Buying a House - One Item to Definitely Check

I've written before about the air conditioning situation at our condo, but I just wanted to take a moment to encourage those who are thinking about buying a home to ensure that the air conditioning system is in good working order before you take the step of home-ownership (assuming, of course, that you live in an area that needs air conditioning).

As some background, the person who came and inspected our condo before we purchased it told us that the air from the air conditioner was not as cold as he thought it should be, but that the difference in temperature was almost certainly a low-cost fix (he believed it just needed to be cleaned). He also told us, with a straight face, that he thought there weren't any big issues with the air conditioner, even though he did not go up on the roof to check the unit out.

Nevertheless, in his actual written report (that we didn't read as thoroughly as we should have due to what he had told us in person -- obviously a big, dumb, stupid-headed error) he was a little more severe in his warning about the air conditioning unit, to the extent that the warranty company refuses to make a payment to replace it as, per the inspection, the air conditioning had a pre-existing problem.*

In retrospect, it was a huge mistake on our part to not insist that the inspector check out the roof unit before we signed the paperwork buying the condo. What can I say? In my my younger and more vulnerable years, I was, well, younger and more vulnerable.

The cost of manpower, a new air conditioner unit itself, and (allegedly) the rental of a crane is going to set my wife and I back a "cool" six or seven grand.

Now, I'm not going to say that we wouldn't have purchased the condo had we had a better idea about the issues with the a/c; I just wish that we could have used the knowledge to negotiate a better price with the bank.

For those of you reading, if you've purchased a house, did you make any mistakes like my wife and I did? What advice would you give to first-time homebuyers?

*Other pre-existing problems? The termites and water damage that the inspector missed. Maybe we just had a crummy inspector. I guess that's what we get for doing business with somebody who still has an aol.com email address.**
**In our defense, our realtor recommended the guy.

Craigslist Arbitrage - The Folly of my Youth

Craigslist arbitrage is a popular topic for blog articles recently. As I have just bought and sold something through Craigslist Saturday night, I thought I'd tell my story and jump on the bandwagon.

Like many of you, I love Craigslist. There's gray, there's blue, and it looks like it was designed in about 1996. What's not to love?

Anyways, two months ago, I was looking through the listings, and I came across what I thought was a pretty amazing deal. The listing stated that there were three long boxes of comic books that the owner was selling for $150 total. Long boxes contain between 250 and 350 comics a piece, so the worst case scenario for me was that I would be getting each comic book for twenty cents a piece. I figured somebody, somewhere would be willing to buy them off of me for at least fifty cents a piece, so I thought I could easily make a handsome little profit. I thought, "How can I go wrong?", and I bought the books from a guy in a pickup truck in the parking lot of a Taco Bell.

As you can imagine, the thought "How can I go wrong?" is probably the worst thought a person can think when they are making an investment, which was how I viewed the purchase. I was briefly interested in comics back in junior high, but I'm not exactly a collector, so the main reason I purchased them was not to appreciate them by reading them but to appreciate them by selling the for a high price.

As I started to go through the comics, I realized that most of them were from the 80s and 90s. When I did some research, I realized that most comics from this period aren't worth a whole lot due to two factors:

1) During this period, comic publishers printed a lot more books, and

2) People started taking a lot better care of the comic books that they had.

As such, with an abundance of comic books all in great condition, the comic books that I had bought were basically worthless.

Uh-oh.

Undeterred, I decided to post a handful of the comic books on eBay. None of them sold. I then tried listing them for two cents a piece in an effort to make up my costs in the shipping charges. One comic book sold. I probably would have continued reposting on eBay, but eBay stopped a promotion they had going in which the seller didn't have to pay anything at all if the item didn't sell. It didn't make sense to me to spend money to attempt to sell something that probably wouldn't sell.

So as you can imagine, I was in a bit of a funk. And not in a good way.

So, I decided to go back to Craigslist. First, I started by posting listings trying to sell them one box at time. I started at $100/box. Nobody bought one. Then I moved to $75/box. Nobody bought. I would have gone to $50/box, but my goal in buying them was to make a profit, and I wasn't ready to give up just yet.

