eBook Review – Unautomate Your Finances – by Adam Baker

Written on March 9, 2010 by Brian in Book Review
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<man crush> Adam Baker is awesome.  Every time I meet someone that talks about living their life differently, I start to tell the story of Mr. Baker.  He has done some awesome things since his emergence online a year ago.  He has been a key supporter of me and my site and has helped me grow as a man as much as a blogger.  I have a ton of respect for him, and I am thrilled to review his eBook, “Unautomate Your Finances”.</man crush>

Unautomate Your Finances

Baker’s book really delves deep into the human spirit.  He approaches personal finance from the ground up.  His goal is very clear.  Break down your financial infrastructure that is filled with complexity, waste, confusion and ignorance and build it to a point where you can handle your finances in a method that works well for you.

If you are just getting started, if you are thinking about changing your financial infrastructure, if you feel you need to take a step back and really understand your money. This book has a ton of value.  What you receive for $17:

  • A 84-page ebook (25,000-ish words). I broke it up into Theory (core principles), Science (exercise to design ideal life and isolate the “next step”), and Application (deeper topics like tracking, budgeting, paying off debt, credit cards, etc…)
    • A 27 minute interview with Leo Babauta (ZenHabits) as a bonus (Leo also wrote the foreword)
    • An audio interview with J.D. Roth of Getrichslowly.org as a bonus
    • 2-page printable PDF budgeting template (of the budget described in Section 3)
    • Minimalist excel template of same budget
    • Baker will be sending out extended bonuses every months or so.  Case studies, more interviews, additional chapters, etc…

What I Think of the Book

I know I will be recommending this book to several friends over the next year.  I thinks its an outstanding display of personal finance creativity and is another way to think about the issues that face us daily.  You can tell the entire book was written from his heart.

Further, the book has a ton of practical and actionable advice for people that have never considered these concepts before.    For the Untemplater type folks, that are looking for a way to get their money under control and to do it in a way that will become part of a lifestyle change, I absolutely think that this book is designed for you.  For the hardcore personal finance reader who already has perfected a system that works for them, you are likely going to enjoy reading Baker’s site (Man vs. Debt) more.

As a numbers guy (which he references in the book) a lot of Baker’s advice doesn’t really work well for me specifically.  But, I would prefer to live in a world filled with Baker’s as opposed to a world filled with me’s (there can only be one me… I will destroy any clones that cross my path!)

Where To Buy It

Surf on over and watch Baker’s introduction video at his launch site.  If this guy doesn’t inspire you then its hard to imagine how you get up every morning.

I wish him all the best of luck and I am really proud of all the work he has put in to make today come to fruition.

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Why You Should Save for Your Kids’ College Education

Written on March 8, 2010 by Brian in Investing, Life Lessons
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Today MD from Studenomics and I are debating a hot button personal finance topic: Should you pay for your kids’ college education.  He takes the stand that you shouldn’t while I am stepping up to the plate for those that believe you should.  Be sure to check out his article HERE and let us know what you think.

I make no qualms about it.  I was incredibly fortunate and walked away with a private school education and a master’s degree from a top-10 program in its field with only $18,000 in student loans.  The majority of my college was paid for my father with his Amex (if you weren’t aware, if you pay for a college education on your credit card, you are likely to earn enough reward points to get a 50 inch flat panel when all is said and done).

Now, contrary to what you are going to read, I actually believe with MD over at Studenomics on why a kid should pay for his or her own college expenses.  But, where is the fun in a debate without at least one-person playing devil’s advocate.  Read on to see why parents, kids and both parties benefit from paying for a child’s college expenses.

Why – For Parents

There is some incredible savings that can be had by setting up a 529 plan for your kids’ education.  While there may be some state deductions you can take for contributing to a 529, there are no federal deductions.  However, that doesn’t mean this plan isn’t the shiz.  If you put money into a 529, it will grow tax-deferred.  When you go to withdraw funds, it will be free of federal taxes.  That is some serious savings.  Considering there are no income limits in order to contribute and the contribution limit in most states greatly exceeds $300,000, this is one of the best vehicles to invest.  Oh, and for the control freak parents out there (read the next paragraph too), the money inside of a 529 doesn’t ever leave the donor’s control.  If for some reason you would rather not give the contents of the 529 to your kid, you don’t have to.  It’s not their money, it’s yours.

