Weekend Review 28.03.09

So The Great Blog Off has entered its voting week. According to my count, I have one vote. From my brother-in-law. Well, I'm depressed, so let's move on.

On Associated Content, one of my articles was featured! This is terrific news, as it has significantly altered how many views I have gotten on my articles. The last time I posted, I had made about a quarter, and now I have earned over double that, mostly from the one featured article. I guess the lesson here is that it is all about exposure. Not only do I have to write a lot of different articles, I have to ensure that they are of a high enough quality to be worthy of featuring. I also have to start finding and adding my own photos, because the one they chose to add there really, really sucks.

The saving $100 challenge could have come to a close this week, if you have followed all of my posts on the subject. I know that I've saved well over $100 a month using these tips, and you easily can too. I think that I will post an official ending to the $100 challenge sometime next week before month's end, just to wrap things up before I move on to another series next month.

Around the Web in Personal Finance

Get Rich Slowly had a great post about the mentality of oversaving. He talks about how as he moved from spender to saver, he may have crossed a line and gone too far. He discusses the small, but important difference between being frugal, and being cheap.

"But at some point I crossed the line from frugal to cheap. I’ve spent the past few months seeking balance: allowing myself permission to spend on a few indulgences while choosing to cut back in other areas."

He also concludes that oversaving does not lead to happiness, and that as long as our saving goals are being met, feel free to spend the rest wisely in order to enjoy living life.

For small business owners, especially those that are just starting up, check out The Simple Dollar's post on confidence. He begins a discussion on the phrase "fake it 'til you make it", referring to how one must exhue confidence in order to build confidence.

"In other words, fake it ’til you make it is a call to arms to act confident in your endeavors, because that confidence will eventually lead to success. It’s a good example of the power of positive thinking"

I think we all struggle with our skills and talents - even more so when we're trying to set a price on our abilities.

Clever Dude Finance posted an article on ways to save money on transportation at college. That reminded me of all the ways that I saved money while at college, like living in a one bedroom apartment with two other guys. Speaking of college, Pimp Your Finances has a post about crucial questions for twenty somethings. I've thought about a lot of the questions before, but definitely not all, and definitely not all at the same time.

So what did you learn this week? What did you like? What did you miss? Anything you'd like to see more of? Less? Sound off.

Grocery Roundup

I'm looking forward to breakfast on Saturday morning. For me, most breakfasts are eaten alone, in the dark, something quickly poured into a bowl or spread on toast. On Saturday, however, I'm planning on making some bagel egg sandwiches with some hash browns and perhaps a nice bit of fruit on the side. Looking into my fridge and freezer, however, informs me that some shopping needs to be done first.

I was planning on writing up how I save money when I go grocery shopping, but I feel as though that topic has been done to death by many writers far more experienced than I. So here are some of their thoughts on how to save money at the grocery store.

Yahoo! Green suggests forcing yourself to shop on a two week schedule, to ensure that you use up all food without it going to waste before you but more to replace it:

"Raise your hand and repeat after me: "I solemnly swear to consume the remaining portions (if any) of meals I failed to previously consume within 24 hours of my failure to consume them."

Seems a little too regimented for me, but hey, if it works for you... I actually think that my mother did this while I was growing up.

Get Rich Slowly rounds up his favorite ways of saving up to $100/month at the grocery store:

"Buy your produce on sale. Purchase produce that is on sale that week. This is often based on what type of produce is in season. This will not only help your pocketbook, but it will also help you explore new foods and experiment in the kitchen."

My roommate Jeff did this the other day, buying himself some "apple pears", or "perapples" if you will. He did not like them.

Bargaineering has 5 easy ways to cut your grocery bill. The one that would be the favorite of my fiance is:

"2. Use less meat.By weight, meat of any kind is the most expensive part of your meal. You should try to use less of it."