As of two weeks ago, these three boxes (as well as two others I had bought in my initial zeal at the moneymaking opportunities in buying and selling comic books) still sat collecting dust in my extra bedroom. As my mother-in-law is coming to visit from North Dakota in September, my beautiful wife beckoned me nearer to her, and whispered faintly and lovingly into my ear, "I'ma cut you if you don't get these comics out of my house."

So, as you can see, the die had been cast, so I decided upon a new method: I was going to put the original three boxes up on Craigslist (I think the other two boxes have some more valuable comics, so I believe they will be worth the time [and potential stabbing that may transpire] by putting them on eBay), and I was going to keep lowering the price every two days until they sold.

I started at $400 (remember, my goal was to make money, so I might as well start high). No dice. I didn't hear anything when I listed them for $375 or $350 either. However, when I listed them at $325, I had two people contact me.

The first person was a jerk, and I think he just wanted to waste my time. He can go sit on a cheese grater.

The second person, however, actually committed to driving an hour to come over to my condo to check them out. Since he was driving that far, I knew that he was fairly interested. When he arrived, he looked through them, and said something along the lines of, "Well, I don't think I have too much use for these."

This is a classic negotiating move. My Craigslist posting had mentioned that I wanted to get rid of them so that I could have the space, so he knew that I wanted to get rid of them, so he knew that I would probably lower the price.

I replied to him, "I'm just trying to get rid of them. Is there any offer you think you could make?"

He said, "How low would you go?"

At this point, in retrospect, I should have said $250, which was how low I had told myself I wanted to go.

However, because I was worried that he really would walk out the door (and because I had been trying unsuccessfully to sell these comic books for the better part of two months), I said, "I could probably go as low as $200."

He too easily agreed to $200 (which is why I should have said $250: his saying he didn't want them was just a ruse).

He paid me, and I helped carry them out to his Escalade.

I think that my biggest lesson learned is that I need to be a better negotiator in person. If I would have said $250, I really think he would have gone for it, and, even if he didn't, I still could have lowered the price again to $200 and ended up in the same place.

Still, I'm happy that I made $50 on what my research had shown were worthless comics. $50 on a $150 investment is a 33% profit, which is none too shabby.

Have any of you ever sold anything through Craigslist, or tried buying something cheaper and then reselling it somewhere else? Let me know in the comments.

Update 09/12/2011:  I am pleased to mention that this post was featured in the Carnival of Personal Finance #326.

An Open Letter to Charmin RE: The Charmin Bears

Dear Charmin,

Advertising is supposed to make me think about your product in a positive way. While I appreciate that you, Charmin, have attempted to bring an air of cuteness to a problem (apparently) facing a large amount of the American people, the idea that you are making me think about dangling detritus left over from digging* out dung is, at least, disheartening, if not deeply disturbing.

Further, this ad series kind of makes me want to hunt the Charmin Bears with a high-powered assault rifle from a helicopter (this being, of course, the American Way).

Please knock it off, and know that I go out of my way not to purchase your product.

Love, Bryan.

*Digging?

Update 09/20/2011:  Slate did an article on how bears came to be associated with toilet paper.  It's an interesting read.

The Premium Paid for Convenience

In the end, it all comes down to our time versus our money. At least it did for me last night.

Last night, I had a hankering for a mixed drink with a name that is unwritable (unlinkable even!) on this PG rated blog. After checking my stash, I realized that I was missing two key ingredients for this Drink That Must Not Be Named (DTMNBN). After discussing dinner plans with my wife, we decided that I would go and pick up food and bring it back home. The only convenient place to purchase the ingredients in the vicinity of the restaurant was a convenience store that I am not fond of, as I believe their prices are high and they charge a fee for debit/credit transactions.

After considering how much time I had available, convenience won out, and I paid a premium for that convenience. While similarly sized portions would have cost, probably, $20 at the grocery store, I ended up paying north of $40 at the convenience store.

That’s gross, right? It cost me twice as much to get items I wanted just because the store was more convenient.* What kind of a personal finance blogger am I anyhow?

