We have moved!

Update! This site has moved to http://www.countingmypennies.com/. Please update your links if possible and come visit the new site! No new posts will be added to this site - all updates will be done at Counting My Pennies. Thanks for reading!

Friday, February 29, 2008

Dollar a Day - February Update

After two months, my Dollar a Day account currently contains $60.08. $60 in contributions and $.08 in interest income. Just over $60 saved, painlessly, in two months. Sure, it might not seem like much. And putting just $1 away really isn't all that much. But it really adds up quickly.

YNAB - February Update

February was the first full month in which I used the YNAB system. My thoughts so far?

I love it. I don't think I can recommend it enough.

This month, and for the next few months, I have to keep my spending very tight. I have some major expenses coming up, and I need to make sure that I have the money to spend on them. Pre-YNAB, I would have just tried to not spend much money, but not paid too much attention to what I was spending and where it is going. Now, I'm setting budget amounts and making sure I stay within them.

I admit, I do flex my budget. Right now, I'm working on building up a buffer, so when I had to put down a robe deposit for my choir robe, I just reduced my buffer by that amount. But in terms of smaller amounts, I just make my budget work for me. Overspent on eating out? Pull it from the grocery budget. And things like that. I managed to increase my buffer, as well as save a significant portion of money for my upcoming bills and vacation.

I'm still not to the point of living on last month's income, which is what YNAB is built on. I'm close though, and I'm hoping that with the addition of my federal tax refund (which doesn't so much feel like a refund, since it's $300 less than what I owed to the state) and that by keeping March's budget tight, I will be there by April.

I'm very impressed with my ability to keep my grocery budget down. Before, I struggled to keep it under $200. Now that I've been using YNAB, my grocery budget has easily been under $200, and this month, was the lowest it's probably ever been.

Of course, my fridge is empty, so come Saturday, there will be some big grocery spending. But still, I think I can keep it under control. I take a calculator to the grocery store. I pay attention to what I'm spending, and what I should be spending on.

YNAB has been a great resource for me, and if you haven't already, clearly, I recommend you check it out.

Save Money, Make Money

On March 3, iVillage is beginning a 30 day Save Money, Make Money Community Challenge. Click the image above and sign up to receive money-saving ideas by e-mail. It's geared towards women, but I think that we could all benefit from some financial ideas. Even if you are already an incredibly savvy saver, it never hurts to be reminded of the things we ought to do and know.

Thursday, February 28, 2008

The Second Step to Financial Fitness

As I mentioned in an earlier post, a friend recently asked me for advice on getting herself on the right financial path. Obviously, I'm no expert, but I gave her a few simple steps to get her on the right track. I told her the first step was to figure out what she owed.

She came back to me, having written down the details of her debts, and she was understandably overwhelmed. She assured me she was making minimum payments, but now that she knew how much money she owed, she felt the throw all the money she could at her debts. I told her that was a good desire, but there were a few other things she should do first.

I asked her if she was tracking her expenses. She admitted that she really wasn't. She knew that she was saving enough money that she could afford to make her minimum payments, but that was about it. I told her the next step, in my opinion, was to figure out what she was spending every month and where she could cut back. While that $10 lunch didn't seem too expensive, grabbing lunch just once a week meant spending $40! Even cutting back to going out to lunch just every other week would save her $20.

I promised her I wasn't going to insist she cancel her cell phone or never ever go out to eat. In fact, I wasn't planning to tell her anything. I had a feeling that once she totaled up how much money she spent in various categories, she would want to make some changes on her own.

Learning about the Federal Reserve

I just returned to the office after a three day training course here in Washington, D.C. As part of the training course, I had the opportunity to meet Kevin Warsh, a member of the Board of Governors of the Federal Reserve System. We had two journalists as part of the training who agreed to not write about the speeches they heard, so I feel that I shouldn't blog too much about what he had to say, but after hearing him speak, I feel absolutely confident in the Board of Governors and trust that they are doing everything they can for the U.S. Economy. One of the coolest parts about the meeting was that it was held in the boardroom of the Federal Reserve. I was able to sit at the table that the Board meets at to discuss issues regarding the U.S. Economy. Maybe I'm a bit of a political geek, but it was really a cool experience. And also a very cool room.

If you really want to learn more about the Federal Reserve, there is a PDF book available on their website explaining the Purposes & Functions of the Federal Reserve. But here are some basics, taken from that document.

