Payday Loans

March 2008 Monthly Archive

Nothing stimulating about this poll...

There are three things I can do with my tax rebate check:

  1. Spend it.
  2. Save it.
  3. Invest it.

America’s retailer and the U.S. government wants me to spend it. My parents would probably want me to save it. My future children who’d no doubt be spoil brats like me, will want me to invest it. Being the conformist that I am, I will follow my readers’ advice and buy myself a Wii.

CNN’s current unscientific poll shows that 48% of respondents will pay off their debt, 32% will save it, and only about 20% will immediately stimulate the economy by spending it.

With retailers pulling out all the tricks to get you to spend, including allowing you to cash your tax rebate check at their location, a quick reminder on the sensible things to do shouldn’t hurt.

Three Sensible Ways to Utilize Your Tax Rebate Check:

  1. If you have outstanding credit card debt, the sound thing to do will be to pay off whatever amount you can with your tax rebate check.
  2. If you haven’t set up an emergency fund yet, now would be an incredibly good time to do so.
  3. If you don’t have large interest debt and you have the emergency fund covered, the next logical step would be making the money work for you. Invest the $300, $600, $1,200, or whatever amount Uncle Sam will give you. Throw it into your IRA, give a boost to your target retirement fund; heck, if you really want to be crazy, put it towards your children’s college fund.

P.S. Be alert for advance payment scams and other rebate scams. Avoid the hassles and troubles, deal with the IRS only and you should have little issues.

Related Resources:

So what if I'm wrong about the Wii, the iPod, the iPhone, the...In early 2006, when the 7th generation console from Nintendo went from its codename of “Revolution” to the official name “Wii,” I soundly scoffed at the silly video game console’s name and immediately declared that the Wii will be a hype-only product, quickly forgotten — just like the Apple iPod.

With about 7.8 million units sold in the U.S. as of January 2008, it appears that I’m a tad bit wrong on Wii’s potential downfall (FYI: iPod sales to date ~ 140 million).

“How can you call this a next generation console?” I asked aloud (to no one in particular) back in 2006. “Where’s the 20 core CPU? The steel melting GPU? And what is this crazy wannabe remote controller?”

None of these questions stopped my extended families from purchasing the $250 video game console unit, nor did it stopped me from joining in on the Wii fun during family gatherings.

During one such recent gathering, my younger cousin asked me if I was the one who declared Wii to be lame and “craptastic.” I promptly told him to eat his cookie and shut up.

Kids these days. No respect for their elders.

Crap or not? You can vote below or vote on the top left of the blog (for RSS readers).

Poll Result:

Looks like it's not really crap, sir.

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Every worthwhile thing in life — in my opinion — will not be easy to obtain. As Randy Pausch said, the walls and barriers are there for those who are hungry enough and wanting it bad enough.

I truly believe that I want financial independence bad enough to climb those walls and get through those barriers.

But why?

Is it simply about retiring in comfort? Having enough saved up so that in my advance years, I can hum around in style, store my infinite supplies of Cheetos in my fancy pantry — that happened to came with my nice big suburban house?

Are we all spending less than our means, saving diligently, and investing wisely, just so that we can live in the future without worries?

For me, those are a part of the reason. I would be crazy to choose a life of worry and financial difficulties, especially in my later years of life. Plus, why not? Everyone always tout that basic personal finance values are common sense. Spend less than you earn. Build an emergency fund. Invest wisely.

It’s entirely boring. There’s nothing sexy about the system, but the math works.

Even so, why follow common personal finance adage? Why should any of us pursue financial independence, which as it turns out, is a very subjective thing? Some of us are fine with a house well-stocked with food. Some of us want the yacht, private jet, and houses with 10,000 square ft. ballrooms. Nothing wrong with either goals in my opinion.

I often debate the subject of why within my own head, but as I grew older, the reasons started to become much clearer and much more focused.

Everyday, I wake up and see my mom heading off to work. And although I don’t get to see him often enough, I know that my dad is doing the very same thing, getting up at six in the morning to head off to work. Many of you reading this do the same thing everyday.

Although our reasons may be shaped with different words and different ideas, I believe the underlying goals are the same as my own reasons for wanting financial independence: it is for the love we have for our loved-ones; for their well-being, for their happiness, and for their comfort in life.

One of my mom’s financial goals was to earn enough money to buy a nice little house in Fountain Valley, CA, so that my grandfather can live his later years in comfort. As the years went on, my mother got closer and closer to her goal, but things came to an abrupt halt when my grandfather passed away due to cancer.

I still remember that day clearly…

My family and I gathered around my grandfather’s hospital bed, and as he passed away, my aunt and uncles started to cry aloud their father’s name. My grandmother clung onto the hands of the man she’s been with for the past sixty years, and I stood in the back of the room… wishing my family wouldn’t have to go through this experience.

Despite the untimely death, my family and I were truly blessed. Tens of thousands of others pass away each day without the surrounding comfort of their family and the care of a modern medical facility.

At the end, all of us being there that day was the founding reason why I wanted to achieve financial independence — to also be surrounded by family and loved ones during some of my final moments in life.

To feel their warmth, look upon them, and know that they will be taken care of. To be comforted by the thought that they will continue to be happy, be well-supported, and be able to somehow contribute to the improvement of this crazy round ball we all live on.

And of course, to be able to smile and ask them, “Did I ever told you guys about this silly, stupid blog I had on the World Wide Web…?”

Freaking dineros!

I am not a cash person.

If I have cash in my wallet, they disappear within days.

Which is awfully strange because having no life, I hardly step out of my dungeon… so perhaps my family steals from me (kidding).

It seems there are two types of people in this situation. Those that spend easily when they use cash, and those that spend easily when they use credit. I am the unfortunate former.

You would think that having cold hard cash will deter the unplanned Cap n’ Crunch buying, but alas… I am but a weak man. For whatever reason, cash-on-hand feels like spare change for me (I suppose it would be different if I carry hundred dollar bills).

On the other hand, having my credit cards with ludicrous credit limit in my wallet does not make me spend recklessly. I have friends that swipe away without a second thought — only to do the usual moaning and groaning at the end of the month — but when it comes to cash, they spend much more carefully.

My cash and credit mentality is most likely due to the fact that I got into debt via credit. Hopefully one day I can kick the habit and spend with much more discretion, regardless if the instrument is cash or whatever else.

Having said that, I suppose there’s really three types of people, the last one being those that can spend carefully regardless if it’s cash or credit.

I hate you people.

Tips on Spending Wisely with Credit Cards:

  • Carry only one card unless you are a master rewards card juggler.
  • Apply for online access and make a habit of checking balances regularly. This way you can see the full effect of your spending clearly.
  • If you have issues with spending, make yourself a credit card slip cover that can act as a reminder. Write the questions below for added emphasis.
  • Ask yourself these questions before using your credit card:
    • Do I really need this?
    • Can I afford this at the end of the month?
    • Will I be glad I bought this a year from now?

Tips on Spending Wisely with Cash:

  • Carry a bill amount that’s harder to break, such as $50. A helpful barrier to prevent you from spending on little things.
  • Set and carry only fixed dollar amount weekly and deposit any weekly excess in jar. When you need more, withdrawal only from cash jar. Deposit cash jar back into banking account after few months. Rinse and repeat.

Tips on cash above are comment suggestions in an old post from readers, Jack and Independent George (thanks guys).