As a justification, all I knew is that I had a limited amount of time to get food (it was ordered before I left the house) and stopping at the grocery store would have added an extra ten or fifteen minutes round trip. I didn’t want to spend my time in that manner, so I chose to spend my money to save time. A general set of equations that can be seen from this are:

Time saved = extra money spent, and
Money saved = extra time spent.

As you can see, there is a tradeoff that can easily occur between our time and our money. This was a good reminder to think seriously about overvaluing convenience in our day to day lives. Some other areas that fall under this category are:

ATM Fees—Sure, it may seem like a good idea to take money out from an ATM that isn’t affiliated with your bank (if you need to split a check at a restaurant, for instance), but those $2 or $3 fees add up over time. It’s worth taking the time to get money out from your own bank for free.
Eating Out or Eating Takeout—It can be oh so nice not to have to cook, but you are definitely paying extra for the benefit (to say nothing of the nebulous world of tipping on takeout).
Paying for Parking—I live in San Diego, and anybody can tell you that the parking situation in any big city can get pretty hairy, especially on a weekend night. It can be tedious searching for street parking only to find a spot eight blocks away (if at all), but when the parking garage next door to where you’re trying to get is charging $20 for the night, I’ll gladly talk the walk.
Buying on Impulse—This has happened to all of us: we’re out shopping, and we find something that we can’t live without, and so we buy it without a second thought. A better option would be to either sleep on it to see if we really need the item, or, if we decide that the item is necessary, to spend some time comparison shopping online (where the price will almost certainly be better).

How about you? Are there items in your life that you’ll gladly sacrifice a few extra bucks for because the convenience is worth that much to you? Or, to look at it in the opposite way, in what ways do you consider your money to be more valuable than your time? Let me know in the comments.

*For what it’s worth (zing!), the DTMNBN was delicious.

*Update 9/5/2011:  This post was featured in the Carnival of Personal Finance.*

Borders Rewards Update

I posted before about how, due to their bankruptcy issues, I was too late to take advantage of some of the coupons that Borders book store had given me when I signed up for their Borders Rewards program.

In some happy news, I received an email Sunday night that stated that they were going to give Borders Rewards members an additional 15% off on everything in their stores through Wednesday of this week.

Given that all of the performing arts books are already marked down by 60% (though, heaven knows, they'll probably go down further soon), it looks like I may be expanding my theatre library in the next day or so. I'll have to stop by and see if there are any books that I've been meaning to purchase.

Extreme Mortgage Idea

About a year ago, my wife and I decided to place a bid on a short sale that was happening in the condo complex where we were renting. Our bid ended up being accepted, and we were happy to be paying a mortgage on a place as opposed to renting. After all, many financial advisers in the world seemed to agree that last year was a good time to buy a home as both prices and interest rates were low.

As human beings in a capitalist society are wont to do, a few days ago, I did some research into what the value of my wife and I's investment was. As you may have already guessed, I wasn't pleased with my findings.

According to a search through Chase Bank, condos in our complex that are the same size have recently been selling for about 25% less that what we paid. My wife and I assumed that values had fallen some, but we were not expecting such a dramatic decrease.

Even so, we aren't in such a bad spot financially. The cost of our mortgage (even with HOA fees) is still comparable to what we would have paid if we continued to rent. Further, after the (rightful?) demonization of adjustable rate mortgages (ARMs) following the economic meltdown of 2008-2009, my wife and I have our mortgage at a low fixed rate. Finally, we qualified for the "free" money that the federal government was offering (although me missed out on the California state incentive because the company who dealt with the escrow was staffed by a bunch of jerkoffs who, though nearly every other company filed the paperwork on behalf of their clients, did not file the necessary paperwork for us. I guess you could say that I'm still a little bitter) to first-time home-buyers, so we're not as bad off as we might have been.

On the downside, our air conditioner has gone to that great HVAC retirement plant in the sky, so that adds further costs to the equation.