I have to admit, because my fiance is a vegetarian, I've started to eat less meat. I've actually never felt better in my life, physically. I have more energy and I never feel bloated like I do when I eat a lot of meat or pizza. Try having one day meat free every week, it makes a huge difference in your diet - and your budget.

To add to the list, I'll suggest that you buy staples in bulk when they're on sale. Awhile back I found our favorite pasta sauce for $2/can, when it normally is $3.5-4/can. So I bought as many as I could carry home, and I haven't regretted it yet.

Back in May I was spending about $300-350/month on groceries. Now I'm down to a much more reasonable figure, about half of that, which is where I would love for it to stay.

How about you? How do you save money on groceries? Why not try just one of the many examples, and see if you can't help yourself save $100 this month.

Potential savings: $17+ per month. Total savings this month: $100

About Me

As The Great Blog Off enters its final week, I just wanted to give you some insight into who I am, and how I got to be blogging about personal finance on the interwebs. Its not like I woke up one day thinking to myself, "gee, I wonder where I can find the best interest rate in a savings account?"

I believe it all started back in college. At the time, having no income forced me to live in such a way that I could save as much money as possible. I spent four years sharing a one bedroom apartment with at least two other guys, eating a lot of Kraft Dinner, and washing my laundry only when absolutely necessary. Post graduation, I moved to one of the most expensive places in British Columbia - North Vancouver. Along with a 3x increase in monthly rent (while still sharing a one bedroom apartment with a roommate), I also got the highest paying job of my life. I was soon living a much less frugal life, with regular pizza and beer nights, a high definition TV, and a trip to Hawaii. I was making more money in two weeks than I had made the entire year working part time at college.

Six months after it began, it was all over - literally. I was unemployed, and quite broke. All the money that I made was now gone, to video games and a full freezer. Thankfully, I hadn't gotten myself into anymore debt, but suddenly student loans needed repaying, and a wedding was on the horizon.

My television was still getting its regular use, however, and my unemployment was spent watching far too much TLC. One show managed to catch my attention, and I started to watch it on a regular basis. It was called, "Til Debt Do Us Part", and it featured Gail Vaz-Oxlade telling couples who got themselves into a lot of debt how to save their money and their marriage. It intrigued me deeply, and I started getting more and more interested in my own finances. I knew that I was in student loan debt, but I was otherwise okay, as I wasn't racking up credit card or any sort of consumer debt. I wasn't spending more than I was making. However, at the end of every month I would have always spent all of my money, and I didn't know where it was going.

So after I got a new job and started working full time again, I started tracking my spending. Soon I found out that I was spending way more money on things that I shouldn 't be (mostly toys and food), and decided to cut it out. At the same time, I wasn't making as much money I used to be, but I was used to spending a lot more money. I was forced to live more frugally, so I started cutting things out, but I still felt financially stressed.

So I started reading lots of personal finance blogs, learning about how I can save more money. I started enacting some of the things that I was reading about, like setting up an emergency fund, calling my service providers and getting them to reduce my expenses, and automating all my finances. I have started to see a difference, perhaps not in my bank account, but in my attitude. I have found a joy in saving money, and I feel in control. I'm making less money than I was before, and when I get my paycheck I still get worried about all the bills and how I'm going to save for a wedding, but I feel as though I'm headed in the right direction.

I'm excited for the future, because I can see a day where I won't feel financial strain or stress. I can see a day where I can afford to live how I want to live, and feel financial freedom. That day is coming, and I hope that you can come with me as I learn by living.

How to Start An Emergency Fund

Do you want to feel free financially? Do you want to reduce stress on your life, feel more comfortable at the end of the month, or even start to sleep better? All you have to do is start an emergency fund.

What is an Emergency Fund?

An Emergency Fund is a savings account set aside for emergencies. Quite simply, it is a set amount of money that you will not touch unless you absolutely need to. Emergency, in this case, does not mean a sale at Winners, or a new CD that you absolutely must have. It is something more significant, like unexpected car maintenance, sudden unemployment, emergency dental work, etc. An emergency fund is money that you would otherwise have to borrow to deal with the inevitable unexpected expenses of life.

