I must say that I always enjoy Linsey's articles, because they speak to me as a young person who DOESN'T make 200k+ per year.
gtWSE - To be perfectly blunt, your post stinks of the nasty elitism that fuels out increasingly classist society. If you're too financially 'advanced' for this website or Linsey's articles, do us all a favor and opt out.
Linsey - please keep writing, I'm always inspired on how you and your family are successful. The middle class in America is swiftly disappearing. It get scarier and scarier every day for people like my husband and I who are just starting out, and finding that we have to save almost $80,000 in cash just to buy a small home in our city. Some might see these everyday tips and pieces of advice as 'superficial,' but to us, everything counts.
And while I did notice that the $93,000 I quoted for raising a child was only for the housing column of the chart (my bad), the point is still valid that the more you make, the more you will spend. (So I guess you can say that the cost of raising a child is no more than two nice cars in a lifetime... I still take the kid.)
For the most part, I think that the things I have learned about money and finance is pretty common for someone of my cultural background and the time I've been on this Earth. I love learning and I thank God that I've been open to trying new ways to manage money. It can be an uncomfortable thing to admit that you haven't done the best in the past and you need to do better (especially in front of thousands of strangers).
I enjoyed reading the other blog posts, and get the general feeling that everyone has come a long way in advancing their financial futures.
But you seriously didn't think I'd share the intimate details of my retirement plan and my investments, did you? ;)
Great words of wisdom! "Anything worth doing is worth doing well." I think a topic on, "Things not worth doing and the process of evaluating them," would be a good one.
Often we get caught up in routines that govern more of our time than most of us might like to admit. I have entertained the thought of ratifying my routine in ways that would, at least, help me lead a more "worthy" and meaningful life even if it would still be another gripping routine. Yoga every morning, packing a healthy lunch, thirty minutes of cardio, more altruism... (Cliché continues) This is not where I wish to go. However, this is tied into the original idea. Attention and evaluation helps to change old behavior. From this end we could create a new statement, “Anything we do is worth the time to introspect why we do it.”
Great points there and I can relate to the majority of them. One that I would add, which you have gone through as well I'm sure, is the desire to learn and be open to new ideas as you progress on your financial journey. I often talk about Finance 101 topics on my blog and when resarching for the posts it is amazing how much new information I pick up along the way. Just when you think you know it all, you get surprised.
Not to be picky, but 'maiz con hielo' translates to 'corn with ice' not 'corn with milk' which would be 'maiz con leche' (like dulce de leche - sweet milk). Even better for the ice theme.
The table you referred to in your article about the “experts claim that it can cost up to $93,000 per child to raise a kid" shows costs up to quarter of a million dollars per child. The $93k you were talking about was just housing cost per child for the highest income bracket. The grand total is all the way to the far right in the table and tops out at $250,260 for a single parent making more than $39k annually.
So kids do cost a heck of a lot more than a nice car! We're spending $1800 a month just for daycare for two while only $1200 on gas, lease payments and insurance for two nice new cars. And don't tell me that my wife could quit and we'd be ahead because it's not true when you're making close to six figures each.
You write "The balance of my bank account has had little to do with “making it.”" it just simply implies that "I'm still way behind on my retirement funding and I don't care about investing much yet, but hey at least I quit using cash advance places and I no longer lend money to strangers!"
I only need so much advice about not leaving my phone bill in my car (I have e-statements and Quicken so it's not an issue for me).
I would have been a lot more interested in seeing how much your net worth has grown over the past 10 years and where you stand financially. Kind of like freemoneyfinance.com did it this morning.
Your article is superficial and has a "well duh!" feeling as usual......
I can plan my shopping list, cut coupons and watch sales like a hawk. I'll be on my way home, feeling good that I saved 30% on my grocery bill. Then I'll see on my receipt that I was charged an extra $6 for produce or one of my larger coupons didn't scan.
With a 30 minute drive to my grocer, it's not worth the drive back. Even though my savings turned out to be a wash, it's better than being $6 in the hole. Every penny does count, especially because you can only control so many things. Try to take care of what you can, I guess.
Your post also addresses the cost to people who don't work within a traditional "my time is worth X" money system. As a freelancer, I can almost always justify doing something myself, even if it costs time. To the unemployed person (who can't use that extra time saved to earn cash) there is no time/money exchange.