Still, though things are somewhat bleak as far as our home being a profitable investment goes, they are not nearly as bleak as they are for others. Some of our friends purchased real estate at the height of the bubble, and the bank, after twiddling their thumbs for months as this couple attempted to work something out with them, eventually called back and gave the couple 48 hours to vacate.*

In the midst of all this, various pundits have put forward ideas about how to resolve this issue of record foreclosures, and Suze Orman has a rather extreme idea that I think actually makes a lot of sense. Her idea is, essentially, if a couple buys a house for $400,000, and, after the crash, the home becomes only worth $150,000, instead of foreclosing on the couple and then selling the house for the $150,000 it's worth, the bank should simply refinance the loan to the original couple so that they now owe $150,000. This keeps the bank earning as much as they would likely earn anyway, and it keeps the original couple, you know, having a place to live.

I can see why banks would never go for this; they want to squeeze every last cent out of the couple that they can. However, the bank is going to be out money either way (unless the couple simply continues to make payments on their drastically over-valued mortgage). Why not save everybody time and headache and simply give the couple a (more than) fair shake?

What do you think? Is this idea something that you could see catching on (like Suze's shiny jackets?)? Let me know in the comments.

*This is why when I see the recent news that Bank of America and Citibank's stock prices are going in the toilet, it's difficult for me to feel too badly.

Tipping on Take-Out?

Wordplay!  Zing!

One monetary issue that everybody has to deal with from time to time is the issue of tipping. In general, if I eat in a restaurant, I leave around a 15% tip. There are some that would view this as being a cheapskate (particularly those that have worked in the restaurant business), and I’m fine with that. I’m not here to make everybody happy. In California, where I live, state laws make restaurants pay servers at least minimum wage, so I’m comfortable not habitually tipping more. If I lived in a state where employers are able to pay their servers less than minimum wage (sometimes as little as just over two bucks an hour!), I would probably be a little more generous.

One area where I have a hard time knowing what to tip, however, is in the area of take-out. Tipping expert Steve Dublanica (who writes for a favorite blog of mine, Waiter Rant) believes that take-out orders should automatically receive a 10% tip. This amount is a little hard to swallow (no pun intended).

For me, when I tip, I am paying for the service. As such, I have something of a chip on my shoulder when I go to, say, a sandwich place, pay for my food with my debit card, and then see a line for a tip on the receipt.* While my bleeding-heart thinks that minimum wage is not enough to live on in California, and that I should therefore be more generous, my fiscal conservative brain thinks that a growing entitlement culture is imposing its will upon me. If there is a line for a tip, then what is being implied is that tipping at this restaurant is the norm, and if I do not tip, then I face the scrutinizing and disdainful gaze of the cashier.

So, as you can see, I’m a little torn.

As a quick Google search attests, opinions on tipping differ across the internet. Here are a couple of rules of thumb that I use.

1) I cannot think of a time when I tip a percentage of the total bill on take-out.
2) If I take out food from a restaurant frequently, I may leave a dollar or two.
3) If the restaurant offers curbside take-out (e.g., the server must exit and return to the restaurant multiple times in order to bring the bill and food to me in my car), I usually leave two or three bucks.
4) If the food is preparation intensive (like sushi), I try to leave the chefs a couple of bucks.
5) If it’s a drive-thru, I almost never tip, unless I go there frequently.

How about you? Do you tip for take-out? Am I an oaf for begrudging take-out workers a couple of bucks? Leave me a comment and let me know.

*One restaurant that my wife and I semi-frequently get take-out from is Pei Wei (which is the fast food branch of P.F. Chang’s). I am consistently pleased that Pei Wei does not have a line for tip on the receipt, and so I never feel badly about not leaving one.

2 Easy Ways to Make Money Online

If you've spent any time trying to find legitimate ways to make money online (I'm looking at you with a jaundiced eye, survey sites), you know that it's easier for a camel to fit through the eye of a needle than it is to pull a couple of bucks off of the internet. However, in my own searching, I've come across a couple of sites that do what they say they will.