Why Do I Need an Emergency Fund?

Life, as we all know, is full of unexpected surprises. I entered into my last year of college with an old(er) PC that had been sitting around all summer. After we got moved in, I set up my computer, plugged it in, and turned it on. It worked for about 6 minutes, and then "poof". Black screen, smell of burning, no more PC. Whether it was the power supply or the motherboard, I will never know, but I do know that I was suddenly facing 8 months of papers without the ability to type.

A few months later I was driving my then girlfriend now fiance to the Horseshoe Bay Ferry in my sister's little Toyota. The engine decided to leave all of its oil somewhere in between the terminal and exit 4 on the No. 1 Hwy, and suddenly car repairs were a necessity.

Emergency funds allow us to not only pay for those expenses when they do come up, they allow us to relax beforehand, knowing that when they come, we will be okay. After I returned from a vacation in Hawaii, I was facing the rather immediate prospect of unemployment with a very small amount of money in the bank account. An emergency fund would have significantly reduced my stress over the six or seven weeks I went without work.

Isn't that What Credit Cards Are For?

No. Credit cards are necessary evils, but should never be relied upon. For one, anything you put onto your credit card can be charged interest. So if your emergency is costing you $200 and you can't pay it all back within the next 30 days, then you'll be paying $220 for your emergency instead of $200. Twenty bucks not so bad? What if the emergency is $2000, and you have to pay $2400 after interest charges? What if you can't pay it back at all?

In addition, credit card companies enjoy doing mean things to their customers. Like, cutting your credit limit - even below your balance, or canceling your card altogether while you're traveling. What a lot of people forget is that your credit limit is something that is arbitraily decided by your credit card company, and can be changed whenever and however they see fit. Your credit limit does not have a guarantee on it. The bottom line is that you cannot rely on credit to be there when you need it.

How Much Money Do I Need For An Emergency Fund?

If you read personal finance blogs, you'll read advice that ranges anywhere from $1000 to six or nine months worth of monthly expenses. Trent from The Simple Dollar wants an emergency fund that would cover 12 months of expenses. JD from Get Rich Slowly has an emergency fund of $5000, enough for three months of his mortgage payments, or two months of full expenses. The truth is that your emergency fund is a form of risk management, and its size is dependent on how much risk you are comfortable with. Apparently, for the majority of us, we are willing to take a huge amount of risk, because we don't have an emergency fund. I, for one, am not terribly comfortable with that risk, and am therefore starting to save an Emergency Fund bit by bit.

You are the only person that can decide how big your emergency fund can be. Many factors will contribute, including the stability of your income/employment, your monthly expenses, if you have any dependents relying on you, etc. The point of the emergency fund is to reduce your stresses, so save up enough so that you feel comfortable. The article that I first linked to by MSN Money recommends that you save up at least $500. The study referenced suggested that $500 in the bank will improve your life, both financially and mentally. I agree.

How to Start an Emergency Fund

If you've already opened a high interest online savings account, and if you have been following the advice to start saving some money, then you are already set up. All you have to do is create a sub account labeled "Emergency Fund" and start up an Automatic Savings Plan (ASP) to regularly deposit a small amount of money into the account. It doesn't need to be a lot, and it doesn't need to be a full $500 right away. I've been allocating $25 per paycheck to my Emergency Fund, which is currently around $200. It is money that I won't miss because it is gone before I even had the chance to count it, and it gives me an incredible sense of peace because I know that I have a few hundred dollars waiting for me, just in case.

So go ahead, set up your bank account to take a few bucks off each month. If you're worried about your finances, start small, with ten or fifteen dollars. I promise that you won't miss it.