During the late 19th and early 20th century, there were a number of bank failures and bankrupt businesses due to financial panic and people withdrawing funds. After a severe financial crisis in 1907, Congress established the National Monetary Commission and then passed the Federal Reserve Act "to provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes." This was signed into law on December 23, 1913.

The Federal Reserve System is comprised of the Board of Governors in Washington, D.C., and twelve regional Federal Reserve Banks. Federal Reserve Banks are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco. The Federal Reserve uses the federal funds rate to implement monetary policy. This is "the rate at which depository institutions trade balances at the Federal Reserve."

The Federal Reserve has a number of duties, but these can be placed into four general areas, as indicated by the above referenced document.
  1. "Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment,s table prices, and moderate long-term interest rates"
  2. "Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers.
  3. "Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets."
  4. "Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system."

We haven't heard much about the Federal Reserve until recent events in the market, but I'm finding the background on what they do and how they do it absolutely fascinating. The PDF of the book is definitely a worthwhile read.

Sunday, February 24, 2008

Update - Emotions and Finance

Since my entry on Emotions and Finance was included in the Festival of Frugality, I've noticed a number of people linking to it, and I thought I should provide an update.

It's been just over a week, but I'm really working to separate my emotions from my money. I turned down a request from a friend to loan him $20 because I really didn't have $20 to loan, and because I knew he wouldn't pay me back. Now, the situation may have been different if it were some sort of emergency, but he simply wanted me to spot him money for lunch. Instead, I offered him a granola bar. Not quite the same, but I protected my finances, he wasn't upset at all, and I managed to not feel bad about saying no.

As for the semi-uninvited house guest, I let her presence bother me nearly all week. It was really starting to wear on me. I was stressed at work and stressed at home. My co-workers pointed out that by staying with me for two weeks, she should owe me a check for 25% of my rent, 25% of my cable bill, and at least something for groceries. Sure, in terms of rent and cable, she wasn't costing me more, as the bill would have been the same regardless of her presence, but I pay a "premium" to live alone. And they were right. However, while I might have had the "right" to ask her for that money, it felt wrong. I had agreed to let her stay for free, and that wasn't going to change. But we did need to talk about how long she was staying. So we did, and she will be departing soon. She has also started pitching in for groceries.

What surprised me the most? As soon as I finished talking to her about when she was leaving, it felt like a weight was lifted off of my chest. The stress that had been present for days was suddenly gone. I stood up for myself, stood up for my finances, and everything worked out. And best of all, it felt good.

Standing up for myself can be hard. It just seems easier to loan someone the $20 or let them stay for free for weeks on end, even though it might be stressful or something I can't afford. But while "no" might be more difficult to say, it's worth it.

Saturday, February 23, 2008

The First Step to Financial Fitness

A friend recently asked me what she could do to take control of her finances. She didn't bring up numbers, and I wasn't comfortable asking, but I know that she has a good amount of student loan debt as well as credit card debt. It was clear she wasn't entirely sure how much debt she had, nor had she thought about a long term repayment plan.

After thinking a moment, I responded that the first step for her should be to sit down and get the facts. In my opinion, to get a handle on her finances, she needs to figure out what she owes, who she owes it to, and what and when she has to pay.

Simple enough, right? Surprisingly, a number of people in debt have no idea how much debt they truly have. That seems to be especially true with credit card debt. Too many consumers believe that if they pay the minimum amount due on their credit card, that they will be making a dent in the debt. Unfortunately, due to high interest rates, these consumers often aren't even paying the interest they were charged that month. That means their debt is increasing, rather than decreasing.

I realize that for many people reading, this might seem like common sense, but for some of you, this might be surprising news. Either way, if you were like my friend and asked me what you should do to get a handle on your debt, I would tell you the same thing - take a realistic look at what you owe.

More steps in the upcoming days. Stay tuned!

The current state of the market

I used to love to look at my investment accounts online and see what had happened in the previous few days and see how much my investments had increased.

Now, not so much.

The one that bothers me the most, I think, is my Roth IRA. I opened it with a lump sum of $4000 in November. I really picked a bad time to open it, I think, as it has now dropped almost $375. However, there was no way for me to have known that. If I could go back and do it again, I would still do exactly what I did. I knew that it was important to have a Roth IRA, and at 26, I should have probably opened one earlier, but I wasn't educated enough in the world of personal finance to know that. Plus, I had the funds. So it made sense.