1) Fiverr.com - On this website, people post both what they're willing to do for five dollars and/or what they would like done for five dollars. One might assume that this sort of situation would devolve pretty quickly into some pretty grotesque, dehumanizing stuff, but my experience with the site has all been on the up and up. Many of the services people are offering to do have something to do with websites, such as designing logos or blog headers, getting traffic to websites, helping with SEO (search engine optimization), and so on. However, people with non-technical talents have their opportunity to post here as well; I've seen people offering to write songs or poems, or create bracelets from baseball seams. I have purchased through the site, and if you end up dealing with a bozo who doesn't do what she says she will, Fiverr will credit your five bucks back to your account (which is not as good as an actual refund, but at least you're not entirely out your money). To make money, you'll have to think up something that you are willing to do for five bucks that there's a market for.

2) Chacha.com - This is a site that I've just come across, and I'm intrigued by it. According to the site:

"ChaCha gives free, real-time answers to any question both online at ChaCha.com and through mobile phones by either texting “ChaCha” (242-242) or using one of our mobile apps. Through our unique “ask-a-smart-friend” format, ChaCha has become the leading answers service with more than a billion questions answered to date all in a fun, conversational format perfect for those in need of fast, free answers while on-the-go."

How do you make money from this? If you (and Chacha) consider yourself to have superior research skills, you can sign up to become a guide, and then you'll be a person to whom such requests will go. From what I've seen, you probably will not make enough to retire off of Chacha, but people can fairly easily make five or six dollars an hour (lower than minimum wage, but easy to do while watching television or browsing around online).


I'm not a hundred percent sure how Chacha makes its money (to me, it seems like a much more inefficient way of doing a Google search), but there are people who use this service, and the site needs people to research the questions.



I'd be interested to hear from you of any other relatively easy ways you've found to make a couple extra bucks online. Has anyone else tried either Chacha or Fiverr?

Reflecting on Military Service

I mentioned last week that I was going to an NFL pre-season game with a couple of buddies. I am unhappy to admit that my Chargers lost the (meaningless) game, but there was another item that I briefly wanted to talk about.

San Diego is a military city, with significant influence from the navy in our harbor and from the marines up north at Camp Pendleton. With the area’s ties to the military, there are frequently “fly-overs” before games, in which a couple of military jets loudly fly over the stadium. The game I went to had the jet fighters fly over, but it also featured another military aspect.

At halftime, a group of young veterans, some younger than I am, made their way to mid-field. These men were being honored as local heroes. All of them had received the purple heart for their service, and nearly every one of them was missing at least one leg. Their wounds were most frequently the result of IED explosions, though at least one man had been mutilated by a suicide bomber and another had been shot.

As we all remember, last week was (at least) an unpredictable week for the stock market. Many of us spent some time considering whether or not our investments were sound, whether and at what point we should consider selling, and how frustrated we were that partisan politics was affecting our retirement plans in a very negative way. Given how the market looks today, it seems those of us who held onto our investments were in the right. Still, last week with the S&P’s downgrade of the U.S.’s credit, there was a very real sense that the sky was falling, and all we Chicken Littles could do was watch it happen.

But as I stood there, watching the soldiers who were willing to give their lives for this country, my irritation melted, and I began to feel ashamed. All last week, I was frustrated at the government and the economy, when these men believed in America enough to put their lives on the line. How blessed am I to have both arms and legs? How blessed am I to even have retirement accounts? How blessed am I to not be in want?

In twenty-first century America, things are tough all over, and prudent spending and saving can go a long ways toward achieving goals that we set out for ourselves. But no amount of money can keep us alive indefinitely, and no amount of planning can entirely save us from the unknown. The only thing we are able to directly control is our own attitudes about what is happening. Seeing the veterans was a good reminder to me that it wouldn’t be the worst thing to be more optimistic in general.

Carnival of Personal Finance #322

I am happy to be featured in the the three hundred twenty-second edition of the Carnival of Personal Finance. There's a lot of other great posts, and I encourage you to check them out.

If this is your first time here at Pinch that Penny!, here are a couple of my more popular posts.