It is doubtless the case that we will see more use of mass transit as gasoline gets even more expensive. But, hello, let's remember that mass transit costs the user money, and that costs of mass transit are going up too (pushed by energy costs, the costs of servicing debt on the enormous investments necessary to start & run a system, etc.). Last night I paid $10.75 to ride a rush-hour commuter train 30 miles. (Yes, there are cheaper times of day, and monthly and weekly tickets are cheaper per ride.) Today, the paper reports that American Airlines is going to charge economy passengers $15 to check a bag (not the second or third bag, any bag). So it's not as if giving up cars is going to get us completely out of the woods.
BTW, I am a big fan of power strips (surge protectors). Plug computer, TV, printer, fax, & perhaps your 2d or 3d phone into one, hit the off switch when you leave the house (or sleep), and watch your power bill go down.
which I think always applies - "look after the pennies, the pounds will take care of themselves." I often get strange looks from people when they see me umming and ahhing over a 12 cent difference in a box of cereal or laundry detergent, but it all adds up. Sometimes to a very nice sum of cash. Nice article Philip.
I disagree with the Netflix one - if you're watching 4 movies a month, and enjoying them, switch to a plan that gives you such the 4 movies (say, the 1 at a time) at a lower cost. I think this works pretty well if you're like me and don't have cable at all. The few movies that do show up on TV are so inundated with commercials, it's nauseating. Skipping out on cable, and Netflix-ing the movies or TV shows I am interested in, is a huge savings in my book. I get to watch what I want to see, on a timetable that's conducive to my schedule, with no late fees or driving to the store, and not being stuck watching some mindless driveling commercial put in place to earn the station even more revenue, because apparently paying for the right to watch their station isn't good enough. TV is quite insidious when you think about it.
Yes, bills are to be paid. I work in billing and pretty much 80% of the calls end with the agent finishing their notes and muttering to themselves 'pay your *#@&#% bill.'
This is an excellent post, Linsey! I particularly liked the last idea that kids aren't any more expensive than a nice car. I hear young people frequently say they can't afford to have kids, and it makes me sad. Children are one of the most wonderful blessings in the world, and I hate to see worthy parents put off receiving that blessing because of money worries. Nine times out of ten you can make ends meet by cutting something else from your life (like a nice car!).
I called up for my coupons on the first day you could, January 2, 2008, and I got them end of February. They will expire next week.
I've been reading diff. reviews and that you will be better to get a converter box that has analog pass through. Some boxes have it and some don't. If you have a box without analog pass through, then you will no longer be able to watch those smaller stations that don't have to switch to digital. You need the analog pass through to watch those stations that will remain analog, such as maybe some of your local smaller stations.
What I do, is when I get the bill I write a check, put it in the envelope and then stamp it.
On the back in the lower right corner of the envelope I write three things.
The amount the check is written for (example: $42.12)
The Bank I'm paying from (I have 4 checking accounts)
And lastly the Date the bill is due (example: 06-17-2008).
I put it by the door. When I go out to check my mail I look though them and take any of them that are close to the due date to the box.
Contracts just the carrier's method of financing the subsidy they place on your phone when you get it at a reduced price.
Do you really think the "free" phone is free? The truth is, the phone might actually be a $200 phone, that they're using to rope you into the contract.
Here's the trick: if you don't want to get into the contract, buy the phone for full price. The carrier may squirm, but you can establish service without a commitment this way, and you can change your plan at any time without penalty (make sure you aren't getting slammed into a contract when you do this!), or even suspend your plan if you aren't going to use it.
And most reputable carriers offer a 30-day money back guarantee so you can get used to your new phone and service without risk.
Nicely done Philip, to get something positive out of the first comment. I always admire people who put themselves out there with their complete name under their comment, umm..."guest."
This is good advice, but my early termination fee happened after I changed the way I used my cell phone. My cell phone had been on a really cheap plan and I carried it with me in case of car emergencies. I rarely used the phone. However, when I had to move and realized I didn't need a home phone and a cell phone, I upped my cell contract so that it could be my only phone. It was only after a few months of this that I realized what a crappy carrier I had. Since I was relying on the cell to be my only method of phone, I couldn't deal with the bad service and switched to a much more reliable carrier for my area. But I did have a hefty early term fee from my original carrier.
If you're not sure if you do or don't want a cell phone and want to try it, I would definitely recommend using a pay-as-you-go first before making a big commitment.
thanks for this great article! when i was researching to start my own small business a year ago, i came across these same points again and again. and though i hoped that i would (miraculously) somehow not face these troubles, my business was the rule, not the exception.
i'm very happy with the way things are now, though.
but i find it strange that entrepreneurs should become 'process-oriented', not results-oriented? that's not what i found. for myself i was results-oriented all the way, and it seemed to pay off.