I cringe a bit when I see the estimates of retirement funds growing at an average rate of 8%. I suppose that could still happen with my Roth IRA this year. Who knows what's going to happen with the market. Sure, predictions aren't good, but I prefer to look at the world as glass half full. I'm not going to pull my funds out of my Roth, so I might as well hope that the value increases.

Now, the big question is whether I should be investing more in my Roth IRA right now or wait and do the lump sum thing again. I think I'll probably invest in smaller amounts rather than lump sum, but still wait until I have $1000 to invest and then do so, then build up another $1000 and invest. It seems like that might be the way to ride out the market's highs and lows. I might be buying low, I might be buying high, but at least the two will balance each other out. At least, I think that's how this whole investing thing is supposed to work out!

Thursday, February 21, 2008

Groceries and Self-Imposed Rules

I think I might make it through the month sticking to my very strict grocery budget. And that includes spending grocery budget money on a bottle of wine for a party I was invited to! I'm pretty impressed with myself, actually. For months, I struggled to keep my grocery budget under $200, and when 2008 hit, I just said that I wasn't going to try to keep the spending under $200. I was going to keep the spending under $200. Made it last month, and I should make it this month. I've got about $25 left for the month, and technically, I think I could make it through the month without spending any more on groceries. I will want to buy more fresh fruit and veggies.

I've been very good about taking a list to the store, and only buying what's on the list. I stray from the list only if something that I use regularly is on sale, so I stock up a bit. I have also started carrying a calculator with me to the store, so that I have a good idea about how much I'm spending and how that's affecting my budget. It really makes you re-think picking up that $2.50 bag of whatever. And on the other hand, it makes me realize that yes, I can "splurge" and buy that extra bag of Craisins to mix with my oatmeal. It lets me be both frugal and reasonable with my spending.

One thing I do struggle with is all the "rules" that I'm trying to follow while grocery shopping. As has been well documented, eating healthy isn't always cheap. At this time of year in the D.C. area, produce is ridiculously expensive. I can't wait until the Farmer's Market in my area returns (yes, there are other Farmer's Markets in the area, but given the time and cost to get there, it's not really worth it to me to make the trip). I still continue to eat healthy and just let my finances suffer the consequences. And then, there's the idea of staying environmentally friendly. I like to buy organic. I like to buy things with reduced packaging. I even bring my own bags for produce.

All combined, those are a lot of rules to keep for myself, and sometimes it's hard to not go crazy and just buy an expensive, unhealthy, overpackaged, processed frozen meal.

Ok, it's not that hard, because that sort of thing no longer sounds appetizing. But it can be hard to buy healthy, organic, environmentally friendly food that is still budget-friendly. I just remind myself that it's all worth it.


Now that's an attention grabbing title, right?

I was referred by Beachgirl to RevolutionMoneyExchange. It's similar to PayPal, in that it's a way to send and receive money online, but they're trying to add additional perks. It's designed as an easyway to exchange money. Need to pay someone back for dinner? Send them money through MoneyExchange. Your roommate still owes you for this month's rent? Send a request through MoneyExchange. It's all free, too, which is great.

The best part though, is that if you sign up, you get $25 in your account. And if you want, you can immediately withdraw that into your bank account. Or you can use it to try out MoneyExchange, which is what they hope you'll do. Either way, free $25. If you comment here with your e-mail address (I will delete the comment afterwards, if you want), I will send you a referral link. It gets me $10, which I will add to my "charity" account, and it gets you $25. Great deal for all involved, right?

Tuesday, February 19, 2008

Presidents and Prison

Since yesterday was a holiday, I opted not to post and take the day to celebrate the presidents. Or to go running and enjoy the beautiful weather. Either way, that means that today, you get a recap of both the Carnival of Personal Finance and the Festival of Frugality!

This week, The Financial Blogger is hosting the Carnival of Personal Finance, Prison Break Style! My entry about Emotions and Money is included, and following are some of the entries that I enjoyed:

The Festival of Frugality is being hosted by Mighty Bargain Hunter, and in true holiday style, features the U.S. Mint's new dollar coins. My entry on "necessary unnecessaries" is included. Lots of great content here as well, but here are some of my favorites

Sunday, February 17, 2008

Unnecessary expenses that are still worth it

All over the web, you will read stories of how people saved money by cutting certain things out of their lives:
  • Giving up gym memberships in favor of hand weights, running outside, buying home gym equipment, etc
  • Getting rid of a home phone line and only using a cell phone.
  • Giving up cable and only watching network television, or sometimes, just watching movies and dvds
  • Giving up home internet access
  • No longer eating out
  • Buying a nice coffee maker and giving up those morning coffee runs
  • Giving up the Netflix/Blockbuster/Hollywood Video membership and renting movies at the library
All great ideas, and great ways to tighten the budget. But these lists lead me to ponder the things in my life that I don't want to give up. The things that perhaps belong on this list, things that are expensive and not necessities, but things that bring me enough joy to make them worth it.