Three Personal Finance Lessons from the Dodgers' Bankruptcy Debacle

4 Ways to Save Money in Las Vegas

How I Asked for (and Received) a Raise

Fun on a Friday

The recent Netflix price hikes made a lot of waves in the personal finance community, as well as among consumers in general. The website Funny or Die! recently posted a video that pokes fun at the sheer umbrage people felt about this issue. Enjoy!

The Thrill of Antici...pation

I have a confession to make: I totally splurged on something I didn’t need the other day.

Two days ago, there was a Facebook deal for tickets to the Chargers pre-season football game that is scheduled for tonight. Seats were $40 a piece (for seats that are usually $80). Being the frugal dude that I am, I immediately x-ed out of the screen and didn’t give the tickets another thought.

Yeah, not really.

Actually, I bought three, knowing I could get a couple of buddies to pitch in (well, one was for a birthday present for a former roommate; it’s something of a tradition for us to buy each other tickets to sporting events for our birthdays).

Still, I didn’t need to go to this game. Pre-season football doesn’t count for anything, and so most of the A-list players will have little to no playing time. So why, then, as a logical, financially-minded person did I buy?

Recent research (from the university where I received my M.A., no less) has suggested that the happiest people are not those who spend money on lots of things, but those who spend their time and money investing in experiences. One of my favorite things to do in the year is to go to a couple of Chargers games, and getting to do so with a couple of good friends that I don’t get to hang out with nearly enough is worth the money to me.

An additional benefit is that I have spent my time since purchasing tickets looking forward to the event. The three of us are all Chargers fans (which eliminates the fun of trash-talking), but there’s still the fun and camaraderie that accompanies the texts and emails that have been exchanged speculating on who will be playing and for how long.

It seems like this has turned into a justification post, which I don’t know that I intended. Still, even the writing of this post has pleasantly increased my anticipation for the event.

How about you? Is the joy of anticipation a consideration when planning purchases?

Amadeus and Economics - Are You Salieri or Mozart?

Last week, I had the opportunity to go see the play Amadeus at the Old Globe Theatre here in San Diego. Many of you are undoubtedly more familiar with the movie version from 1984 which starred F. Murray Abraham as composer Antonio Salieri and Tom Hulce as Wolfgang Amadeus Mozart. Nevertheless, it was originally a play, and its original Broadway cast featured Ian Mckellen (Gandalf!) as Salieri and Tim Curry as Mozart.*

For those of you who may be unfamiliar with the work, Amadeus (fictionally) dramatizes the relationship that composers Salieri and Mozart had. The work dwells quite a bit on Salieri’s jealousy towards Mozart, so much so that Salieri starts out the play by suggesting that he had a hand in the untimely death of Mozart. Much of the dramatic tension focuses on Salieri’s systematic dismantling of Mozart’s opportunities towards composing work and Mozart’s subsequent inability to take care of himself or his family. At the end of the play, Salieri, in comparing his own middling music with Mozart's genius, declares himself the “patron saint of mediocrity,” and this pronouncement seems to play out in the real world as Salieri is largely forgotten while Mozart is certainly within the first few classical composers nearly any person can name.

This leads me to my personal finance point. Salieri is shown in the play spending much time coming up with ways to destroy Mozart, but he is never shown composing music. Contrariwise, Mozart is frequently shown scribbling away in efforts to write his next piece of music which he hopes will provide him with economic stability.

My point is that every dollar that you or I spend is a dollar that cannot be spent somewhere else. This is the basis of much financial writing, such as the Latte Factor (if I buy a coffee drink every day, that’s three bucks that I can’t save for retirement or other life goals).

Similarly, each hour we receive on earth is a gift, and each hour we spend on one task is an hour that we cannot spend on something else. For example, I have stated that one of my goals is to write and submit a play to a playwrighting contest by the end of the year. However, if I spend my hours away from work watching television and not doing any writing, then I’m not achieving my goal because I am choosing to spend my time in a way other than one that is personally fulfilling.

Had Salieri spent more time writing music, and less time hating on poor old Mozart, perhaps he could have been better remembered by posterity.** Instead, if Salieri is remembered at all, it is generally as a fictionalized character in a play.