The point being, you should never go and spend money on unneccessary groceries to get the gas savings. It just ain't worth it. But if you buy groceries regularly, especially if you have a family, dropping $50.00 is nothing. So why not save some money on gas if they'll give it to you?
As far as the actual savings, I agree that if you're saving ten cents/gallon, it adds up to a couple of dollars at most for a fill up. But keep in mind two things: first off, you can combine the coupons. So while one may be only worth ten cents, if you have ten of them, that's ten dollars for a fill-up.
And, secondly, if you were pulling into a gas station and the station across the street was charging ten cents less per gallon, wouldn't you go there instead? Of course you would.
I always thought you drank the cold juice with a straw, then as the ice melted you slurped it up, or as your dentist recommends, let the ice melt in your mouth.
BTW, I chewed ice as a kid and my dentist asked me if I was eating rocks. Go figure.
And wasn't chewing ice associated with sexual frustration? Hmm, makes sense.
Hey Julie, just a minor suggestion on your spreadsheet... the "Original Payment" cell at C7 can take values from the previous entries. It might be helpful for spreadsheet novices so they don't have to manually change the spreadsheet payment formula. I'm using this:
=PMT($C$6/12,$C$5*12,-$C$4,0,0)
Thanks for putting this together! I sat through a mortgage accelerator sales pitch last Saturday (Mortgage Accelerator Plus), and it sounded too good to be true, so in my web research I found your blogs and spreadsheets. Great stuff!
BTW, if anybody is interested, the MAP and MMA, and I'm sure the "supercharge" programs don't perform any magic that I can see. The reality of the MAP program is that if I simply apply an extra $1000 every month to principle, I will pay off my mortgage in a third of the time. But, if I pass that same $1000 through a HELOC and apply my total paycheck to the HELOC and let a software program tell me WHEN to pay extra principal, then things sound much more supernatural, and of course the $1500 fee sounds like a bargain!
Personally, I'm leaning towards your advice of investing my extra cash, with a better return and the flexibility to pull it out if I need it.
I must say that I always enjoy Linsey's articles, because they speak to me as a young person who DOESN'T make 200k+ per year.
gtWSE - To be perfectly blunt, your post stinks of the nasty elitism that fuels out increasingly classist society. If you're too financially 'advanced' for this website or Linsey's articles, do us all a favor and opt out.
Linsey - please keep writing, I'm always inspired on how you and your family are successful. The middle class in America is swiftly disappearing. It get scarier and scarier every day for people like my husband and I who are just starting out, and finding that we have to save almost $80,000 in cash just to buy a small home in our city. Some might see these everyday tips and pieces of advice as 'superficial,' but to us, everything counts.
Best,
~K
And while I did notice that the $93,000 I quoted for raising a child was only for the housing column of the chart (my bad), the point is still valid that the more you make, the more you will spend. (So I guess you can say that the cost of raising a child is no more than two nice cars in a lifetime... I still take the kid.)
For the most part, I think that the things I have learned about money and finance is pretty common for someone of my cultural background and the time I've been on this Earth. I love learning and I thank God that I've been open to trying new ways to manage money. It can be an uncomfortable thing to admit that you haven't done the best in the past and you need to do better (especially in front of thousands of strangers).
I enjoyed reading the other blog posts, and get the general feeling that everyone has come a long way in advancing their financial futures.
But you seriously didn't think I'd share the intimate details of my retirement plan and my investments, did you? ;)
As always, I'm loving the comments!
Great words of wisdom! "Anything worth doing is worth doing well." I think a topic on, "Things not worth doing and the process of evaluating them," would be a good one.
Often we get caught up in routines that govern more of our time than most of us might like to admit. I have entertained the thought of ratifying my routine in ways that would, at least, help me lead a more "worthy" and meaningful life even if it would still be another gripping routine. Yoga every morning, packing a healthy lunch, thirty minutes of cardio, more altruism... (Cliché continues) This is not where I wish to go. However, this is tied into the original idea. Attention and evaluation helps to change old behavior. From this end we could create a new statement, “Anything we do is worth the time to introspect why we do it.”
Thanks for the chance to think!
Great points there and I can relate to the majority of them. One that I would add, which you have gone through as well I'm sure, is the desire to learn and be open to new ideas as you progress on your financial journey. I often talk about Finance 101 topics on my blog and when resarching for the posts it is amazing how much new information I pick up along the way. Just when you think you know it all, you get surprised.
Not to be picky, but 'maiz con hielo' translates to 'corn with ice' not 'corn with milk' which would be 'maiz con leche' (like dulce de leche - sweet milk). Even better for the ice theme.
