Monday, May 17, 2021
To celebrate the audiobook release of my self-help, personal finance book, Live Well, Grow Wealth, I'll be sharing excerpts each week on this blog.
This excerpt is from Chapter One, Live Within Your Means, and it discusses how to squeeze the most out of the money you have.
We live in a rich country, and most of us are guilty of waste: wasting food, wasting resources, wasting money. We overbuy, we overpack, and as a result of our wasteful habits, we overspend.
You have probably seen someone use half a roll of paper towels to clean up a small spill, ruin a half-full can of paint by not bothering to put the lid back on, leave good tools outside to rust. Walk through any restaurant and observe how much food is left on customers' plates, ready to be thrown away.
Examine your own life to see if you can cut expenditures by wasting less, by recycling and re-purposing. Do you throw away a tube of toothpaste before squeezing out the last bit? Do you open a bottle of water, take a sip, set it down somewhere and forget about it? Instead of recapping it and putting it back in the refrigerator, do you just pour it down the drain? You could at least water the house plants or rinse a dirty dish with the contents if you're not going to drink the rest of it.
I have neighbors who let their newspapers pile up on the driveway while they're on vacation, and then throw them away when they return. Not only does the collection of newspapers send a signal to potential burglars that the residents aren't home, they are paying for a service they aren't using. With a quick phone call or online request, they could suspend their subscription and have their account credited for the time away, or perhaps have the papers donated to someone who might enjoy reading them.
Print on both sides of a sheet of paper when feasible—and don't waste ink and paper to print out anything unnecessary. I worked with colleagues who printed out every email they received. Why? Learn to trust electronic storage. (But be sure to back up your data regularly.)
Excess copies, documents printed in error or no longer needed, and even junk mail and opened envelopes can be used as scratch paper. No need to ruin a clean sheet of paper to write yourself a note or make a grocery list.
Don't mail anything you can pay online or hand-deliver. I've received Christmas cards, thank-you notes, and invitations from next-door neighbors that were stamped first-class and processed through the Post Office when the person could have walked over and handed it to me or slipped it under my door.
If you use a credit card that offers reward points, periodically check your balance and redeem your points as soon as you’ve earned enough to purchase something you want or need. Don't let the points expire or become devalued by the company's policy changes. And take a moment to compare your redemption options to ensure you're getting the best value.
For example, when I first signed up for a Discover Card, I received a cash rebate once a year which equaled approximately one percent of my qualifying purchases. Now Discover has converted to a point system and added a lot of gift cards and products as redemption options. I still assumed I would prefer to receive the cash, which I usually applied to my current Discover Card bill. But after closer review, I found I needed fifty reward points to redeem fifty dollars in cash (or credit toward my bill). However, I could redeem only forty-five reward points for a fifty-dollar gift certificate at certain restaurants where we dined frequently. As long as I selected a gift certificate I knew I would use in its entirety, I was able to squeeze an extra five dollars from my reward points.
Monday, April 26, 2021
I'm pleased to announce that the audio version of my nonfiction book, Live Well, Grow Wealth, is now available. Jennifer Henry did an excellent job with the narration, so please check it out. To preview or order, click here.
Live Well, Grow Wealth can be described as Personal Finance 101, a commonsense guide to shrinking your financial footprint. Based on my experience of living frugally, investing, and retiring early, I compare achieving financial fitness to maintaining a healthy weight. In ten easy-to-follow steps, Live Well, Grow Wealth shows ordinary people how to build wealth by living within their means without compromising their values.
Here are the ten steps that are discussed in detail in Live Well, Grow Wealth:
1. Live Within Your Means
2. Find the Best Value
3. Get out of Debt
4. Build an Emergency Fund
5. Save for Retirement
6. Begin to Invest (basics)
7. Consider Relationships
8. Teach Your Children
9. Get Completely out of Debt (pay off long-term debt, like a mortgage)
10. Invest More (stocks and covered calls)
Monday, April 19, 2021
In preparation for the release of the audiobook version of Live Well, Grow Wealth, I'll be sharing excerpts each week on this blog.
This excerpt is from Chapter One, Live Within Your Means, and it discusses the pros and cons of various forms of payment.
Many financial consultants will tell you to cut up your credit cards, or to never apply for credit at all. I won't tell you that. I love my three credit cards; they are a secure alternative to carrying a lot of cash. I use them for groceries, gasoline, and even some utilities; I pay by credit card whenever one is accepted without an additional charge for the convenience. The secret is to remit the balance in full every month, on time, so you never pay one penny of interest. For me, a credit card is a convenient form of payment, and a side benefit is that I get to use other people's money for a short while. Additionally, many credit cards offer rewards like frequent flyer mileage, gift cards, or even cash back. If you think of a credit card as a magic plastic wand that enables you to buy something you cannot otherwise afford, perhaps cutting yours up is a good idea.
Those who tell you to cut up your credit cards may counsel you to operate on a cash-only basis, and this works well for some people. The premise is simple: when you run out of cash, you can't spend any more. Personally, I find it harder to keep track of expenditures when I pay in cash. Withdraw twenty dollars from the ATM, and it disappears. At the end of the month, it's just something that went into the "miscellaneous" column. If you are a cash-only person trying to get a handle on where your money is going, be diligent about writing down every expenditure. When you use credit cards, debit cards, and/or checks, you can retrace your steps and account for every outlay. Keep the credit card receipts and make use of your check register so you can reconcile them with your statements each month.
If you pay mainly with cash, keep coins working for you. Many people cast their small change into a drawer, the bottom of a purse, or the floor of a car and do not even bother to pick it up when they drop it. I'm not advocating stopping at the bottom of an escalator or jumping into traffic to retrieve a quarter. But I find it odd that so few people take the time to pick up a "lucky" penny—or nickel or dime. That penny you found on the sidewalk yesterday may come in handy today when your total is $5.01 and it keeps you from breaking a larger bill. The smaller the monetary denominations, the less they matter, and the faster they go. Check your coin purse to see if you can produce exact change for your purchase; cashiers will appreciate it (especially if you can pull it out quickly enough to avoid annoying the customers in line behind you). The longer you hold onto those larger bills, the richer you’ll feel.
Some people save all their change and take it to the bank once they fill a mason jar, treating the proceeds like a windfall. My father saved his change for about thirty years. I collected coins as a child, and he continued the hobby long after I lost interest. He figured the coins would appreciate in value, which was true for the ones issued before the early sixties, when the U.S. mint stopped making them out of silver. When he died, I inherited his collection: a steamer trunk full of jars and jars of pennies, nickels, dimes, quarters, half dollars, and silver dollars. Most of the coins only fetched face value and were more trouble than they were worth to transport and cash in. Some banks even wanted to charge a fee to accept them! Unless you come across a rare issue or a coin older than 1964, spend your change.
Some people claim the best solution is a debit card. It offers the convenience of a credit card, and it’s easier than writing a check. You don’t have to carry a lot of cash, yet you are unable to spend more than you have in your checking account. While you don’t have the same protection as with a credit card, some merchants offer the option to select "credit" instead of "debit" at the time of transaction, which adds some fraud protection. But because the funds are paid immediately from your checking account, it's harder to dispute an incorrect charge, and your financial life can be crippled if a thief steals your card number and PIN, and then wipes out your account (or even overdraws it, incurring additional charges). If you write checks and also use a debit card, be sure to document debit transactions on your check register and keep track of your balance to avoid getting hit with overdraft fees. Also, be vigilant with your statements to ensure there is no unauthorized or forgotten activity.