Lottery vs Investing

Instead of throwing away $2 a week on lottery tickets for the next fifty years, invest that money in an aggressive growth mutual fund. Don't even think of saying that such an investment is too risky. Investing your money in the lottery is the ultimate risk and for all practical purposes carries a percent guarantee you you'll lose your money. Remember: The lottery is a tax on the ignorant.

Very excellent idea. Although finding a fund that only allows you to invest $8/month may be hard, unless you are using ShareBuilder.com

Quote of the Day

If a man empties his purse into his head, no one can take it away from him. An investment of knowledge always pays the best interest.

-- Benjamin Franklin

Homes of the Billionaires

Now lets look at the homes of the billionaires. More examples of paying cash and only buying what you need in a home. See Warren Buffets home in the picture below, he bought it in 1958 for $31,500. The home is now valued at $500,000.

How does the other half live? Well, it depends. Try more like how the other .00001% lives.

According to the National Association of Home Builders, the median American house size is slightly more than 2,000 square feet. Compare that to the domicile of the world's richest man: as might be expected from one with that sobriquet, Microsoft (nasdaq: MSFT - news - people ) founder Bill Gates' house is more than 30 times that size. The NAHB says that most houses have three bedrooms, one fireplace and are sided in vinyl or aluminum. Some billionaires' homes have more than a dozen bedrooms; the only vinyl is in the rare-record collection housed in the custom-built listening room.

Yet as extravagant as some of their mansions may seem, the homes of the superrich are not out of proportion to their wealth. In fact, they can seem comparatively downright modest.

Warren Buffet
Omaha, Nebr.

Net Worth: $42 billion
Rank: 2

The Oracle of Omaha lives in mighty modest digs, given the size of his fortune. He still resides in the gray stucco home he bought in 1958 for $31,500. Totaling about 6,000 square feet, in 2003, the Happy Hollow house was assessed at just $700,000 (though the value investor thought it was really worth about $500,000). Buffett sold one of his two Laguna Beach, Calif., properties, but still has one valued at about $4 million. That's still less than one hundredth of a percent of his estimated net worth.

A report released by the National Association of Realtors last year pointed out that in the U.S., about a fifth of a household's wealth is composed of home equity. Let's say that held true for Warren Buffett. The mastermind behind holding company Berkshire Hathaway (nyse: BRK.A - news - people ) is second on our list of the World's Richest People, with an estimated net worth of $42 billion. If he sank the average 20% into his home, the property would have to be worth...oh, approximately $8.4 billion. In other words, the gross domestic product of Libya.

Instead, Buffett lives more like a millionaire than a billionaire. For nearly 50 years, he's bedded down in the same Omaha house he bought for $31,500. Although far from elaborate, it is still more than adequate. In 2003, the local assessor pegged its value at nearly $700,000. Buffett disagreed--he thought it was worth more like $500,000.

Buffett's not the only penny-wise homeowner on the list. Ingvar Kamprad, founder and former chief executive of home furnishings giant IKEA, is a notorious tightwad who drives a second-hand Volvo despite his estimated $28 billlion fortune. His house in Lausanne, Switzerland, though hidden behind a high hedge, is said to be surprisingly unremarkable. He does indulge in winemaking, at his small vineyard in Provence, but has been known to complain that it's an expensive hobby.

you can read more by clicking here

The link includes a picture slide show of the homes, for those interested in viewing he homes.

What do the Billionaires Drive?

A reader of this blog (PyroGuy), who has become an occasional contributer, posted this link in his first article. I thought I would expand upon it this morning:
What do the Billionaires Drive?

The cars and trucks driven by those in the Top 10 of the 2005 Forbes list was, in short, shocking. You won’t find a Bugatti, Ferrari or BMW driven by these billionaires. But you will find a Lincoln, a Mazda, even a Dodge and Ford. It seems that for the super-rich, a vehicle is seen not as a status symbol, but as a means to an end in which to get from point A to point B. Status is something that these billionaires need not prove to others. In many cases, the people on our list prefer to live inconspicuously, avoiding the limelight at all costs. This might explain why many of their vehicles cost less than your own daily driver.

Forbes compiled the list, by obtaining motor vehicle registration records from each billionaire’s respective state. For those not residing in the U.S., they relied on interviews with company representatives or past interviews with the billionaires themselves.