To go along with the money remaining under your control, the obvious benefit of paying for your kids college is that you now have a say in their decision.  I am not suggesting you hold this over your kids’ head. But if you feel they need to work hard for grades in high school or they need to apply for scholarships to help offset some of the costs, you have the means to persuade them.  However, I do urge you not to limit their school choice or their choice of study (being a Jewish kid, the old joke was, “what’s your major? Law or medicine?”).  Let them be an individual, but you do have some say in how they reach the end goal by using your means.

Why – For Kids

The benefits for paying for your kids’ education greatly favor the children, but that shouldn’t be a surprise.  There are two major benefits that will make a difference in your children’s life if you pay for their education.  The first benefit is that they will be able to focus on more things than just making money while in college.  That means they will be able to spend more time studying, more time looking for quality internships (even if they are unpaid) and more time partying.  Yes, partying – on your dime! The relationships that people foster in college last a lifetime and help to build a social network and framework for their careers.  You should be proud to have your kids be partying with your money, as these types of relationships will make them far more successful than the average college course.

The second benefit is giving your kids a fresh start upon completion of college.  Instead of feeling weighed down by a mountain of debt they will be free to go after their dreams.  There are enough examples of personal finance bloggers that feel bogged down by student loans and end up taking a 9-5 job they can’t stand because they feel the pressure to pay down their debt.  Us readers can empathize with them.  If you have the means to aid your kids, this may be the greatest benefit of all.

Why – For Both Parties

There are some additional benefits to paying for your kids’ college for both parties.   Primarily, after college you can get rid of your kids and they can get rid of you. You paid for college, therefore if they hold up to their end of the bargain, they should be able to find work at go out and start their lives.

Economically speaking it makes sense as well.  Making best use of your money and your kids’ money, using a 529 saves you from capital gains tax as well as saving your kids from having to pay interest on loans they would otherwise have to take out.

Thanks for reading my side of this debate.  Be sure to check out the flipside over at Studenomics and let us know what you think by leaving a comment.

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Friday Financial Foul Ups: Being Down on High Interest Rate Checking

Written on March 5, 2010 by Brian in Friday Financial Foul Ups
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This week’s Friday Financial Foul Up will feature a guest post from Kyle at Suburban Dollar.  Kyle writes about his own financial experiences and openly states that he doesn’t know everything.  However, that makes his writing and his tone refreshing and I really enjoy reading his content.  If you aren’t already, look for Kyle on twitter (@suburbandollar).   Lastly, Friday Financial Foul Ups has been nominated for a Plutus Award. Please go here and give it a vote for Best Multi-Part Series. Enjoy!

If you would like to add your own financial foul up to this series, please contact me here.
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When I started Suburban Dollar a little over a year ago it was at the end of what many people would call Online Savings Account boom. Interest rates were in the mid 3’s down from their epic highs of around 5% APY. Online saving wasn’t new but it was gaining in popularity and people were flocking to it in droves, driven by banks like ING Direct and Emigrant Direct. The populatity wasn’t limited to savings accounts either, banks had started offering interest bearing online checking accounts. I wanted in on the action.

The Situation

At some point in the last year my wife and I decided enough was enough and we needed to part ways. We both wanted to be able to spend, a little, money without having to feel like the other was judging their spending. We agreed to a set allowance amount and that we would have separate spending accounts for ourselves and joint account for bills, household stuff, and that kind of junk. My wife decided to use a bank account that was setup for us when we got our second mortgage, I was left to my own decisions.

Where I Fouled up

Making your money make money is a key piece of the personal finance puzzle. Stagnant cash is worthless, if you aren’t using it then you need to use it. That was the only thing on my mind when it came time to open up a checking account. I scoured the interwebs looking for the best rates I could find on an online checking account. It turned out one of my online savings banks had a good rate for their checking product and I jumped at it. I made sure there were ATM’s in my area, they were a little out of the way but I was sure I wouldn’t mind. Everything was set and I was ready to roll, they took direct deposits and after finagling with my payroll department I got set to enjoy my personal checking account freedom. The problems started almost immediately, my first direct deposit went in and my online interface showed I had $200 current and $200 available balance. I patted myself on the back and hit the store, well cafe for lunch but still. I ate my lunch and ran my card, the world was good, or so I thought. The next day I went in to check my balance and found not only had my available balance decreased but it had gone to -$27, WTF. The bank holds ALL deposits for 3 days even payroll direct deposits. I overdrew the account because of the hold and got hit with an NSF fee. They eventually waived the fee but it left a bad taste in my mouth. When I opened the account I made sure there were ATM’s in my area that weren’t super far away. I verified there was an ATM at a grocery store less than 1 mile away so I thought it would be good. Man was I ever wrong. I didn’t take into account 2 major problems.

