Archive for the ‘Personal Finance’ Category

Hidden Benefit of Financial Security

Money Tree

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

Living in the Northeast, as I do, heating my home is a significant annual expense.  Since, I have been living on my own, I have used the three main types energy, gas, electric and oil.  It has been difficult to compare the costs between the different types as the sizes of my homes or apartments have varied.  The cheapest by far was when the heat was included in the rent, but I can’t seem to get my mortgage company to cover that now.  I bring this up because it’s time to renew my oil contract for the winter.  I have several options that I can choose from and I am actually making a change from last year.  In case you have to go through a similar exercise, I’ll take you through my thought process.

The Plans

The first option is simply to have the oil company automatically deliver and charge whatever the spot price of oil is for that day.  I went this route my first winter in the house.  Having never had oil heat before, I was unsure of what to expect.  The biggest downside to this program is the spot price.  When you need the heating oil the most is when the price will be the highest, supply and demand. 

The second option available to me was a contract where there is a price ceiling.  This contract would allow the price to drop if the market rate dropped, but came with a $100 fee.  When I calculated costs, I figured the price would never drop low enough, long enough for me to recapture the $100 fee.  Again, the likelihood of the price dropping in the winter when demand is high is pretty low.  I have never used this option. 

The third option is a straight fixed price with a $50 fee.  Essentially, I reserve a set amount of gallons at a fixed price and pay when it is delivered.  This is the option that I have used for the past couple of years.  The benefits are twofold; first I know that my price is locked in, so that no matter how cold the winter is, my price doesn’t change.  The second benefit is there isn’t a large upfront cost, as I pay as the oil is delivered.  The last option available to me is similar to the fixed price, but with a few main differences.  The first is there is no fee, the second is you pay upfront and the third is the cost per gallon is $0.10 per gallon lower.

My Choice

As you might have guessed, I am going with the last option.  Reserving and paying for my oil ahead of time.  I’m buying 800 gallons, at $3.699 per gallon, which is my historical average usage over the winter.  By going with this plan, I will be saving about $130 over the plan that I used last year.  The money isn’t substantial savings, but it is certainly more than I would be earning in interest.  At best, I might be earning about $20 in interest.  A couple of years ago, I couldn’t even make this choice.  I didn’t have enough money in savings to cover that amount.  Now, I can use the money I have to save money.


The savings has allowed me to choose the best financial option.  It’s also what I do with my auto insurance.  I pay that in full every year to take advantage of a lower price.  Rather than pay a fee ranging between $2 and $5 a payment, I pay it all off in one shot.  As my financial position becomes more secure, I keep finding benefits that I never contemplated before.

Our Life Insurance Plan

Life Insurance

As I have mentioned before, Mr. BFS and I purchased a 10 year term life insurance policy for each of us after we decided to both go self-employed.  The reasoning was that we’d save enough in 10 years to be self-insured by the end of the policies.  Or in the unlikely event that we decided to have a child, we would want to revisit the policies anyway.

Our Current Plan

Our current life insurance policies cost us $27 total per month.  It’s $12 for me and $15 for Mr. BFS.  There is that reminder that guys tend to pass on faster.  Odd.

Anyway, the policies are for $250,000 each in case of accidental death.  It seems to only cover $37,500 each if we die from natural causes.  Even though I didn’t exactly realize this little point before, this sort of coverage suits us right now since $37,500 would cover our funeral costs and $250,000 would cover the funeral and could even pay off our current mortgage.  Or one of us could live off of $250,000 (or what’s left after the government takes its cut) for at least 2.5 years even if we completely stopped working.

Contemplating Our Options

As we get a little older, I realize that we may need to look into our options like HBF’s life insurance plans.  If we decide to have a kid, we’ll need to raise our coverage.  I’d want to make sure the surviving spouse has enough to live on with our kid for 2 years without working AND have at least a little to cover some of the larger kid expenses that will pop up like braces, a used car when they learn to drive, and even a little help with college.

If decide to stay kid-free, we still only have 7-8 years left of this plan.  We’re probably not going to be so well off to be self-insured as I thought, although we do keep healthy savings just in case.  I think another 10 year policy for each of us could do the trick though.