Potential savings: $20+ per month. Total savings this month: $83

A Look Forward

Last week I wrote about the slow start that I was having trying to make money online. I had only earned a few cents, I was frustrated because I wasn't finding enough time to write, and I was becoming worried that my time investments may never pay off. At this point, I am proud to say that I have significantly increased my earnings. I have earned over a quarter! In even more exciting news, one of my articles was featured on the Dating and Relationships category page! I am not sure how being featured is going to affect my pageviews, as AC hasn't updated their stats since Friday. In addition, the PR manager from AC commented on my Weekend Review post, encouraging me to continue writing articles for them. Looks like someone is getting some attention. Laura, from AC, reminded me that while I might not have made very much money so far, "the longer your articles live on AC.com, the more they'll continue to earn for you". This is something called "passive income", something that I would like to continue building upon.

Passive Income

Passive income is money that you are earning without doing anything for it. You put in an initial investment (time, money, etc), and then as time progresses, you continue to earn additional money from that investment. For example, interest earned in your "high" interest online savings account is passive income. In my case, I make the initial investment (time) into an article, and I earn passive income from it for the rest of the time that it is featured on Associated Content. Granted, sometimes certain articles will not make much, or any money, and will with time most likely fade, but there is always going to be a chance that another six people will view that article, and I will earn one more cent.

I used to scoff at this type of income, because it is so minuscule, and it takes forever. What I've begun to learn, however, is that time is on my side. While it might be a small amount of money now, it just may grow into a decent amount of money in a year or two. All it takes is a few minutes writing, something that I've been enjoying doing, and I have set up the potential for some future income.

The Great Blog Off

In other news, The Great Blog Off is entering its final week. I've been enjoying reading these guys blogs, and it has certainly motivated me to blog consistently. I know that I am planning on continuing to blog even after the votes have been tallied, and I hope that they will join me.

For this last full week on blog.alan.schram before The Great Blog Off vote, I will continue to write about how you can save $100 this month. I will also be outlining some of my goals for the blog and for Associated Content as I strive to continue to make money online by writing. New and exciting things are on the horizon, and I hope you join me as I learn by living.

How to Reduce Fixed Expenses in Three Easy Steps

What is a good hourly wage to earn while you are not working? What's your time worth? Need to save some extra money quickly? Want something to put into your online savings account? Then perhaps you should invest a little time and a little effort over the next few days and you could earn yourself anywhere from $20 to $100/hour simply by saving money on your fixed expenses.

Expenses

When we talk about expenses, there are two basic categories. There are fixed expenses, and there are variable expenses. Fixed expenses are the bills that you pay on a monthly basis, bills like your cell phone, your TV, your internet, your electricity, your rent, etc. Variable expenses are expenses that change on a monthly basis due to different circumstances. That would be purchases like food, clothing, or entertainment. So when you are looking into saving money, you should consider cutting both variable and fixed expenses.

Personally, I like cutting fixed expenses, because it offers the highest reward for the least amount of time. You cut one monthly expense, and you can continue to reap the benefit every month thereafter.

How To Easily Reduce Fixed Expenses

There are two main ways to easily reduce fixed expenses. The first is to eliminate everything that you don't need. The question of what you need and don't need is a complicated one, and is something that you have to come to terms with yourself. The second method is relatively simple. You get in contact with the person that is providing you the service you require, and ask them to let you pay less.

This may sound ridiculous, and there are plenty of reasons why the company you are dealing with would never just give you back your money. However, about two weeks ago I called my TV and internet provider, and within 15 minutes I had reduced my bill by $40 a month for the next six months. That's a total savings of $240, for a few minutes of work. But wait! Before you call your provider, you are going to need to be prepared.

Step One: Determine Which Bill You Are Going to Reduce

There are plenty of possibilities here. Almost all of us have some sort of fixed expense that we could use reducing. We might be paying for a mortgage, for rent, for utilities, for phone service, for internet service, for television, for rentals or anything else. Now, narrow down your choices by prioritizing the bills by how much extra you think you are paying and by how easily they might be reduced (mortgage would need to be refinanced, so not so easy). Once you have an idea of which expense you are going to try to save money on, go ahead and get the last copy of your bill.