And I thought about it.

And thought some more.

For me, the one thing that I don't want to give up is my DVR service, and along with that, my whole cable/internet package. I don't watch a ton of television, and often when I do, I'm also checking my e-mail or chatting online with a friend or working on one of the many crochet or knitting projects I always seem to have in progress. But there are a few shows that I try to keep up with, and I absolutely refuse to schedule my life around a tv show.

Sure, I could just buy some VHS tapes and record shows as they come on. But it's so easy to just tell the DVR what to record. And I can tell it once to record every new episode of, say, "Chuck," and it will do just that.

Yes, it's an expense I don't need. But to me, it's worth it. And more importantly, I can afford it. I have budgeted for the expense, and my numbers still work out just fine.

What "unnecessary" expense do you choose to not give up? Is it your gym membership? Your morning coffee runs, a.k.a. escapes from the office? What expense is just worth it to you?

Friday, February 15, 2008

Emotions and Money

Thanks to Oprah, I've been reading Suze Orman's "Women and Money: Owning the Power to Control Your Destiny." I'm a huge fan of Suze's show, and I continually recommend "The Money Book For the Young, Fabulous, and Broke" to all my friends. I've had "Women and Money" on my wishlist for some time now, but have been trying to control my spending, so I decided to wait on this book. Good thing too, since Oprah offered it for free download yesterday. Thank you, Oprah! Maybe I shouldn't complain so much about your show.

I'm only a few chapters in, but I'm quickly realizing just how much this book applies to me. While I feel that I am responsible with my money, I shy away from taking the initiative to actually better my financial situation in many instances.

For example, one of the things Suze mentioned is that many women won't push their bosses for a raise. Even if they find out that they are paid less money than some of their counterparts, they won't fight for what they deserve. Sure, some of us will go to our supervisor and ask, but when the supervisor says "Well, we just can't afford that right now," or "We'll talk about it at your review," we just take that answer at face value and don't do any thing else about it. I do the same thing. When I was hired at my current job, I was promised a specific raise after I've been here a year. There were five of us hired with the same deal. Now, we're hearing that may not be the case. It frustrates me, but at the same time, what am I doing about it? Not a whole lot. I also discovered that I am one of the lowest paid members of my team. I'm also one of the newest, so that's not entirely unexpected, but in terms of education and skills, I do stand out a bit. This should be something else to include in my argument for the promised raise. But again, I just don't bring it up. I've mentioned it once, and then sort of let it get swept under the rug.

Therefore, a goal for the coming weeks is to talk with my supervisor about this situation and find out exactly what is going on and what I can do to prove that I deserve this raise.

I also realize that I am entirely too generous with my money, even when I don't want to be. Right now, I have a friend (who is really more of an acquaintance) staying with me while she job hunts. She doesn't have a timeline for how long she will be staying with me, but I think it could be up to a month (or even more). I don't mind that she's staying in my home. I have an extra bedroom and I am happy to share my space. I don't expect her to pay rent at all.

It is starting to bother me, however, that she isn't really pitching in for groceries. Admittedly, this may be bothering me because this month, I decided to really tighten my budget now that I'm using the YNAB system, and because I do have some larger expenses coming up that I am saving for. After she had been here a few days and hadn't purchased any groceries (and even went with me to the store, watched me buy the groceries to make dinner, and didn't pitch in), I casually asked her how she wanted to deal with groceries, and she said she was going to pick up some things. That's all fine and good, except that she still expects me to provide her dinner, which for me, tends to be the most expensive meal of the day. And even though it grates on me that she expects me to provide for her, I still don't say anything.

Not only is this not great for my financial health, it also isn't good for our relationship. Because of this, I am letting her other habits grate on me as well. Maybe I would be more willing to put up with the fact that she doesn't do dishes or use coasters and gets food on the floor if she were paying her own way.