What do you think?  Is a $250,000 term life policy enough in your world?  What are you comfortable with?

Car Trouble

Money Tree

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

It is not a good sign for the age of your car, when asked how many miles are currently on it and after you respond you get a “Wow”.  Yes, my car is getting up there in years.  I drive a 2001 vehicle with over 155,000 miles on it.  The trouble is I am not quite ready to get rid of it yet.  It is not because I am sentimental or anything.  Replacing my car just does not fit into my financial plan.  If you have learned anything about me and my finances, it is that I always have a plan.

Just an Oil Change

I took my car in recently for a routine oil change.  With a car this old, things are rarely routine.  Turns out, the spring that helps to hold the hood down had broken.  This repair was completely minor, only about $50.  However, the service department also noticed that my break and fuel lines are showing signs of corrosion.  At some point in the not too distant future, they are going to need to be replaced.  The bill for that repair is going to be in the $1,600 range.  The question will be, do I replace the parts and bite the bullet on $1,600?  Or, do I get replace the car for a new one?

My Plan

If my car cooperates, I hope to have it around for another 3 years or so.  You see, I only really want one car payment at a time.  I know I really should not have any car payments.  It’s rarely good to owe money.  My goal years ago was to eventually save enough money and pay cash for a car.  Then pay a car payment to myself for the next car.  Life has a way of changing your plans.  I have finally accepted that while this is a great goal, it is one that I am probably not achieving.  Paying cash for a car is not a high enough priority to siphon money away from some of my other goals.  The way I am thinking, is that we will drive a car for 10-12 years and then replace it.  My wife’s car has about 3 years left on its loan; mine of course is paid off.  So, I need my car to hang on for just a bit longer, without costing me a fortune.

The Math

If I had to replace my car today, I would likely end up with a car payment in the $200 range.  Let’s say $250, to make the math easier.  That means in one year, I would be paying $3,000 in car payments.  The $1,600 car repair does not look quite as bad now.  The trouble is I don’t know if the $1,600 repair is the only thing that my car will need.  I hope it is; it’s running well.  In 3 years, my car payments would total $9,000.  I seriously doubt that I will face $9,000 worth of repairs.  I could possibly see a couple of tires and maybe breaks, totaling about another $1,000.  It is still less than the car payments.

Old, But Reliable

My car has had its share of repairs, but nothing that I would classify as unusual.  This next one is simply due to old age.  Hopefully, I won’t have to have the repair done for a little while.  If I can hold off on the repair until the beginning of next year, I can set aside money from my annual bonus to cover the cost.  If not, then that is the purpose of the emergency fund.  I could reduce some savings amounts if push came to shove, but those savings amounts are higher priorities than a car.  So, I will keep my fingers crossed and hope my car decides to hang on just a little bit longer.

I Gave Myself a Raise

Money Tree

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

I recently gave myself a raise, not my salary at work, though that would be nice, but my allowance.  As I have mentioned before, my wife and I each receive monthly allowances.  This helps us to stay on budget, as wants are paid for via allowance money for the most part and needs come from the household budget.  I have been finding recently that my allowance is too small.  In the past, I have managed to get by with a much smaller allowance than my wife.  That ability to get by has been under pressure for the last year or so as my wants have started to increase.

Increasing Wants

The biggest expense that has come up, is I am trying to surprise why wife with a second-honeymoon in a few years.  Don’t worry; she won’t see this post, so I haven’t spoiled the surprise.  It will be our 15-year wedding anniversary, as well as, her 40th birthday that year.  I’d like to surprise her with the trip.  I am estimating the cost of the trip at around $6,000.  I figure I can cover that cost between a combination of savings from my allowance and tax refunds.  I can’t dip into the normal household budget or she would know. 

My goal is for me to save roughly half the cost from my allowance and the remaining from the refunds.  My portion comes to about $600 a year or $50 a month.  The second biggest expense that has been coming up has been running shoes.  I have been running a lot more recently and thus shortening the life-span of my shoes.  The shoes are just over $100 a pair.  I had been getting away with buying only 1 pair a year, but with training for a marathon, this year I will need 3 pairs.  Even with just those two things, my allowance would be insufficient, but I also have been wanting more recently.  That could be due to more financial stability for the household in general.  We are probably in the best financial shape that we have ever been in.  Since the cost of my wants is going up, I needed to find a way to pay for them.