What I did was head on over to my cable provider's website (I get e-bills). I was actually able to look over the last year of my account with them. It listed all the different charges that I had through the company, as well as the different promotional discounts that I was also eligible for. I found out that I was paying $55/month for internet, and because of a promotion, $19/month for full cable television. The total was about $80/month after taxes.

Fig. 1 - Cable/TV bill post-negotiation

Step Two: Research Alternatives

After I saw how much I was paying for cable, I checked out all my options for internet and television. I looked at Telus's internet packages, and their television promotions. I also looked at Roger's website, but they don't offer what I'm looking for. Finally, I remembered to check out Shaw's bundle pricing, to see if they were offering anything to new subscribers that they weren't offering me. What I found out what that I was already paying a pretty low price, because of the TV promotion that I had signed up for back in the summer. If I kept the same features, I'd be paying at least $80 a month (same price I was already paying), and with Shaw, I would be paying $97 a month!

So am I resigned to continue paying my $80/month bill? No! There are yet other alternatives. Do I need the internet? Do I need television? I found out that I wasn't watching too much of the tele, so perhaps I could eliminate it altogether and save myself $20/month. Do I need the internet? Well, yes, but do I need to pay an extra $10/month for a slightly faster internet? No, I probably don't. So there's $30/month.

If you're looking to do the same, check all the competitors in your area. If you live in British Columbia, in Canada, then check out the following major providers. Be sure to check for local providers, as they tend to offer nice deals that only small providers can.

Internet:
Shaw Cable
Telus
Rogers
Bell

Television:
Shaw Cable
Telus
Bell
Star Choice

Cell Phone Service:
Rogers
Fido
Bell
Telus
Virgin Mobile
Koodo Mobile

There may be more options out there, but that list should get you started.

So you've determined which bill you are going to reduce, you've found your latest copy of your bill, you found out the best deal that you can get, and now you're ready to call your provider.

Step Three: The Phone Call

Before you pick up the phone and dial the number, take a deep breath and remind yourself of a few important principles. First, you are not entitled to a deal, you are asking for one. Act and speak humbly. Two, the person you are talking to is a human being, so treat them as one. They are just doing their job, and if they deny your request, feel free to be persistent, but do not be pushy or arrogant. You can always hang up and try again with another call center representative.

Now, call the number. Your first intention is to get in contact with someone who can get you a deal. Either use the phone tree to direct yourself to "downgrade service", "cancel service" or to a "retention" representative, or just mention that you'd like to eliminate or cancel your service to the first person you speak with. This is because the regular reps will not have the power to change your service, cancel it, or give you a discount. The employees working for retention can.

When you get the right person on the phone, state clearly what you're looking for. I said that I couldn't afford to keep the services that I had, so I was looking to eliminate the television service from my account. I also mentioned that I could get Telus internet for cheaper than Shaw. At this point, the rep got a little upset, and started explaining why Shaw was so much better than Telus. I just calmly explained that cheaper is cheaper, and that I needed to save some money. I also admitted that I did not want to switch services, as I had been with Shaw for awhile and did not want to go through the hassle of switching. So I asked if they could do anything for me to keep my business.

The rep went on hold for a minute, and came back with an offer to keep my TV bill $30 lower than it ought to be for six more months, and to give me an upgrade to a higher speed internet (which I was paying $10/month for) for free. So $40/month savings, total. I gladly accepted, thanked the rep, and called it a day.

15 minutes research, 15 minute phone call, $40/month for 6 months = $240.
"hourly rate" = $480/hour

Think you can do better? Sound off.

More Information

How to Reduce Your Credit Card Interest Rates
How One Guy Reduced His Television Bill By 15%
Television Alternatives
How to Optimize Your Cellphone Bill

Potential savings: $20+ per month. Total savings this month: $63