Bill Gates
Rank on Forbes.com 2005 World’s Billionaires List: 1
Net Worth: $46.5 billion
Vehicles Owned: 1999 Porsche 911 Convertible (pictured above); 1988 Porsche 959 Coupe
Source: State of Washington Department of Licensing

Warren Buffett
Rank on Forbes.com 2005 World’s Billionaires List: 2
Net Worth: $44 billion
Vehicles Owned: 2001 Lincoln Town Car Signature Series
Source: Nebraska Department of Motor Vehicles
His license plate reads: THRIFTY

You can read more by clicking here

The point as is has been said through out this blog is to avoid borrowing. Instead of borrowing, save the money into a savings account and drive your vehicle into the ground and then go out and buy another one with cash. Don't buy a new car. Buy a 2-year old vehicle and let someone else take the depressiation bath.

Money From The Sky

Ok, maybe that's an over exageration. However, I was not expecting the check that I got in the mail this past Saturday. My dentist sent me a refund check of $20.40. I think it's been close to six months, since I last visited the dentist. I am truely amazed to get this money. I have put it into my Insurance/Emergency Savings Fund. This account not has $134.90. I am slowly working my way up to the $3000 goal. As I have said before, I attend to be there within 10 months. At the end of that 10 months, my intention is to start paying my car/home insurance annually, instead of quarterly. This act alone will save me the $4 convience fee that the insurance company charges, each quarter. The interest alone will more then pay my annual dues to the association (Farm Bureau) that I get my insurance through. In addition, there will be just over $1000 extra to cover emergencies and deductables so that I can raise my deductable to $1000.

currently deductables are:
house $500
cr $250

Carnivals Are Up

Hope all the readers in the U. S. had a great memorial day. The 50th edition of the Carnival of Personal Finance has been posted at My Open Wallet! Here are some of my favorites:

Free Money Finance Guide to Making More Money

What can we do to make financial blogs relevant?

Are Your Finances Ready For A Disaster?

Lesser-known Debit Card Fees

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The current edition of the Festival of Frugality has been posted at Mighty Bargin Hunter. Here a some of my favorites:

Cheapskate Grocery Challenge!

Setting Goals for Financial Freedom

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The Carnival of Debt Reduction! has been posted at Kirby On Finance! Here are some of my favorites:

Radical Saving!

Credit Card Alternatives

Keep the Change

There you have it, my favorite posts from all 3 financial carnivals. All 3 carnivals mention this blog.

Take Charge of YOUR Debt

I work nights at a major regional grocery company as an over night manager. When I arrived at work last night, I seen our company newsletter arrived from headquaters in Oklahoma. To my surprise and delight was this interesting note on Personal finance:

Dig yourself out of debt - or avoid pay-by-credit pitfalls in the first place.
Last year there were more then two million consumer bankruptcy fillings in the United States. It is time to get back in the BLACK.

Determine Your debt

Prioritize Bills

Focus on High Interest Bills

Switch to Cash

Keep a Spending Journal

Sounds like someone at corporate headquarters has been listening to John Cummuta and/or Dave Ramsey. (or maybe reading this blog! :) **Well probably not**) It is so great to see a business that accepts credit cards to suggest their employees to pay cash, get away from credit and get out of debt.

A Couple of Thoughts

Good morning. It's about my bedtime, but before I go to bed, I thought I'd mention a few things while I am thinking about them.

1) I paid $295 towards my debts this month, as reported by No Credit Needed. That means that I am now up to 9.5% of my debt has been paid. My goal is to be compltely debt free, including my IRS debt, by 5/31/2008.

2)Yesterday, I joined the Topeka, Kansas FreeCycle.org. 3 things I am looking for is a Futon (that folds down into a bed), a laptop and 2-5 bar stools (29"-33") with backs.

Buying 2nd Hand Is A Way Of Life

Frugal For Life recently wrote a Consumer group doesn't buy notion that new is better

"About 50 teachers, engineers, executives and other professionals in the Bay Area have made a vow to not buy anything new in 2006 -- except food, health and safety items and underwear. They call themselves the Compact. They have a blog, a Yahoo group and monthly meetings to reaffirm their commitment to the rule, which is to never buy anything new"

"Compacters can get as much as they want from thrift shops, Craigslist, freecycle.org, eBay and flea markets, as long as the items are secondhand. And
when they're in doubt, they turn to their fellow Compacters for guidance."

"We had a little crisis when Matt and Sarah had to replace their shower curtain liner and we said no," said Perry, who lives in Bernal Heights. "But we put the word out and someone found one for them. It's like the Amish -- we help each other out. We raise a barn every week."