  1. The ATM in question is fortressed behind ~8 red lights, a parking lot, and grocery store doors. It takes 30+ minutes round trip to get to that thing.
  2. The main thing I use cash for is to get out of the parking garage at work, there wasn’t any ATM’s convienent to work so I was constantly getting money out of a non network ATM.

What I Learned

I learned that it pays to know as much as you can about a bank account before you jump in. I went in with my eyes closed and it cost me. You would be surprised at how quickly ATM fees negate any potential benefit of an interest bearing checking account. In the year that I have had the account I have spent $38.50 on ATM fees and made a whopping $1.84 in interest. You slap those two numbers up against each other and you get earnings of -$36.66. I don’t know about you guys but that seems like a pretty bum deal to me. I have been with the same bank since I was a teenager. I watched it get bought out 3 times and they have been solid to me through and through. There is no reason for me to be crazy and get an online checking account when I could have gotten an account with my local bank which would cost me less in fees and hassle. Interest isn’t always the biggest decision you need to make when deciding where to put your money.

———-

Do you like this series? Check Out The Previous Foul Ups:

Foul Up #21 – Brian (My Next Buck) – Pale Dude’s Shouldn’t Go Tanning
Foul Up #20 – Shawanda (You Have More Than You Think) – How Financial Knowledge Can Hurt
Foul Up #19 – Christine (Money Funk) – Love Can Hurt Your Financial Situation
Foul Up #18 – Clayton (Just Good Financial Advice) – Trying to Get Rich Quick
Foul Up #17 – Craig (Budget Pulse) – Black Friday Purchase Becomes a Dust Collector
Foul Up #16 – Jesse (PF Firewall) – The Fine Print of Rental Properties
Foul Up #15 – Paul (Fiscal Geek) – Unsuccessfully Restoring American Muscle
Foul Up #14 – Mrs. Micah (Mrs. Micah – Finance For a Freelance Life) – How Getting Married Wrecked My Finances
Foul Up #13 – Evan (My Journey To Millions) – Speeding Up Payments on Loan Interest, Not Principal
Foul Up #12 – Elle (Couple Money) – Stretching Yourself to have a Comparable Car to Your Friends
Foul Up #11 – Revanche (A Gai Shan Life) – Sibling Bailouts Cost More than Just Money
Foul Up #10 – Brad (Enemy Of Debt) – There’s Nothing Interesting About Interest-Only Loans
Foul Up #9 – Jason (Redeeming Riches) – Buying a Car with a Balloon Payment at the End
Foul Up #8 – David (Money Under 30) – Being Too Eager to “Move Out” and “Move Up”
Foul Up #7 – Matt (Debt Free Adventure) – Upside Down and Paying The Price
Foul Up #6 – Brian (MyNextBuck) – Overdue Books Prevent Me From Renting an Apt
Foul Up #5 – Kelly Whalen (The Centsible Life) – Poorly Planned Vehicle Purchase Costs $24,000
Foul Up #4 – Stephanie (Poorer Than You) – Signed My Life Away at Age 17
Foul Up #3 – Deliver Away Debt – How I Wasted Over $10K and 11 Months
Foul Up #2 – Brian (MyNextBuck) – Quick Fixes to Weight Loss
Foul Up #1 – Brian (MyNextBuck) – How I Didn’t Earn $3000 in Free Money

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How Much it Costs to Become an Adult Hockey Player

Written on March 2, 2010 by Brian in Conscious Spending, Fun Stuff
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Sunday was one of the most inspiring days I have had in awhile. All my life I have been a hockey fan. Depending upon where I have lived, I have either been embraced or mocked over the years. But, the other day the entire continent watched and held their collective breaths during the USA vs. Canada gold medal game.