Each and every hour of our lives is precious, and once these hours are spent, they are gone forever. One key difference between the economics of time and money is that while money can be saved, hours cannot be.

So, how are you spending your time? Are you a Salieri who complains while others forge pathways to their dreams? Or are you a Mozart, who takes what you’ve been given, and uses it in a mighty way?

*What a cast! What a production it must have been! I wish I could have seen it.
**While one might argue that propensity towards a skill is more important than just spending a lot of time on that skill, I’d argue that even all the propensity in the world won’t pay off without putting a butt in a chair and starting to work.

Guest Post: Know the Habits of Frugal People and Incorporate Them

We are excited to have a guest poster today at Pinch that Penny! More information about the author is at the bottom of the post. I think some of the points are arguable, and I'd be interested in any feedback. In the meantime, enjoy!

Being frugal is about controlling your pennies so that you can allow yourself to splurge in the future. If you don’t exercise control over money, soon money will start controlling you. This may sound easy for you, but leading a frugal life is not as easy as you may think it to be. If you avoid frugality, you are sure to land in high interest debt for which you may have to run to the various debt plans that can assist you in getting out of debt. Different debt relief options have different impact on your credit score and therefore it is much better to embrace the frugal life rather than run to professional debt help companies. Have a look at some habits of the most frugal people.

1) Be proactive while controlling your finances: The first habit of all the frugal people is to take responsibility of their own finances so that no one blames them for the financial mistakes that they might make. Make your own financial decisions without taking the opinion of too many people around you. The more you ask people, the more you’ll be confused about the right steps that you must take to bring your personal finances in track.

2) Start off with the end in mind: The people who are successful in achieving their goals will always be able to envisage the end despite the various obstacles that they come across. If you don’t visualize what you want out of something in life, you can never see yourself as a financially fit person in the long run. If you create a budget today, make sure you clearly visualize what you want to achieve through it and the exact amount that you plan to save through that budget.

3) Set your priorities: Frugal people set their priorities and are always sure about the things that they need in a particular month. They can distinguish between their wants and needs and thereby control the decision of spending their bucks on the things that they need rather than on what they want. Ask yourself about the things that are most worthy to you before you take the decision of whipping your plastics for getting them.

4) Synergize and form a team: To synergize is to creatively cooperate with a team so that you can learn more skills on frugality from others. You may work in a team with your friends, family members and exchange the ideas that you’re adopting to lead a frugal life. Surround yourself with frugal people so that you can mutually benefit from each other.

Saving money, following a budget, eating less out, carrying cash instead of credit cards are some other habits that most frugal people follow to stay on the right financial track. You too can follow if you want to lead a debt free life where you don’t require running to professional debt plans for getting financial help.

Author’s Bio: EHM is a regular writer for various finance related Communities including Debt Consolidation Care. She is a PG degree holder in Marketing and Finance and right now working in a reputed bank as a relationship manager.

July 2011 Retirement Status

Well, it's a few days late, but here are my latest retirement figures.*

Overall, I'm not very pleased, and I am fairly confident that nearly anybody is probably not pleased with how their accounts have gone in the last month. I haven't added to either my old 401k or my Roth IRA, and they both have made precipitous drops in the last month (I lost about $2800 in my old 401k, and you know what? It didn't even call me in the morning).

Still, I am happy and blessed to be this far along towards retirement, but I guess one never really loves to get taken along on the whims of the market (at least not when it goes down).

My plan for August is to get another three to four hundred smackers in my Roth while the market is down. I am fairly confident in the mutual funds that I've chosen, so (allegedly) it's just a matter of waiting this dark period out. We'll see if I'm doing any better come next month.

*I thought I'd wait for S&P to downgrade the U.S.'s debt before I posted. It seemed the most equitable.

Linkfest oh-Eleven

Here are a couple of posts that I have enjoyed over the last week.

Flexo writes that Ignoring Bills Won't Make Them Disappear.

Couple Money has an article about inexpensive date ideas.

Budgets Are Sexy had a great article on working as a tutor.

Punch Debt in the Face writes about ways to lose weight cheaply.

Over at The Year of Shopping Detox, there's a post advocating the barter system.