Increasing Pay

How can I give myself a raise, if my salary hasn’t increased?  The first was to pick up a small side hustle, staff writing.  My wife and I agreed that any money earned outside of my salary belongs to that person.  So, my side hustle doesn’t have to be shared with the household. 

I next examined my credit card.  As part of our allowance strategy, both my wife and I are allowed to have our own credit cards.  This helps tremendously with managing the household finances as everything is separate.  The only requirement for the credit card is that you cannot carry a balance.  I had a 1% cashback card, but since I wasn’t spending a lot, I wasn’t getting a lot.  A few months ago, I developed a new strategy. 

I now have two cards, one from Bank of America, the other from Discover.  The Bank of America card gives me $30 every quarter if I have paid more than the minimum on my bill every month.  That’s $120 a year for doing what I would do anyway.  As a comparison, I’d have to spend $12,000 at 1% to earn that as cashback.  My allowance isn’t that large.  What I’ve done is take one recurring charge on our normal household card and switch it to this card.  It’s paid in full very month and it’s above the statement minimum payment.  The Discover card is their It card.  It has 1% cashback in general and a 5% rotating category every month.  I have been using it for my expenses and then if a household item is in the 5% category, I’ll use it for that too. 

For example, gas stations are the category now, so when I fill-up I use my card rather than the household card.  I estimate this will allow me to reap an extra $50-$100 dollars a year.  That’s about $800 extra a year, which about covers my increasing wants.

Dealing with Lifestyle Inflation

My increasing wants can be attributed to lifestyle inflation.  Now that we are more financially secure, I want to enjoy the benefits of our hard work.  The trick is to keep in my mind the behaviors that put us in trouble in the first place.  Namely, not saving for a large purchase beforehand and not making savings a priority.  Since I could not increase my allowance directly, without disrupting the household budget, I had to get creative and find another alternative.  The same principals can be applied to any expense.  If you want something bad enough, you should be able to find a way to pay for it.

$10 Per Month Cell Phone Plan – My Experience with Republic Wireless

Photo by where_ever_i_am_ via MorgueFile - used w/permission

Recently I decided to stop overpaying for my mobile/cellular phone service. At $150 per month for two lines, I realized there had to be a better and cheaper way.

Finding a New Plan

Locking myself and my wife into a neverending stream of contracts, two year commitments on a phone barely designed to last one and a half. Even the top model phones can’t stand two years of service, losing battery life and generally acting like a ten year old shitty computer after a few months of use.

Smartphones have become an integral part of our lives. Just sit on a park bench or watch people on public transportation. Hell, just walk people walking down the street, sneaking a look every few steps at the ground to make sure they don’t get run over by a car. And the recent story where a woman died after running back into her burning house for her cell phone, injuring a police officer in the process, shows more than anything that our smartphone addiction is reaching dangerous heights.

So in addition to saving money, I challenged myself to do away with the 24/7 smartphone. Republic Wireless, one of the newer cell providers that resell access to the networks of Sprint and Verizon, has a $10 per month cell phone plan that gives you data access only on wi-fi. That means when you are travelling between your home and office, or out camping, you won’t be able to surf the web. I know that most of you couldn’t stand the idea of not being able to distract yourselves on a boring train ride to the office, but I’ve been without a smartphone for about two months and I am happy to report that I don’t miss it.

How Much Am I Saving

The first thing I did was do the math. My wife still had a year in her contract on an iPhone 4, and I had two months left in my two year agreement. I called AT&T to inquire about my early termination fees. To cancel both lines and break my contract would cost $380. Many would balk at a fee like that, and in fact, fees for early termination are the number one reason in my unofficial survey that friends and colleagues hesitate to make the jump. One of the benefits of financial independence is that you are able to spend money to save money. So that’s what I did.