She quotes from an aricle originally published Here.

She concludes that it sounds like a good idea, that should be carried out in cities and towns accross the country. I have to agree.

In fact I have been doing this for quite a few years. Though in January, before I started my debt-free, cash only goal, I signed a six year note on a 2004 Malibu Classic. It is the newest thing I have. Would that be today, I would not have done it. Instead I would have found a car under $5,000, though it would probably have a lot more milage on it, it would be more within my budget. Should I sell this car? If I apply Dave Ramsey's teachings, that would probably be a yes. Will I? Probably not. It's the nicest thing I have ever had and I have another source of income, that I am using to build my emergency fund. This same fund, will also include enough funds to cover my insurance and check payments. That means instead of $1000 emergency fund, this savings will have better then $3000. It will take me 10 months to save up this much, but at that point I can switch from quartly insurance payments to annual. This will save me $4/quater and allow me to earn $30-$60/year in interest instead.

While I am building this fund, I will still be applying an additional $50-$100 extra a month to th car payments. Afterwards, I can apply another $200/month to the car payment, while continuing to apply $100/month to this savings to cover the insurance and tax payments.

I currently have $115 in this account, after I paid $339 in insurance this month. My hope is that in August when the next quartely payment is due, I can increase that to semi-annual and six months from then annual.

But I am straying from the topic at hand. The point is I don't own anything new, and buying 2nd hand is a way of life.

By the way I am looking for used futon to use as my small bedroom. The type I am looking for is one that folds down into a bed. The idea is that I can use it like a futon, nights that I am off work and watching videos, but can replace my bed in the daytme when I am sleeping. In addition I am looking for a barstool (29" or slightly higher) with a back on it. If you are in Topeka contact me and MAYBE we can work something out.

Free Samples

I recently found some free samples online. I checked each of these out, and NONE of them have those stupid forms in which you have to buy other items to get the so called free item. Everyone one of these are just plain simple fill out the form and in 4 to 6 weeks you will have the free items in your mailbox.

The links were suplied byUdandi & the craft of money. As she says,

Please do not abuse this opportunity by requesting multiples by using your home and work addresses or submitting your pets names and limiting the opportunity for others :)

Disclaimer: I bear no responsibility for any marketing emails you might receive as a result of signing up!

Ok, now for the list:


Crest Glide Deep Clean Dental Floss

Comfort 3 Advance!


From Wal-Mart

Glad ForceFlex trash bags

Dove Shampoo, Deodorant or Lotions

Reynolds Slow Cooker Liner

Dave Ramsey: The New Bankruptcy Law

I came accross a blog tonight, that was very interesting. TreyJackson.TypePad.com who writes about Dave Ramsey's appearance on CNBC who discussed the new Bankruptcy Law. He even included the video of the nearly 4 minute discussion.

Ramsey: New bill is "horrible".

Ramsey: "No one except for me and Ted Kennedy are standing up for the consumer. I can't believe we're on the same side."

Watch the video here

Very interesting. Great comments, and I likewise can't believe I actually found something to agree with Ted Kennedy on.
Did hell freeze over?

Fraudulant Charges

I have found another excellent reason to bank online (my old credit card, also allowed me to view my account activity throughout the month). Last night, when I woke up (I work nights), I logged into my bank account and seen two (2) charges for $9.95 that I did not recognize. I tried to call the number listed for one of them and the phone company said the number didn't exist. The other number, had a guy stuttering, asking that I leave a message or for "faster achievment" to email them. This morning, when my credit union, first opened for the day, I went in and talked to the the president, and then to another person, to fill out paperwork on the fraudlant charges. By doing this, the charges were redeposited into my bank account. They also cancelled my debit card and issued me a new one.

When I arrived back home, I put both of these company names into the search engine and found a link on the Better Business Bureau website regarding one of the names. My search also seem to indicate that even though they are in 2 different statesthat they are really the same. In addition, a message board indicated another name that seems to be linked.
Below are those three names (*=names that were on my debit card):
* KCsoftLLC.com
* U-webTemplate.com
absolute-soft.com

Check your debit card and credit cards (if you still have the nasty CC's) regularly for any fraudlant charges.

Here is the link to the BBB's information.

Bargaining in our Culture

In our last Financial Peace University lesson "Buyer Beware", the discussion question was asked:

What phenomenon in our culture has caused people to stop finding good bargains?

We had many responses from the class, including the availability of credit cards and the wealth of our country. However, I believe there's more to it than that.

