StopBuyingCrap.com

Well that title couldn’t possibly get any longer.

Here’s a few informative read that I’ve found while cleaning out my bookmarks. Since I hardly give out link-love (because I’m a selfish jerk like that), you know these are interesting reads.

With an endorsement like that, how can you not click-through?

• An Intro to Ethical Consumerism - Sasha talks about being conscious with your spending dollars. Two concepts were mentioned: positive buying in which you support business or organization you believe in, and moral boycott, in which you avoid those that you don’t.
• Know Thy Enemy - Understand the Salespersons Tools - Jim goes over some of the tactics a salesman use to potentially get you to buy things you don’t need or at prices that are hardly favorable. A good read if you’re stepping into a car dealership soon.
• The Case Against Roth 401k - The Finance Buff makes a case against the Roth 401k. Some factors include avoiding high state income tax and not having the option to convert from Roth to traditional. If you’re making a decision on your 401k choices, read this post and the discussion at the Bogleheads forum so you can be better informed.

Lastly, Jim has a timely free eBook for recent graduates: College Grad Money Guide. A very simple five chapter guide on how to get a solid foundation with your money for our recent sheepskin holding peeps.

1. You have too much to do today.
2. You think you can always make more money later.
3. You didn’t know it was important.
4. You think it’s too complicated.
5. You can always pay someone else to worry about it.
6. You’re filthy rich.
7. Your parents are filthy rich.
8. Your significant other is filthy rich.
9. Your parents didn’t seem to care, so why should you?
10. You think you’ll hit the jackpot eventually one day.
11. You just received a large windfall and you’re sure it’ll last forever without problems.
12. You don’t believe money is important (it’s not, but life isn’t free).
13. You didn’t realize retirement is just a few years away.
14. You didn’t think about the fact that you’ll retire one day.
15. Your retirement is decades away, you can always worry about it later.
16. You were brought up to not talk about money openly.
17. You were never taught to care about it.
18. You’re in high school, why should you care?
19. You’re in college, you’re too drunk to care.
20. You just finished college, you’re too busy working (or finding a job) to care.
21. You’re about to propose, there’s too much going on to care.
22. You just got married, now it’s even more complicated to care.
23. You have kids. You’re seriously too busy working and raising your kids to care.
24. You don’t know how to talk about it with your significant other.
25. You’re positive you will always be in good health and always have job prospects.
26. You believe in your income source and job security.
27. You believe that social security will be enough.
28. You believe that your children will take care of you when you retire.
29. You believe that your significant other will always take care of you.
30. You’re just too damn tired to care.

Are there may more reasons? You betcha.

Been putting off starting that retirement account because it seems too complicated?

Call your company’s human resource department and have someone walk you through setting up a 401k. Next, have your personal information ready, visit Fidelity or Vanguard’s website, and open up an IRA today (doesn’t matter which one, just open one). It seriously only takes about 15 minutes to open and fund an account. You can figure out what to invest in later — the important part is taking the first step.

Been putting off talking to your loved ones about your financial worries?

Sit them down and talk. The difficult conversations are always the most important ones. Sure, it may not be easy, but the alternatives can sometimes be much worse. Your parents may lose their house. Complications may lead to divorce. You might have to bail your kids out later. You might have to ask your parents to bail you out. You might have to start all over again — at age 57.

For every reason to not care and to not do anything, there are hundreds more reasons to care and to do something about your personal finance.

After about eight months of paying an additional $20 to T-Mobile for my Blackberry data service, I have decided to remove the plan in an attempt to cut various unneeded expenses.

Paying more than $65 per month for a mobile phone plan was just ridiculous, considering how little friends I have to talk to. As my sister often said to me when I misplace my phone: “Why do you even need to look for it? Everyone that’ll call you is already here with you.”

This decision was made much easier as I had already temporarily removed the data plan during my month abroad earlier this year. By cutting my “Crackberry” addiction of checking emails (I needed my fix of daily joke emails and Viagra spam)… I have found extra time to update my blog, evident by the one post I made in January, the six I wrote in February… etc.