I figured out that waiting the extra two months to cancel my phone when the ETF went away would actually cost me $100 more than just cancelling immediately. That’s because of the monthly rate for the service. I also did the math a bit further and found that it would only take 5 months to reach my “break even point,” which is the date by which I will have saved enough by switching to pay for the $380 fee. After that, the ETF would be zeroed away, as well as the $300 additional funding I would need to buy two new phone from Republic Wireless. I would be saving $105 per month, every month, going forward.

So my upfront costs were actually $680 – hence the notion of spending money to save money. If I hadn’t paid off $100,000 in debt and not been living debt free, I might not have been able to do this. Time is money, and I have both, so I could do it.

My cell phone bill went from $150 per month for two phones to $45 per month. That’s with me getting the $10 per month cell phone plan, and her getting the $25 per month cell phone plan. The difference between them? She gets unlimited 3G data wherever she is, I don’t. That’s because she is a stay-at-home mom taking care of two kids, and living in a fairly unfamiliar city, we don’t want her to be without GPS or the ability to look up needed information when out and about.

How Does Republic Wireless Work?

Republic Wireless offers four rate plans, and almost all of them are cheaper than any of the major providers like Sprint and Verizon. They make money by operating on a dual calling system: when you are connected to Wi-Fi, your telephone calls are routed through the internet via a VOIP protocol. When you aren’t on Wi-Fi, they use rented access to existing providers, as MVNOs. Republic’s hope and belief is that most of us are connected to a Wi-Fi access point at most times, and the free usage they get during those times will more than pay for the times they need to access the paid cellular networks.

Those are the positives, so let me tell you about the negatives, which may actually not be negatives for you. Republic only offers two phone options, the Moto G for $150 and the Moto X for 180-200 (these prices will vary based on when you are reading this). That’s because the phone must be preconfigured to use their unique dual access calling system. If you want to save even more money, Republic allows you to purchase a used Republic Wireless phone from another ex-user or upgrader and activate it.

We both got the Moto G, and I will say that I like it as much as my older HTC One X that I ditched. My wife likes the phone more than her iPhone 4 because the camera actually turned out to be quite good and she likes the larger screen.

I haven’t noticed noticed any call quality issues that would make me not recommend their services. Obviously you’d be best served by living in an area where Sprint gets good coverage. The only issue I had was when I returned from vacation, I forgot to switch my phone from the $5 per month plan of Wi-Fi only, and went to a wedding. Realizing that I had to switch back to my $10 per month cell plan, I could not do so because Republic Wireless requires you to have wi-fi access to do so. So this negative was actually my fault, and was the result of a really good positive, which is that Republic Wireless allows you to switch your cell plan twice a month. So if you are going out of the country for two weeks, you can drop down to the $5 per month wi-fi only plan, which leads me hahaha to another negative, which is that Republic Wireless phones do not work internationally…but…if you are connected to Wi-fi overseas, you can use your phone just like you were in the USA. Your friends can call you for no extra fee, and you can call them without dialing international codes or prefixes.

Is It Worth Switching?

If you want to save some real money and can live with the minor downsides, or if you want to try to limit your smartphone use, Republic Wireless is highly recommended. For my family, we are saving $105 per month, which is definitely enough to convince me to switch. The main driver was the frustration of paying $150 per month, and some upcoming costs that were going to rise (rent). In addition to switching our cell phone service, I switched auto/renter insurance providers, saving another $35 per month. Sometimes smart money management is staying even at zero in a time of rising costs.

Are you looking to switch your cell phone plan too?

3 Main Ways to Market Your Small Business

Photo by Cohdra via MorgueFile

I started my own pet sitting business about 7 months ago.  It went from nothing to about $1500 a month since then.  I’m not a marketing genius or anything like that.  But I do have a solid work ethic, I love animals, and I try to make every pet sitting job go as well for my human clients as for my animal ones.  :-)   Here are the 3 main ways that you can market your small business:

Craigslist and Other Sites

I went to Craigslist first.  A professional posting that is well written and contains all of the major info is the best way to make a first impression on anybody searching your niche that has to decide between you and someone else that offers the same service.  My Craigslist posting contain my experience, services offered, general pricing, and the link to my pet sitting website and all of my other contact info.  I make sure to post in every category that may be searched for pet sitters.  I also repost at least once a week.  Altogether, about 95% of my jobs come from my Craigslist posts.