What I believe is the main resaon for our tendancy to stop bargaining for things is perception. What I mean is that society has taught us through commercials, tv, movies, etc. that "rich" people throw away money, often frivously. But do they? ForbesAutos.com did a report showing what the top 10 billionaires (bilionaires) in the world drive. The answers might surprise you.

To carry my idea further, the reason I believe Americans have stopped bargaining for deals is that since society believes the wealthy throw away money, the ability of one to spend money is perceived as one's worth, or value. Thus, to bargain for something would be to say "I can't afford this, so I need to pay less"...inferring that our value is less.

However, the correct assumption would be "I can afford this, but I don't think it's worth what you are asking for it."

Do you bargain for stuff? What types of things do you "never pay retail" for? What are some of the things you do to get a bargain?

TV insurance offerings

NEVER buy insurance from television or direct mail ads. This is a sleazy marketing ploy. The premiums are at least 400 percent too high for the coverage, and the exclusions are mammoth.

- Cheapskate Monthly's Tip of the Day for 5/19/07

KGS Looks To Slap Poorest Consumers In The Face

I read in yesterday mornings Topeka Capital Journal, that the Kansas Gas Service (NYSE: OKE) wants higher rates. According to the article, KGS has incurred significant increases in costs associated with employee medical and pension benefits as well as property taxes. Then after saying all that, in the same article it reports that their profits are up in the "first-quarter 2006 net income increased to $129.5 million, or $1.17 per share, compared with $107.7 million, or 97 cents per share, in the same period last year."
Let me get this right a multi-million dollar company is complaining that it's costs went up at the same time that their profits increased? So they want punish the poorest individuals out there, so that they can get richer?
There are many people out there, that very few seem interested in speaking up for. It is high time that someone did! These people make $15,000, $10,000, or even less sometimes in a given year. It is these people who struggle to come up with even a dollar at the grocery store, because all their money went to these greedy utilities. To raise the rates on them would be smack in the face of each and everyone of these individuals. If the KCC approves this increase, they would be just as guilty of smacking the consumer in the face, as these greedy utilities.
Where do you stand? Are you in support of the greedy corporations, that could care less for how these rate increases effect the consumer? Or do support the poorest of the consumers, who would be impacted the hardest?


Published Topeka Metro News 5/19/06


Published Topeka Capital Journal 5/21/06

Creative Begger

I found this picture, while reading several blogs over the past few weeks. Like one of the other bloggers said, I would be willing to give to this guy. If for no other reason then his humor and creativity.

Accelerate Your Loan Payments

Savvy Saver writes,

Many people already know that paying their mortgage payments bi-weekly or weekly is a good way to shave some time off their mortgage without overstretching their budget. In some instances, it can take as much as seven years off of a 30-year fixed mortgage. Dinkytown has a great calculator that will tell you how much bi-weekly payments will save you over the life of your loan. But are the bi-weekly payment services offered by mortgage companies worth the extra money?

Very good article. I love the calculator even more though, only problem is the calculator doesn't figure in extra payment amounts.

However, I must say that if you start making bi-weekly or weekly payments, don't use the mortgage company's accelerator program. They will charge you at least $1/week to do it as well as automatic payments from your checking or savings account. The better way is to make the payments your self, even if you use your banks online bill pay feature. Just make sure your monthly paynent amount arrives in total, by the due date.
In fact what I am doing with my car payment or soon will be (as soon I finish up the last 18 weeks of my "little" 2nd mortgage), is using the Dave Ramsey method and make bi-weekly payments of the total car payment. In most months that means I would be making the car payment twice.
I can only do this because, I recently got a raise and I payed off the larger mortgage. So the second car payment, would be what I had been paying to the mortgage company. By using both these methods, I will have a six year (72 months) loan paid off in approxmatly 2 years. Saving lots of interest, and keeping all that interest away from the car finance company. At which time, I will be debt free in the areas of loans, and can focus 100% on any remaining balance owed to the IRS.

Life Insurance and the Single

If you're single, buy life insurance only if someone is financially dependent on you and would suffer an undo financial hardship if your income were to suddenly disappear. Most singles have no reason to carry life insurance. - Cheapskate Monthly

OK, let's be frank: If you have no one depending on your income, you probably can do without a policy. There’s no need to buy while you’re young and insurable, despite what they say. And there are better ways to build up a tax-free nest egg if you’re young. (My favorite is to set up a 401-k or Roth IRA account.) And remember this: If you’re young and die suddenly, your job benefits will probably cover funeral costs. Your debts will die with you. And leaving life insurance proceeds to your parents will hardly compensate them for the loss of a child.

