Archive for November, 2008

Making dramatic changes

Wednesday, November 12th, 2008

One of my favorite blogs,The Simple Dollar, has an article discussing ways to make dramatic changes in your life by taking it one day at a time. I like these type of posts as they are quite helpful for someone just starting to make those financial changes (e.g. yours truly). He also relates it to diet/weight loss goals, which I’ve mentioned before is similar because both require behavioral changes.

The key points I gleaned from the post were to set realistic goals, track your progress, and focus on a series of small changes rather than a series of sweeping ones. One point I would add is to not dwell on mistakes or falling off the wagon. It’s not possible to go back and change a mistake, so all you can do is focus on how to avoid that mistake in the future, dust yourself off, and get back on the horse. This is one area where weight loss and financial matters diverge behaviorally, as if you overeat the solution isn’t to undereat by that same amount for the next few days (unless you want to gain weight). However, you may need to cut back on spending if you overspend unless you don’t like paying your bills on time. Just saying.

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The Magic Bullet

Monday, November 10th, 2008

I was at a friend’s house the other day when I overheard a commercial playing on the TV in the next room. The voice I heard discussed how to make money selling off things in your attic on ebay. Much of the talk centered on how easy it was to make money by following the steps he outlines. This reminded me of a workout program I saw an infomercial for discussing how you could purchase their plan and achieve a ripped body in 60 days on their program. I’m actually a sucker for the workout ones, as I find them highly entertaining. I do feel that these commercials were deceptive in a way, as they made it appear that their schemes were easy and/or fast; however, I don’t feel that they were necessarily deceptive in a bad way and were definitely a step above a lot of the magic bullet advertising that I see.

In fact, I’d be willing to bet that both of the plans worked if you followed them as advertised. However, one thing not mentioned in either is the amount of work required. In the ebay example, you would need to take the time to clean your storage space, find items to sell, list them on ebay, ship them out, and so on. For the exercise program, if you followed a rigorous workout and diet schedule, you would probably see massive changes in 60 days (in fact, the fine print on the workout infomercial mentioned the program worked in conjunction with their diet plan). Really, what both of them are selling is knowledge and helping you work smarter. You still have to be accountable and provide the “work” portion of the equation.

If there’s a lesson to take from all this, it is that if you watch less TV you will see less advertising of this or any other type, which can only be a good thing. If there’s a second lesson, it is that the programs out there do not have a magic bullet. Either it’s a gimmick that will only cost you money or they’re selling knowledge and that’s it; you’re providing the labor.

If you are accountable to your goals and thus willing to put in the effort, you won’t need a magic bullet. You’ll have already found it.

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Cheap workout ideas

Friday, November 7th, 2008

Exercise is certainly one of my big hobby horses, so I will often go on about various aspects of fitness to the chagrin of those around me.  You’re probably aware of the multitude of benefits that exercise can provide, but I do have some cheap workout ideas in case you are trying to trim fat from your budget or finding a cheap way to get started.

Walking: Chances are, you already know how to do this. Equipment and start up time is minimal, as is the shock to your joints. Adding hills, picking up your pace, or walking for longer amounts of time are some ways to increase intensity. Of course, this may still not be enough if you’re in decent shape already.

Running: The faster you go outdoors, the more inefficient the body becomes as far as energy spent. You want to be inefficient as expending energy while exercising, as this gets you the most metabolic bang for your buck. If you’re able to handle it, try sprint intervals or hill sprints. You’ll likely get the a better workout from 15 minutes of hard sprints than you would from an hour of walking.

Bodyweight exercises: The pushup, pullup, and bodyweight squats are probably your best pillar exercises to focus on. Only the pullup requires any sort of equipment. A door frame pullup bar should do the trick. You can also utilize a local playground’s monkey bars or something similar. There are numerous variations that can be done to increase intensity such as one-armed pushups, single leg squats, and so on. You can also decrease the intensity by doing hangs instead of pullups and pushups from your knees, for instance. I find that 3 sets of 10 on each is always a good starting point.

If you’re just starting out, you should probably get cleared by your physician first and start off slowly. Exercise can save you on medical bills in the long run unless you go and get yourself seriously injured. Try to alternate days of cardio and weight training, but it really comes down to what works best for your body and schedule. I’m sure I’ll revisit the subject enough that you’ll think this is a fitness blog, but just remember to get started.

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5 Memberships worth signing up for

Thursday, November 6th, 2008

I came to an article about 5 memberships to consider in order to save money via Free Money Finance. He offers his take on each of them, and I’ll offer mine as well:

1) Zoos and Aquariums: I’d consider it, as we do have a decent zoo up here. However, this is not a purchase that would save us money, as I don’t spend anything on the zoo currently.

2) AARP: I hope to tell you in a couple of decades.

3) Warehouse Clubs: Buying in bulk is usually a good cost-saving measure, and we have a lot of decent warehouse options. I’m a Costco guy myself, but the who is less important than the savings. My friends and family tend to save on groceries, of course, but also on electronics of all things.

4) AAA: It makes its cost back many times over for us every year, as we like to hit a few conventions and go on one longer vacation every year. The membership also proved quite helpful when our car broke down some years back.

5) Amusement Parks: This is another one that I would put to use if I had it; however, I would end up spending more than I do now on amusement parks since we only go once a year (usually in the previously mentioned longer vacation). Our local amusement parks our sub-par, sadly.

I’m sure there are plenty of other memberships worth considering, but your mileage will vary. Just apply it to your circumstances to determine if it will be worthwhile.

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How to make a spending plan

Thursday, November 6th, 2008

The Wall Street Journal has an article related to creating a budget. I feel that the article is worth a read, as it goes over how to budget in fairly good detail for a newbie. While they don’t explicitly use the term, you should see the basics of creating an emergency fund and how to start budgeting in general. While it may not be as step-by-step as some may prefer, there are a lot of good points that can be taken from the article. I find that the hardest part is always getting started, and there are a lot of good ideas out there on how to do such.

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The key to financial independence

Monday, November 3rd, 2008

It’s not really a secret, but it all comes down to the following: spend less than you earn. Big surprise, no? It does seem quite simple, but with the U.S. being a culture of consumerism and spending beyond your means, I wonder how many people actually know that simple part of the equation. It’s a lesson I’m learning as well, and I honestly don’t see that key point spelled out very often. Perhaps it’s because it seems like it should be obvious, although too many of us didn’t get the memo.

Breaking it down ever so slightly, in order to spend less than I earn, I have two options:

1) Decrease my expenses or
2) Increase my income

Decrease my expenses. Budgeting and frugality is what I would mostly tie into this part of the equation, but I can brainstorm some other factors that could play into this as well. For example, if you take a greater interest in your health by eating right and exercising, you may reduce future medical expenses and perhaps increase your earning power by reducing sick days, for example. If you’re just getting started on this road, find out what you’re spending and cut out some of the fat in your budget from there.

Increase my income. This will include ways to increase passive income (stock investing, interest, etc.) but investment in myself applies as well. Education and self-development are especially relevant here, as investing in yourself will usually pay off with increased earning power. Finishing your degree, developing job skills, or even *ahem* developing a blog as a source of passive income are some examples of ways that you can increase your earning power.

Most of the things I discuss on this site will relate to the these two options, but with an additional emphasis on the self-development that I believe pays off in the long run in the financial game and life in general.

I’ve run a little longer than I intended to, but if you take nothing else from this post, just remember:

Spend less than you earn.

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