Or maybe she's just a bad houseguest. Either way, I should say something about the fact that right now, my budget doesn't allow for me to be feeding two people instead of just one. I shouldn't let my emotions play into it. I owe it to myself to be honest about my finances. I think I feel some sort of responsibility to take care of her, as she is a guest in my house, which is something women are all too quick to do, and then we just get taken advantage of. I need to learn to stand up for myself and for my bank account

Thursday, February 14, 2008

Interest rates dropping again?

Today, Ben Bernanke "signaled a readiness to keep on lowering a key interest rate to shore things up." Today's announcement caused stocks to drop in response as well.I'm not sure what I think at this point.

From a personal standpoint, it just means that the interest rates on my savings accounts will drop yet again, and I'm considering dumping some funds into a cd with a decent rate while I still can. I have to admit, I find it a little bit frustrating. But I'd like to think that the people making these decisions are smart and know what they're doing.

Edited to add:
I decided to open another $500 CD with ING Direct at the 3.65% interest rate. Only the 6 month CD is available at this rate. I did this just about a month ago when the rates were over 4%. I'm reluctant to lock up too much of my money for too long (I do have other CDs with a different bank), but I do know that I'm not planning to need this money for another 6 months, so right now, it's what makes the most sense. Sure, it's only $500, so we're only talking a few dollars in interest, but those few dollars add up!

Free Suze Orman Book!

Thanks to Beachgirl's Budget Blog, I just found out that Oprah is giving away free PDF copies of Suze Orman's book "Women and Money." But hurry! The book will only be available until 7:00 CST February 14 (TODAY!). You can download the book here.

Also, there's a new article by Suze on Yahoo Finance.

Wednesday, February 13, 2008

Websites that increase your productivity

There are so many great websites out there that can help you save time and money. I have a number of favorites, including del.icio.us for bookmarks and Google Reader for following feeds, and of course, Blogger for creating this website, but below are some of my more recent finds.

Posted this morning on Wise Bread, I just started using Sandy, a site that bills itself as your free personal e-mail assistant. I'm always looking for a new way to manage my to-do list, and this seems like a great option. I recommend checking the site out for yourself, but the basics are that you send the site an e-mail, and it manages that information for you. It tracks lists and bookmarks, stores information such as addresses and phone numbers, and saves reminders and to-do lists. You can get daily e-mails as well as reminders before an event. For example, I want to remember to update Microsoft Money when I get home tonight, so I asked Sandy to remind me to update MS Money at 8:00. And I will get an e-mail around 7:45 reminding me to perform the update. This seems like an exceptionally useful tool for someone who has regular e-mail access but does not want to surf the web at work or is dealing with blocked websites. You just send an e-mail to Sandy, and the site takes care of the rest. It's a great way to track a grocery list to make sure you don't forget things or buy too much, and it also might be a good way to track when you have to pay your bills.

I recently discovered Netvibes. Netvibes is like an RSS feeder with major bonuses. You can create your own Netvibes page with multiple tabs. On these tabs, you can track your RSS feeds just like any other feed reader, but there are a number of other modules available. For example, my Netvibes start page currently shows me the weather, my Twitter account, Gmail, two del.icio.us accounts, a Facebook feed, and a MSNBC graphic feed tracking the primary elections. I have other tabs for various RSS feeds, broken down by categories, such as "finance" and "entertainment." It's a great way to keep everything in one place without having to check multiple websites.

Trent over at The Simple Dollar (thanks Carrie!) linked to SuperCook earlier this week. SuperCook is a recipe search engine, but the great thing is that you can search based on what you have in your kitchen. I am doing my best to limit my grocery spending, so this is a great website for me. You enter what you have and SuperCook provides recipes based on the food in your house and also suggests things you can make if you just go buy one or two additional things. I used it the other night and made some breaded chicken breasts that were absolutely delicious and easy as well!

This is just a brief list. What are some of your fave sites?

Monday, February 11, 2008

Carnival - V-Day Style

It's Monday morning, and you know what that means. Time for the Carnival of Personal Finance and the Festival of Frugality! My post on credit reports is in this week's Carnival of Personal Finance. Check it out, it's a Valentine's Day edition!

I'm still going through the Carnival, and haven't gotten a chance to look at the Festival yet, but here are some of my favorite posts so far:

Friday, February 8, 2008

YNAB - Mid-month (sort of) update

As I mentioned a few weeks ago, I recently purchased and began using YNAB. I wanted to post a quick update about how my new budgeting system is going.