Saving Money at the Gas Pump

With rising gas prices, experts say that there are a number of things that we can all do to save at the pump. Some of the things are things we acctually do at the pump, while others involve driving habbits.

Don’t top off your tank, overfilling is bad for the enviornment and you may pay for gas that won’t make it into your tank.

Driving sensibly and avoiding rapid acceleration and braking can lower your gas mileage by as much as 33 percent on the highway and 5 percent around town

Watch the speed limit! Each 5 miles per hour you drive over 60 is like paying an additional 10 cents per gallon.

When the pump automatically shuts off, turn the handle upside down 180 degree to release the small amount left from the pump to make sure you get all the gas you’re paying for.

If you are on the highway, maintaining a steady speed conserves fuel.

One of the biggest tips is to plan your outings ahead of time to cut down on driving. Find a shopping area where you can get most of your errands done in one trip.

Sometimes when you come to an intersection, you'll see three or four gas stations. Don't assume that just because they're right next to each other they will have the same prices. They could vary by as much as 10 cents a gallon.

When operating in overdrive, the car's engine speed goes down, which saves gas and reduces wear on the engine.

Shop for gas during coolest time of the day, when gas is at its densest, so you get more for your money. Another tip, relating to time and day is, The day and time when you buy gas does matter. Through Labor Day, don't buy gas on Mondays and Thursdays. After Labor Day, don't buy gas Wednesday evenings or Thursday mornings. It's generally best to buy gas before 10 a.m., because that's when prices change. All though, I am not sure why those specific days.

A lot of people think that turning the air conditioning off will improve gas mileage, but they are wrong. If you open the windows, which you probably will, that increases drag, and overall, you'll get worse gas mileage. So you're better off keeping windows closed and the air conditioning on.



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And, if it makes you feel any better, when adjusted for inflation, the price of gas hasn't reached a record yet. The all-time high, $3.16 a gallon in today's dollars (according to CNN), was set in March 1981. All though, a very few places, in recent weeks, it has come dangerously close to this high mark.

B.C. on Credit

B.C.
I found some humor in this cartoon, even though it is also serious business.

Why You Should NEVER borrow To Invest

Over the past few weeks, I have had people actually tell me that they can borrow at 0% (for say 11 months) and then use the money to invest. I am finally going to address what ome financial experts say about that faulty idea.
Crown Financial Ministries says,

Debt presumes on the future. When people commit themselves to payments over a period of time, they are presuming that there will be no pay reductions, no loss of job, and no unexpected expenses. That is an improbable assumption (see Proverbs 27:1)Do not boast about tomorrow, for you do not know what a day may bring forth.

Suppose you borrow for that awesome investment, that is earning higher interest, and next week your company files bankruptcy and there is no payroll checks? How are you going to make the payments? The same could be said if you were laid off or had to take a cut in pay.

I personally know about pay cuts. I took a $2 pay cut, after just over a year, I received a promotion to a higher position then I had before, but my pay still not equal to what I was making before the pay cut. It's called life, things happen. Never, presume you can just continue on....pay off your debt and pay cash for everything.

According to CFM, some other reasons include:

Debt could delay God’s plan. God said that He would provide for His people’s needs. Debt allows needs to be met now, from a means other than through God’s provision. Debt provides instant gratification, at the expense of financial freedom, rather than waiting on God’s perfect plan and His perfect timing.

Debt clouds the line that separates wants, desires, and needs. Needs are necessary purchases such as food, clothing, shelter, medical coverage, transportation, and others. Wants involve choices about quality of goods. Discount shopping versus specialty shopping, lobster versus chicken, or a new car versus a good used car, and so on. Desires are those things that can be purchased only after all other obligations are met and only if there are surplus funds available to purchase them. Debt allows desires to become wants and wants to become needs.

Debt eliminates family financial planning. Rather than planning for the future and allowing for a margin of errors, overruns, and changes to dictate future financial development, debt eliminates the necessity for future planning because the course for the financial future of the family will have already been set: pay the debt that has been accumulated.

Debt teaches children that the world’s method of managing money is normal. Debt causes children to have a casual regard for using credit cards, obtaining loans and mortgages, and keeping vows to pay the bills. For this reason, we have children who have graduated from college by borrowing for education expenses and living to the limit of their credit cards. They have never considered paying cash for transportation or anything else and have begun adult life with so much debt that they have to work for years just to pay for the debt accumulated during their college years.