The table you referred to in your article about the “experts claim that it can cost up to $93,000 per child to raise a kid" shows costs up to quarter of a million dollars per child. The $93k you were talking about was just housing cost per child for the highest income bracket. The grand total is all the way to the far right in the table and tops out at $250,260 for a single parent making more than $39k annually.
So kids do cost a heck of a lot more than a nice car! We're spending $1800 a month just for daycare for two while only $1200 on gas, lease payments and insurance for two nice new cars. And don't tell me that my wife could quit and we'd be ahead because it's not true when you're making close to six figures each.
You write "The balance of my bank account has had little to do with “making it.”" it just simply implies that "I'm still way behind on my retirement funding and I don't care about investing much yet, but hey at least I quit using cash advance places and I no longer lend money to strangers!"
I only need so much advice about not leaving my phone bill in my car (I have e-statements and Quicken so it's not an issue for me).
I would have been a lot more interested in seeing how much your net worth has grown over the past 10 years and where you stand financially. Kind of like freemoneyfinance.com did it this morning.
Your article is superficial and has a "well duh!" feeling as usual......
I can plan my shopping list, cut coupons and watch sales like a hawk. I'll be on my way home, feeling good that I saved 30% on my grocery bill. Then I'll see on my receipt that I was charged an extra $6 for produce or one of my larger coupons didn't scan.
With a 30 minute drive to my grocer, it's not worth the drive back. Even though my savings turned out to be a wash, it's better than being $6 in the hole. Every penny does count, especially because you can only control so many things. Try to take care of what you can, I guess.
Your post also addresses the cost to people who don't work within a traditional "my time is worth X" money system. As a freelancer, I can almost always justify doing something myself, even if it costs time. To the unemployed person (who can't use that extra time saved to earn cash) there is no time/money exchange.
Thanks for the post!
It is doubtless the case that we will see more use of mass transit as gasoline gets even more expensive. But, hello, let's remember that mass transit costs the user money, and that costs of mass transit are going up too (pushed by energy costs, the costs of servicing debt on the enormous investments necessary to start & run a system, etc.). Last night I paid $10.75 to ride a rush-hour commuter train 30 miles. (Yes, there are cheaper times of day, and monthly and weekly tickets are cheaper per ride.) Today, the paper reports that American Airlines is going to charge economy passengers $15 to check a bag (not the second or third bag, any bag). So it's not as if giving up cars is going to get us completely out of the woods.
BTW, I am a big fan of power strips (surge protectors). Plug computer, TV, printer, fax, & perhaps your 2d or 3d phone into one, hit the off switch when you leave the house (or sleep), and watch your power bill go down.
which I think always applies - "look after the pennies, the pounds will take care of themselves." I often get strange looks from people when they see me umming and ahhing over a 12 cent difference in a box of cereal or laundry detergent, but it all adds up. Sometimes to a very nice sum of cash. Nice article Philip.
I disagree with the Netflix one - if you're watching 4 movies a month, and enjoying them, switch to a plan that gives you such the 4 movies (say, the 1 at a time) at a lower cost. I think this works pretty well if you're like me and don't have cable at all. The few movies that do show up on TV are so inundated with commercials, it's nauseating. Skipping out on cable, and Netflix-ing the movies or TV shows I am interested in, is a huge savings in my book. I get to watch what I want to see, on a timetable that's conducive to my schedule, with no late fees or driving to the store, and not being stuck watching some mindless driveling commercial put in place to earn the station even more revenue, because apparently paying for the right to watch their station isn't good enough. TV is quite insidious when you think about it.
Yes, bills are to be paid. I work in billing and pretty much 80% of the calls end with the agent finishing their notes and muttering to themselves 'pay your *#@&#% bill.'
This is an excellent post, Linsey! I particularly liked the last idea that kids aren't any more expensive than a nice car. I hear young people frequently say they can't afford to have kids, and it makes me sad. Children are one of the most wonderful blessings in the world, and I hate to see worthy parents put off receiving that blessing because of money worries. Nine times out of ten you can make ends meet by cutting something else from your life (like a nice car!).
My wood makes liquid.(Different Thread)
I hit someone and left a tiny dent, no scratch. His insurance wants me to pay 14 hundred bucks. I want to try this first.
From Japan.
Thanks for the thread.
I called up for my coupons on the first day you could, January 2, 2008, and I got them end of February. They will expire next week.
I've been reading diff. reviews and that you will be better to get a converter box that has analog pass through. Some boxes have it and some don't. If you have a box without analog pass through, then you will no longer be able to watch those smaller stations that don't have to switch to digital. You need the analog pass through to watch those stations that will remain analog, such as maybe some of your local smaller stations.