To recap, my previous method of budgeting was "Put $X into savings at the beginning of the month. Then spend less than what's left because that is spending money." While that worked fine, I found myself in a sad situation mid-January when I had spent nearly all of the funds in my "spending money" account thanks to some once or twice yearly bills that I had forgotten about, plus a bit of overspending in, oh, just about every area. Sure, I didn't have to go into my savings account to pay the bills. But I had very little cushion in my spending account. I make a good living, so that wasn't something that should be happening.

Plus, after reading some accounts from other bloggers, I realized that perhaps being proud of the fact that one month, I finally managed to keep my grocery spending under $200 was a little ridiculous. I'm just feeding myself! I shouldn't be spending $200 a month at the grocery store!

Enter YNAB. I decided to start right away at the end of January and entered all of my information. I couldn't believe how much money I had spent in some of the categories. Over $200 on cosmetics and toiletries? That's ridiculous. Especially when I also spent over $400 on plane tickets (for weddings that I very much want to attend, so the expense was worth it).

I decided to immediately start by working towards Rule 1. In the YNAB system, Rule 1 says that you have to stop living paycheck to paycheck. You should be living on last month's income. That's pretty daunting to think about, so the YNAB system helps out users who don't have that much money sitting in the bank. It teaches you to slowly start putting money away in a "buffer" until you have saved up an entire month's worth of expenses. (Note - not an entire month's income - just an entire month's expenses.)

I could have just done this by pulling money out of my savings account and been sitting pretty to start February with YNAB. That idea didn't sit well with me, so I decided to do it the hard way. I figured out what sort of "excess" I could pull at the end of January, and then started working on my buffer. I won't be there by the end of February, maybe not even by the end of March. But as other YNABers have said, sometimes it can take months to get a full buffer, but it is absolutely worth it.

I set up some budget categories for myself, and so far, I like the concept. I've bought groceries twice this month, and can clearly see how much money is left in my grocery budget. I think I can make it through the month on that. I can see that I've set aside half of the money I will need for the wedding gift I'm giving next month, and half of the money that I will need for the hotel stay. I like that I'm planning ahead.

My ultimate goal is to be able to plan ahead for all of those infrequent expenses, such as insurance payments and car maintenance. A $400 insurance payment is painful when it hits one month. Saving $67 a month for 6 month is much more doable.

I freely admit that I'm a bit of a geek when it comes to spreadsheets. While I have a strong distaste for all things math and numbers related, I love spreadsheets. I think that's part of the reason that I'm enjoying YNAB so much. I enter these numbers and I can see what I'm spending and where I can save and how I can plan ahead.

But even if you're not a spreadsheet person, this budget is a great way to get a handle on your spending and save more money than you thought you could.

Wednesday, February 6, 2008

Credit Reports - Why Haven't You Checked Yours?

Today, a co-worker casually mentioned that in preparation for a new job involving a background check, he got a copy of his credit report and discovered that there was a credit card in his name with an outstanding balance. He knows that he didn't open this card, and is in the process of figuring out what this card is and what he has to do to fix the problem on his credit report.

Practically every time you turn on the television, you see an add for a company offering to provide a "free" credit report. But if you try to sign up for this free credit report, you quickly find that it might be a free report, but by requesting the report, you are signing up for a service, and if you don't cancel, you will be billed for that service.

You can, however, get a free credit report without having to worry about being billed. Under Federal law and the laws of a number of states, U.S. citizens are allowed to request their credit reports once a year for free. You can do this at AnnualCreditReport.com. Through this site, every 12 months, you can request a free credit file disclosure (also known as a credit report) from TransUnion, Experian, and Equifax. Because you can get one report every 12 months from three different providers, that means that you can choose to space them out throughout the year or can order all three at once and compare.

If you are not comfortable ordering online, you can do so by phone or by mail.

I have used this service and was very satisfied. At the end of February, I will be eligible to again request free copies of my credit report and plan to do so.

One thing to note is that this will not provide you with your FICO score. You will be able to review your credit report for any fraudulent activity (and be able to see what sorts of negative activities are reflected that will affect your credit score). It is not necessary to know your credit score, but it can be useful information.

Last summer, I decided I should know my FICO score, so I purchased a report through myFICO.com. I chose the FICO Standard report, which cost me $15.95. With this, I got a copy of my credit report (which I could have gotten free) as well as a copy of my FICO score and an explanation of why my score was as it was. This option also provides you with a FICO Score Simulator, which tells you how your score can change if you do a number of different things.