I also listed myself on (although they are not very respected overall) and  I splurged and spent $10-$15 on both sites to have them run their official background check too.  I’ve gotten a grand total of 3 jobs through those two sites.

Word of Mouth

As with all businesses, word of mouth is huge.  Happy customers spread the word and you get a better reputation and more calls.  I have personally received several jobs just because happy customers and family have told others about me.  The best way to get people to talk about you is to exceed their expectations.  I treat all of my pet sitting animals like my own or even better, lol.  I’ll also do little but thoughtful things around the house if I have any free time.  I just washed one person’s dishes since they had to leave hurriedly because her grandma was sick.  People appreciate thoughtfulness.

Print Advertising

I have business cards via Vista Print, magnetic car door signs, and I’m looking into leaflet design tips.  Overall, people may not call you because of your printed items, but they do shout professionalism.  My future clients seem to request my card sometimes just to see if I was taking it seriously enough to have cards printed.  It also helps that my cards have a memorable photo with me and a parrot on my head…

penny without words

What other tips do you have for us?

Changing a Need to a Want

Money Tree

The following is a staff writer post from MikeS.  He is a married father of 2.  So, with the cat, he ranks number 5 in the house.  He loves numbers and helping people. Please leave any questions or comments below for either Mike or Crystal.

I recently made a change to something I had previously considered a need, dry cleaning.  I don’t have to wear a shirt and tie to work, as my workplace is business casual, but I prefer it.  I have been wearing a shirt and tie for work since my internship in college.  I have also been going to the dry cleaners once a week.  In the last few weeks, I have been rethinking that habit.  I have the money budgeted for the dry cleaning expense, but I began to question whether that’s where I wanted my money to be going.

Expenses Trending Upward

Over the past several months, I have been seeing a couple of my expense categories trending above their respective budget allocations, namely food and what I call house.  Other than I think the kids are eating more, I can’t say for sure what is driving the increased food spending.  I just know it’s been about $25 a month higher on average.  The house category has also seen increased spending.  The house category could simply have been under estimated.  I have been in my current house for 3 years now and I still feel like I am trying to get a handle on the routine maintenance costs for it.  I have a good handle on the things that I know come up on a regular basis, but costs still seem to be outpacing my budget.  Again, it’s not a huge amount, probably in the $25 a month range.  Since, I won’t receive any salary changes until April of next year; something would have to change if I wanted to address the shortfalls.  It may have been Crystal, that triggered me to reevaluate my expenses, but I decided to look and see if there was anything that I could change.

Is It Really a Need?

As I stated earlier, dry cleaning has been in the budget from the beginning and I have always treated it as a need.  When I reevaluated my expenses, I questioned that assumption.  I was spending about $105 a month for dry cleaning.  In the beginning, when I was wearing suits, this made more sense.  All of my suits were dry-clean only.  Today, I simply wear slacks with a shirt and tie, none of it is dry-clean only.  The only thing preventing me from cleaning and pressing the clothes myself was me.  I started thinking whether the $105 on dry cleaning was really where I wanted the money to be going or whether there were better ways to allocate that spending that money.  It was then that I decided that I could clean and press my own clothes and reallocate the $105 to other areas.


The first two things to account for were easy, food and housing.  I will begin to allocate an additional $25 each month to each category.  This should hopefully bring those categories back on budget.  The next allocation was to additional savings.  I will be adding $25 to the monthly amount that I send to my Vanguard brokerage account.  That will bring that amount to a total of $75 a month.  I then decided to up our allowances, or “fun money”, by $25 a month.  I’ll allocate $15 to myself and $10 to the wife.  Yes, this is certainly a want, but I reason it that I am doing something to earn it by washing and ironing the clothes myself.

Constantly Changing Budget

My budget never seems to remain the same during the course of a year, which is a good thing.  As my opinions change or evolve on what I believe the best use of my money is, my budget reflects it.  I certainly don’t make daily or even weekly changes, but a few times a year seems to be the norm.  This helps me to stick to the budget as I believe it gives me the best chance to achieve my goals.

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