Finally one final note from the CFM article,

Christians today are generally polarized into two opposite groups. One feels that the Word of God forbids any and all kinds of debt at all times (see Romans 13:8). Some of these even feel that debt is a sin. The other group assumes that debt is an acceptable and normal way of life that God often uses to meet the needs of His people. Neither of these viewpoints is totally accurate. Although debt is not a sin, it also is not a normal way of life, according to Scripture. Rather, debt is a dangerous tool that must be used, if at all, with extreme caution and much prayer due to its potential for enslaving people in financial bondage (see Proverbs 22:7).

Eleven Guidelines To Frugal Living

Over the years I have read or listened to a number people on the subject of finances. Right at the top of my favorites was, the late Larry Burkett, best known for his daily radio show, "Money Matter's." One of the books that he recomended, was one intended more for moms, but still has some excellent advice, even for us single guys. The book am refering to is, "Mi$erly Moms," by Jonni McCoy. Included in this book are 11 miserly guidelines.

The first thing I did was look at those items in our budget that were not fixed. This was any expense that fluctuated (such as food, gasoline, clothes, utilities, etc). My next plan was to chip away at them.

What resulted from her look at expenses were the following eleven guidelines:

1) Don't confuse frugality with depriving yourself.

If any money-saving activity makes you feel cheap or tight, then you will abandon your savings ways, thinking this is how all saving ways are going to make you feel. That is not the price we need to pay to reach our goals. I don't need to feel tight... There are other ways to save money and keep my dignity. Many people think the two cannot be linked.

2) Give up things that provide the least value.

When I kept track of everything that I spent over a month's time, I was surprised at how many times I had suandred money. This is an activity I recomend to anyone who is serious about saving money.

Those little trips to Target and lunches out at McDonnald's will keep you from reaching your financial goals. It is amazing how much of a drain they are on the budget. When I feel like dropping into the golden arches or going to Target, I remind myself that those trips make things unattainable that are higher in priority on my list. Those trivial buys here and there can wipe out all that you have saved. One lunch per week at a fast food restaurant costs $35 per month (one adult and 2 kids). I could apply that towards a bill or vacation fund.

In order to make things work, I have to make a budget and stick to it. Anything that I want to do that isn't budgeted for has to wait untill I save for it.

3) Keep track of food prices.

I started to keep track of prices on foods in my local stores. At first I started writing down the regular retail price of things that I commonly used at each of the stores. Then I added the best sale price for those items at the same store. By adding the best sale, I created a goal for myself. For every item, I always included the unit price (ounce, pound) so I had an easy comparison. This is important as package sizes vary. Many companies are reducing the size of their containers instead of increasing their prices (i.e. tuna cans used to be 6 1/2 ounces, but are now 6 1/4 ounces).

4) Don't buy everything at the same store.

No one store has the lowest price-not even the warehouse clubs. As I learn more about the art of being miserly, my bills keep dropping.

Also include coupons, when shopping. However, remember only use coupons on items you normally buy, unless the item is cheaper then your usual brand.

5) Buy in bulk wherever possible.

6) make (and grow) your own wherever possible.
I remember as a teenager, my mom making her own baby food by puraying fresh vegies in the blender.

7) Eleminate convenience foods.
prepackaged and frozen meals cost 3-4 times the cost of making it from scratch. At the same time at restaurants costs 6 times of making the same meal from scratch.

8) Cut back on meats and poultry.

9) Waste nothing.

Save all jars that you bought something in (mayonnaise, syrup, etc). Reuse them for your homemade syrups, chocolate sauces, salad dressings, etc.

Save cardboard oatmeal boxes as storage conatiners for dry goods (your homemade granola, bulk items bought from bins, or even small toys).

Save ceral boxes for magazine holders (cut the side off, diagonally).

Ship cookies to friends in Pringles cans. They reduce breakage.

wash out plastic mustard squeeze bottles and fill with homemade colored frosting for cake and cookie decorating.

reuse margarine tubs for food storage.

many people resealable freezer bags by washing carefully and the checking for leaks.

if you make your own baking mixes, save the large dry laundry detergent buckets. Wash out WELL before use.

10) Institute a soup and bread night once a week.

Having soup and bread for dinner once each week helps us to stay within our food budget. Soups are inexpensive to make (when made from scratch), and they are nutitious. There are varity of soups in the world, you could try a new evry week and never repeat a soup recipe all year.