The site recommends that you check your scores from all three of the reporting companies, but the purpose of this is mainly to check for fraudulent activity - which you can do for free! However, your FICO score can vary, and if you are that eager to know your exact score, then it might be worth it to you to purchase all three reports. Personally, I'm comfortable with not knowing my exact scores, but knowing that my credit report is as good as it can be right now.

If you have never checked your credit report, what's stopping you? It's free and there are no risks, no hidden sign-ups. You just need to know where to go. And now you do.

Tuesday, February 5, 2008

Festival of Frugality - Super Bowl Style

I participated in this week's Festival of Frugality, hosted by BeingFrugal.Net.

Some of my favorite posts are:

The whole list is great though. Check it out!

Saturday, February 2, 2008

Finances and Food

I live alone, and when I get home from work, the last thing I want to do is take the time to cook a meal for myself, especially knowing that I'll have to clean up from all of the cooking. I solve this in one of three ways:
  • Eat a quick fix meal, such as pasta, a sandwich, or when I'm really lazy, a bowl of cereal
  • Eat a frozen meal, such as a Lean Cuisine
  • Cook on the weekends and then freeze and reheat the leftovers.
In recent months, I've been doing the first and the second significantly more than the third. I've decided to do my best to change that. Every weekend, I want to try to cook something and then store the leftovers in the freezer, to be eaten later. The hope is that after a few weeks, I'll end up with a decent selection so I'm not eating the same thing day after day.

One of my sticking points lately has been that I'm trying to reduce my food costs, and when I'm planning to make a big meal, I always feel like I spend so much money. I'm still stocking my kitchen after moving a few months ago, so I always have to buy so many food items that a number of people have already stocked in their pantries.

So today, I decided to experiment. I wanted to make a chicken and veggie stew that I love, and I knew that I didn't have any of the ingredients at all. So off to the store I went. I spent approximately $25 on ingredients. The stew makes 5 generous servings (and healthy too - it's a Weight Watchers recipe). So that's $5 per meal. $5? I can get a Lean Cuisine for cheaper than that, especially when they're on sale for 4 for $10.

But wait. I didn't actually use everything I bought. I bought pre-packaged chicken breasts and maybe used a third of the package. I had to buy spices (I still can't find a good local place to buy them in bulk) and I've got a lot of those left. I used two tablespoons of the container of corn meal. Tons of that left. And I've got garlic left too. So doing some rough estimating, I probably paid less than $2.50 per meal. Just less than what I pay for a Lean Cuisine, and only then if I manage to buy it on sale. And it's a recipe that I absolutely love. Plus, if I want to make the recipe again, because I do have so many of the ingredients left over, I would have to spend around $4.

Clearly, the end result of this experiment is that it is absolutely worth it to cook more often. It's cheaper, it's healthier, and I have to admit, I have some pretty delicious recipes that freeze incredibly well. And if I can't bring myself to cook during the week, I'll just have to set aside time on the weekends or my days off. I'm tempted to cook something else tomorrow so that I have both lunches AND dinners for the week!

Friday, February 1, 2008

January Net Worth Update (-2.0%)

My net worth in January actually ended in a better place than I thought it would, based on some tentative calculations I did mid-month. My net worth dropped a total of 2%. This is mainly due to current market conditions, but I also spent more money this month than I would have liked. Much of that is due to infrequent expenses, such as 6 month insurance bills coming due, and the fact that I had to buy a very overpriced plane ticket, but some of it was just me spending money where perhaps I should have been saving.

Clearly, I can't control the market, but I continue to hope for an upswing, and in the meantime, as I've mentioned, I've decided to really tighten my budget and see if I can save a bit more every month.

One of my 2008 goals involves increasing my net worth by a significant percentage. Clearly, this drop doesn't help, but I remain optimistic. It's just one month. Let's all hope that next month is better.

January $1 Plan Update

Well, this is fairly anti-climactic, but at the end of January, my $1 a day account has reached a grand total of.... $31!

I've done some re-thinking of this plan, and I think what I'm going to do is simply sock away $1 a day all year for a total of $366, and see what kind of interest I can earn. I was initially planning to also calculate savings made by smart spending choices, but well, that turned out to be a very difficult task. So instead, I will save $1 a day all year and show you just how easy it can be to build up a savings account. Next year, perhaps I'll try for $2 a day. And so on.