Removing the data service was simple enough, thanks to the rampant days of account services manageable via the web. Easily removing options like these always made me wonder how the company stay in business if they provide a crappy service, but I suppose easily adding on crap can also be a selling point. (On a side note, My T-Mobile needs some seriously fixing. The site is down or non-functional half the time).

One important thing I realized from this episode was that had I not gone without the service while abroad, I would have never noticed the presences of the extra monthly charges. Was it nice to have the Internet at my fingertips, even though it brings me back to the dial-up days? Sure.  But this was one of those “nice to have but not needed” service — something I’ve kept just because it’s there and it was convenient to have.

If I can live without it for a month, I can live without it for years. Until I’ve reached the point where I need constant Internet access (seriously hoping never), I’ll be keeping the data service off my mobile phone plan.

Some Questions to Ask Yourself When Cutting Monthly Expenses:

• Why did I got this in the first place?
• Can I go a month without using it?
• How many times per month do I use it?
• Is there a cheaper (or free) alternative?
• Is this a “nice to have” or a “much needed” service?

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:

• Basic Information on the Stimulus Payments - from the lovely IRS
• Stimulus Rebate Payment Schedule - from Blueprint for Financial Prosperity

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).

I gotta admit that at times I’m quite the moron.

When asked my best friend what she thought of how I handled money, she pointedly told me that I’m “weird with money.”

“Weird? What do you mean weird. Do you mean I waste money?” I asked her.

“No… it’s just that you’re weird with money.” she told me without trying to hurt my feelings. “Sometimes you’ll make a fuss over a few dollars, but when it comes to some big ticket items, you’ll buy it without a second thought.”

Oh great, I’m a cheap ass, I thought to myself.

But that’s not the point my friend was making. Her point was that at times, I can be penny smart but dollar stupid.

Most of you know that there are a handful of decisions in life that’ll make profound financial impact for the rest of your life: your choice of home loan, auto loan, student loan, career path, and when or if you’ll have kids. These decisions can drastically affect the level of income you take home and the amount of income you’ll have left to save and invest for the future.

When you reach the point in your life to make these decisions, careful research and smart decisions can often yield significant savings.

I’ve often joked throughout the blog about stupid minor things such as the rebates that I forgot to mail in, or how $10 flew out of the window… but you should remember that the big impacts to your financial life are the big financial choices, like those mentioned above.

It’s not that I believe actions we take to cut minor expenses are a waste of time or silly to do; frugality in any sorts of level is all peachy with me. But if you spend the time to save on the minor expenses and neglect to do the full due diligence on the big ticket expenses, then you’ll be doing yourself a major disservice — and don’t forget, you’ll also be labeled as being “weird” with money.

Especially when its because of bad cash-flow management.

For those that don’t know, an emergency fund is a stash of moola that you can easily access in the case of emergencies. And by emergencies I mean “Oh crap my car engine blew up” or “Oh crap I just got fired because I kept sleeping on the job.”

How much should you keep in your emergency fund? Well, the answer really depends on your personal financial situation, but the general consensus seems to be between $1,000 to $5,000. Obviously, this number can change significantly for those with a big family, or those that are single with very stable jobs.

For more on emergency fund, you can read this post I wrote awhile back.

As mentioned, due to some major mishap on my arithmetic ability, along with spending like a king on trips and lending money to others (always a bad idea) — I found myself staring at a checking account balance that reminisce my early college years.

Realizing that I couldn’t possibly pay for the month’s credit card balance in full with 28 quarters, I cursed aloud and dipped into my emergency fund of $5,000 (an amount that can take care of my full expenses for about 4 months).

All in all, not a big deal.

But what I soon realized was that I became fairly uncomfortable with the prospect of an emergency fund that’s not fully funded. It’s not as if I was broke or anything, but the fact that my emergency fund was missing $800 made me felt… incredibly insecure, for some strange reason.

As so I’ve learned two things:

1. I have a lower tolerance for financial risk than I realized.
2. When you dip into your emergency fund because you spent more than you thought, you’ll feel pretty stupid.