Bad News Bear Market

Nice title, Bryan. Thanks, Bryan.

Anyways, if you have glanced at a television today, you've probably noticed that the Dow is down better than 2 percent today alone.* In fact, over the last week, the stock market has kind of gone into the crapper (I don't want to point any fingers *coughcoughcongress*, but it sure seems like the financial markets aren't happy about the U.S. being on the brink of default earlier this week).

Now, as someone who has just recently started to invest in the Roth IRA, this is vexing news. In fact, that aspect of my retirement portfolio has dropped about 7% in the last week alone (it has dropped a little more for my stocks, and a little less for my mutual funds [God bless 'em!]).

As a note to any politicians who might be reading this site, are you aware of the most important factor in one's reelection? In the immortal words of Bush I, "It's the economy, stupid." Republican or democrat, if the economy's tanking, so also will your reelection bids. While I am jaded enough to question the value of just one vote, I am just unjaded enough to take my irritation with the markets out at the polls.

I'm just saying, maybe it's something to think about before the next time the debt ceiling gets close to the limit.

*Update: as of market close, the Dow was down 4.31%. Awesome.

Does Your Credit Card Make It Difficult?

I am happy to report that for the last several months, I have been paying my credit card off in full every month. However, and maybe I'm a weirdo, but I have a hard time paying a big lump sum of money all at once. For example, if I owe $500, it's easier for me psychologically to make two $200 payments and one $100 payment than it is to make one large payment of $500.

It's unreasonable, I know, particularly when I also know that I have been able to budget for the whole amount due. What can I say? At least I'm paying it all off.

Normally, my smaller payments work swimmingly. I make my smaller payments, my card's balance shrinks, and I finish the balance due off by the end of the month. However, a few minutes ago, I ran into a small snag.

My primary credit card is the Chase Freedom card because I like cash-back rewards combined with no annual fees. I made a small payment on 7/31, and I tried to make a small payment again today, but I received an error message that stated that I was unable to make my payment due to the fact that I had submitted another payment within the last three days.

I can't think of a good reason why Chase would implement this policy, other than they are trying to "catch" people, like me, who make smaller payments. While it's not a big deal for me not to be able to pay today (my billing period end date is 8/26), if I were facing this situation on the last day that payments were due (and thus, facing the prospect of getting charged interest on the balance carried), I'd be pretty upset.

The only logical reason I could give for Chase to implement this policy is that it must cost the banks something to send money to one another. However, Chase is my primary bank, so Chase is denying me the ability to move cash money from one Chase account to another Chase account! It's ridiculous!

Have you ever hit up against credit cards making it difficult to make payments, or otherwise hassling you in an (apparent) attempt to collect fees from you? How did you work it out?

I'm a Day Late and a Dollar Short with Borders

A few months ago, hearing about Borders' slow downfall, I opted to buy into their Borders Rewards program. I figured if I spent a little extra money, maybe that would help the company from shutting down.

We all know how well that worked out.

However, the perks of my paid membership were that I received a certain percentage off of whatever I bought, and I got a coupon book. Probably the best coupon was for a free book (up to a $30 value). Since I only paid $25 for the membership, I thought for sure I would end up slightly ahead in the deal (arguments about the "worth" of books aside).

Flash forward to a few weeks ago when Borders announced it was going bankrupt. Not wanting to lose out on the "perks" that had been granted to me, I rushed to the store for my free book, only to find a sign that read:

"No coupons will be accepted at this time. No exceptions."

Well jab me in the eye with a tuna fish can and call me Susan.* That blows!

In general, though I buy a fair amount of books, I shy away from the membership programs that bookstores like Barnes and Noble and Borders have offered because I don't want to be out the extra $25 right away. Also, and I suppose this is the point, I feel obligated to purchase from that store after I sign up for the membership.

While I couldn't have, at the time, known that Borders would go bankrupt, my buying the membership program with Borders sure ended up like accidentally dropping a piece of toast butter-side down.

Have you ever signed up for some similar program, only to face it being a super-awful idea due to actions outside of your control a little later?

*What?