What I do, is when I get the bill I write a check, put it in the envelope and then stamp it.
On the back in the lower right corner of the envelope I write three things.
The amount the check is written for (example: $42.12)
The Bank I'm paying from (I have 4 checking accounts)
And lastly the Date the bill is due (example: 06-17-2008).
I put it by the door. When I go out to check my mail I look though them and take any of them that are close to the due date to the box.
Contracts just the carrier's method of financing the subsidy they place on your phone when you get it at a reduced price.
Do you really think the "free" phone is free? The truth is, the phone might actually be a $200 phone, that they're using to rope you into the contract.
Here's the trick: if you don't want to get into the contract, buy the phone for full price. The carrier may squirm, but you can establish service without a commitment this way, and you can change your plan at any time without penalty (make sure you aren't getting slammed into a contract when you do this!), or even suspend your plan if you aren't going to use it.
And most reputable carriers offer a 30-day money back guarantee so you can get used to your new phone and service without risk.
Nicely done Philip, to get something positive out of the first comment. I always admire people who put themselves out there with their complete name under their comment, umm..."guest."
I really do not understand the plan, so only some people will get money depending on their income?
Average price gasoline 1981: $1.38
Adjusted for inflation to 2007: $3.43
Add a few more percent for 2008 inflation.
Source: www.westegg.com/inflation
This is good advice, but my early termination fee happened after I changed the way I used my cell phone. My cell phone had been on a really cheap plan and I carried it with me in case of car emergencies. I rarely used the phone. However, when I had to move and realized I didn't need a home phone and a cell phone, I upped my cell contract so that it could be my only phone. It was only after a few months of this that I realized what a crappy carrier I had. Since I was relying on the cell to be my only method of phone, I couldn't deal with the bad service and switched to a much more reliable carrier for my area. But I did have a hefty early term fee from my original carrier.
If you're not sure if you do or don't want a cell phone and want to try it, I would definitely recommend using a pay-as-you-go first before making a big commitment.
thanks for this great article! when i was researching to start my own small business a year ago, i came across these same points again and again. and though i hoped that i would (miraculously) somehow not face these troubles, my business was the rule, not the exception.
i'm very happy with the way things are now, though.
but i find it strange that entrepreneurs should become 'process-oriented', not results-oriented? that's not what i found. for myself i was results-oriented all the way, and it seemed to pay off.
Just wanted to point out that a container of Edy's Ice Cream has shrunken by a whopping 25%. Does anyone else feel the same pain as me?
And by the way, Phil, I like your beard. Don't shave.
The point being, you should never go and spend money on unneccessary groceries to get the gas savings. It just ain't worth it. But if you buy groceries regularly, especially if you have a family, dropping $50.00 is nothing. So why not save some money on gas if they'll give it to you?
As far as the actual savings, I agree that if you're saving ten cents/gallon, it adds up to a couple of dollars at most for a fill up. But keep in mind two things: first off, you can combine the coupons. So while one may be only worth ten cents, if you have ten of them, that's ten dollars for a fill-up.
And, secondly, if you were pulling into a gas station and the station across the street was charging ten cents less per gallon, wouldn't you go there instead? Of course you would.
I always thought you drank the cold juice with a straw, then as the ice melted you slurped it up, or as your dentist recommends, let the ice melt in your mouth.
BTW, I chewed ice as a kid and my dentist asked me if I was eating rocks. Go figure.
And wasn't chewing ice associated with sexual frustration? Hmm, makes sense.
Hey Julie, just a minor suggestion on your spreadsheet... the "Original Payment" cell at C7 can take values from the previous entries. It might be helpful for spreadsheet novices so they don't have to manually change the spreadsheet payment formula. I'm using this:
=PMT($C$6/12,$C$5*12,-$C$4,0,0)
Thanks for putting this together! I sat through a mortgage accelerator sales pitch last Saturday (Mortgage Accelerator Plus), and it sounded too good to be true, so in my web research I found your blogs and spreadsheets. Great stuff!
BTW, if anybody is interested, the MAP and MMA, and I'm sure the "supercharge" programs don't perform any magic that I can see. The reality of the MAP program is that if I simply apply an extra $1000 every month to principle, I will pay off my mortgage in a third of the time. But, if I pass that same $1000 through a HELOC and apply my total paycheck to the HELOC and let a software program tell me WHEN to pay extra principal, then things sound much more supernatural, and of course the $1500 fee sounds like a bargain!
Personally, I'm leaning towards your advice of investing my extra cash, with a better return and the flexibility to pull it out if I need it.
Thanks again!