11) Cook several meals at once and freeze them.
Have a "cooking party" once a month with your family and then package and freeze these items, then all you have to do each night is pull one of the meals from the freezer and heat it up.

We Are Growing

This blog is beginning to be discovered. I started only about 6 weeks ago, after listening to John Cummmuta's CD's, "Transforming Debt Into Wealth" (TDIW). Since then, I have began attending Dave Ramsey's, "Financial Peace University," siminars. Very interesting and very simaler teachings, as you have read in my past posts. When I started out I only had 2 or 3 visitors a week, then that became 3 or 4 visitors a day. Then yesterday, one of my posts was mentioned in the "Carnival of Debt Reduction wk 34," hosted by Frugal For Life, which by itself brought in better then 40 visitors by the mention alone.





In addition, late last night, I became member of No Credit Needed, which is great, because they are kind of an accountability partner and help you stay focused on becoming Debt Free. They even create a neat little chart, to keep track of that debt reduction. You can see mine, both on their page as well as below:





When I first started this I had no idea how many personal finance blogs that there were out there...since, I have enjoyed reading many of these.

Why Should Everyone Pay Off The Mortgage Early

Ever since I started listening to John Cummuta and Dave Ramsey, I keep hearing people say but, "I don't want to pay off my house. I would lose my tax deduction on mortgage interest. Besides I can invest the extra money and earn more money."

I say Horse Hockey!" As Ramsey says, only his "broke financial advisers" teach that. Let me try to explain to you the truth as both Ramsey and Cummuta tell it. First let me ask what tax bracket are you in? Let's say you, as Cummuta was, are in the 28% tax bracket. That means for every one dollar ($1) of interest you pay to your bank, you get to save 28 cents in taxes."

Now, let me say you will still get your tax deduction the entire time you are paying off your mortgage. It only ends when the mortgage is paid off. OK back to my explanation.

Each dollar of interest you pay to the bank (or mortgage company) is deductible from your taxable income, which saves you the 28 cents you would otherwise have paid to the government on that dollar as income tax. But think about that. You're giving up a full dollar to save 28 cents. Whereas, if you pay off your mortgage, you will indeed have to pay 28 cents federal income tax on each dollar not going to mortgage interest...but your getting to keep the other 72 cents (72%)! Ask yourself, would you rather pay a dollar (mortgage interest) to save 28 cents, or pay 28 cents (tax) to keep the dollar?

Does it still sound like a good deal? If so you can send me $100,000 and I will send you $28,000, as soon as your check clears in my bank account.

In the typical scenario, a full dollar is leaving your life on its way to the bank and Uncle Sam is giving you a 28-cent tax break to ease the pain. However, in this scenario, the only thing leaving your life is the 28 cents. You ARE 72 cents ahead on every dollar.

Paying off the mortgage early is better, because 72 cents will always be more than 28 cents.

Postal Rate Increase and "Forever Stamps"

MSNBC is reporting, that the Post office is requesting a 3 cent rate increase, to pay for the rise cost of fuel, insurance, etc etc. The increase in January was required so the post office could place some $3 billion in an escrow account, a step required by congress. The new rate, if approved, would go into affect in May 2007, and would make a first class stamp 42 cents.

each penny increase in the price of a gallon of gasoline costs the post office $8 million

However, there is a twist. The idea for the special stamps, which would be sold at the same price as other first-class stamps, was included in proposals.

“A forever stamp would help ease the transition to any future price adjustments,” board Chairman James C. Miller III said.

The "forever stamp" would help soften the blow of a rate increase by allowing customers to stock up. As originally proposed it would sell for the first class rate and, once purchased, the special stamp would remain valid for whatever the first-class rate is when it is used, regardless of future increases. Customers could even stock up on the stamp in advance of an increase, ending the need for those stupid one and two cent stamps, to get the exact postage.

How Do You Prioritize Your Debt?

FiveCentNickel made some very good points in his post here. That is why I lean more to John Cummuta's teachings over Ramsey's. Don't get me wrong, they both have some great teachings, and both teach to become cash only. Thing is how do you Prioritize your debts. I like FiveCentNickel, believe the higher interest loans should be paid off first. It doesn't matter to me if its the biggest or smallest loan, as soon as it's paid off, the payment is then snowballed over to the next payment.

Total Money Makeover Audio Book

When I woke up this evenig (I work nights, sleeping during the day) I found I had received a package. This package was a 3 CD set of Dave Ramsey's "Total Money Makeover" audio book. It looks like it is going to be an interesting listen. Of course, I have been listening to the John Cummuta series over and over.

