers in appreciation of your support."
Soooo, I threw away the last set. Now that I have 60 more today, I'm starting to consider actually using them. Hey, free address labels. Probably nobody will notice anyway.
And the "special" stickers are also...well...special! They say things like "KEEP SMILING" (with a rabbit), and "THINKING OF YOU" (with a duck), and "BEST WISHES" (with a lamb). I won't spoil the excitement by revealing all of them. That way, you can get some "special" correspondence from me and still be surprised.