What I want even more then this audio book, is Ramsey's Financial Peace University CD Series. Of course, financially, it isn't feasable unless I short one of my other payments. Which, I could do and still be paying more then the minimum.

The benifits, would be soaking in all the advice of as many financial advisors, so that I can pay off my debts as quickly as possible, and pass on the knowledge, I gain from them, as well as my own experiences to all of you.

As soon as I can finish paying off all my loans that I have included in my save-o-meter, in the right hand column, I can begin paying back the IRS and then be 100% debt free. I am hoping for May 2008 to reach that goal.

Save On Utililities

So this morning I was reading through, Larry Burkett's "The World's Easiest Guide To Finances." I found an interesting tidbit, given the rising cost of utilities, that I thought I would share.

Keep your thermostat set at 68-70 dgrees (as MapGirl points out, some even say 65, which I did this past year) in winter (74-78, some even say 80 in the summer). Use blankets and layers of clothing to keep warm and more fans to stay cool.

Close vents in unused rooms

Don't leave the faucet on while brushing your teeth or shaving.

Don't do half loads of laundry. Always fill the machine to capacity.

Just a few simple ideas to help reduce the utility bills around the home.

0% Credit Card Scams

The borrower is slave to the lender.
-Proverbs 22:7 (TNIV)

Below is what John Cummuta says about those Zero Percent Intrest Credit Cards:

If you believe the credit card companies really want to give you something for nothing, I have some beautiful ocean-front property in Kansas that I want to sell you. The only reason credit card companies offer anything is that they've determined it will get them and/or keep them customers, from whom they extract interest or other charges.

Looking at the zero percent intrest myth and using one of the best-known brand name credit cards in the USA as an example. They offer zero percent interest for seversl months, then pops up their "standard" interest rate, currently 13.99%. If you make ONE late payment, that imedit;y jumps tp 19.99%. Cash advances are charged a 20.99% to 22.99% rate, depending on which level of card you hold. There's also a minimum $5 transaction fee for each cash advance, a $15-$35 fee for late payments, and a $29 overlimit fee. So much for zero percent interest!

So you have taken advantage of that 0% offer shell game, get it paid off quickly before they sock you. Also credit card companies are wise, if you think you can jump from one card to another, transfering your balance, they will see that. Once that happens your FICO will plument and you will be socked with higher interest and will no longer receive those 0% offers.

Ramsey vs. Cummuta

In my last post I discussed some things that Dave Ramsey's Financial Peace University DVD brought up. Included was Ramsey's plan to paying off debt and increasing your wealth. Below is a review of those steps, after which I will post John Cummuta's steps.

Dave Ramsey's Baby Steps:
1) $1000 in Savings - unexpected events WILL happen and you need to be able to address them with cash when they do. This is your Emergency Funds, and is not to be touched for anything else. One person that Dave talked about called this fund her GOK Fund. What's GOK? "God Only Knows."

2) Pay Off Debt

3) Debt Free/3-6 months of expenses in bank

4) invest 15% into 401-k or Roth

5) College Savings (529 accounts)

6) Pay off home early


7) invest into mutual funds/real estate

and now the 3 steps, yes only 3, that John Cummuta teaches to transform Debt into Wealth:

Stage 1: Stop Using Credit - Operate 100% on cash
Debt is not a useful tool in building a successful life, credit makes things cost more, so why would you want to use it?
2: Pay off ALL your debts, including Mortgages.
Simultaneously with a cash-based lifestyle, we'll begin eliminating your debts. The first step in that process is the creation of what Cummuta calls your Accelerator Margin (TM). This is an amount of money that will help you accelerate your debt-elimination.

stage 3: Focus All available cash on wealth-building
After your debt is paid off, it's time to start the first step of the wealth building phase. That first step is create an emergency savings fund.

As you can see there are some minor differences. For one Ramsey says to create to emergency fund first where Cummuta says to start that after the debt is paid off. Another difference is that Ramsey separates the mortgage from the rest of the debts and pay that off at later time. While Cummuta says it's all debt so it all needs to be eliminated. I personally like both teachers and am gleaming what I can from both, however, when it comes to debt retirement I am leaning more towards Cummuta, because it makes more sense to get rid of the higher interest then trying earn 2% on a little savings account, while try to lower that debt level. Once, I am debt free, I personally, will be very aggressive to build the savings.

I would love to hear what each of you think.