The game had a lot of significance for me personally, but what I can’t stop thinking about is the kids that may have watched it and will now start begging their parents to take them to an ice rink to feel what it’s like to move their bodies so fast and fluid on a surface that most people are terrified to even walk on.

I equally look forward to the adult populations embracing the game as their own. See, about three years ago I had never set foot on an ice rink. I was a great fan of the sport, but didn’t know how to skate or anything else related to the game.  Maybe there is someone out there that was waiting for inspiration to hit before giving the sport, and Sunday was that inspiration. For you, I am going to recap what you can expect to pay to get yourself started down a career on the ice. (Please note: these are the costs associated with adult ice hockey – for youth ice hockey you are going to need to find someone with kids)

Equipment

There is always the debate of whether to buy used or new equipment when starting up a new sport. I would typically say go used, but hockey equipment can get quite funky and you want items that are the right size. Everything listed here can be purchased used, however I would stay away from used skates. They are far too crucial for you not to have something that perfectly fits and is molded to your feet.

  • Ice skates – $80-$300 (if you are just starting out you don’t need top of the line skates, but not getting a really cheap pair can be worth the investment)
  • Helmet w/ a cage – $80-$130
  • Shoulder pads – $50-$100
  • Elbow pads – $30-$60
  • Gloves – $30-$100
  • Hockey pants – $60-$100
  • Shin guards – $40-$100
  • Hockey Jock (for men or women) – $30-$40
  • Hockey socks - $10
  • Practice jersey – $20
  • Hockey stick - $30-$150 (you will need to have two with you at all times as these expensive numbers do break. For me, I refuse to pay more than $80 a quality stick)

Miscellaneous items

  • Clear tape – $3 a roll (this is to tap up your pads for a more snug fit, expect to go through a lot of this, but you can buy in bulk online.
  • Cloth tape - $3 a roll (this is to wrap the handle and blade of your stick)
  • Mouth guard – $20 (most people don’t wear one in recreational hockey)
  • Water bottle - $5 or find one for free
  • Skate sharpening – $8 (you will need to get your skates sharpened every few games at most or every few month at least)
  • Hockey bag – $40-$60 (need to hold your gear somehow)

Ice time

It’s important to get out and practice often until you feel comfortable on your skates. There are three different types of skates you can go to for ice time.

  • Public skate - $5-$8 (open to the public, can be pretty crowded and you aren’t going to be wearing pads or carrying a stick)
  • Stick and puck – $10-$12 (this session is for hockey players that want to work on things like stick handling, shooting, skating, etc. without having to play in a game)
  • Pick-up games – $10-$15 (you will actually have a chance to scrimmage at these sessions)

League fees

While the equipment is expensive, the league fees aren’t cheap either, but no athletic hobbies (golf, etc) are all that cheap. As a guy that plays on two teams and loves every minute of it, the cost is ABSOLUTELY worth it.

Expect to pay anywhere from $300-$550 for a full length winter season. The price will depend greatly on your geographic area. If you live in the north where there are more rinks, more available ice time and more competition, you can expect to pay a little less.

Be on the lookout for beginner leagues that may offer special rates if you have never played before. Also, don’t be intimidates. If you join a team you will make some great friends and likely you will be matched with people of a similar skill level.

Some other things to consider

If you have a family, there are significant time commitments to playing hockey. If your significant other works and you have kids, expect to pay for babysitters often.

One of the most often forgotten costs is that you will likely need to bring a case of beer once or twice throughout the season.  Think back to when you were a little kid and you brought orange slices to your soccer games.  Well, as an adult, its beer to drink in the locker room or parking lot after the game.

Lastly, be sure to have a spot in your apartment or house where you can put your gear to dry after each skate/game.  It’s important to air the gear out, it reduces the smell and makes the equipment last longer.

Is it worth it?

I spend over $1000 a year on hockey, and there was the initial investment of $1000 to get all of my equipment.  With a resounding YES, I can say that the investment was absolutely worth it.  I have never had more fun competing or working up a sweat in all my years of playing sports.  It’s a challenge unlike any other, and the camaraderie is unparalleled to anything else you can experience in recreational sports.  If you have the means and are thinking about starting your life as an adult hockey player, I can only wish you the best of luck and tell you that you will be glad you did.

For more information check out the following two sites and book:

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Friday Financial Foul Ups: Pale Dudes Shouldn’t Go Tanning

Written on February 26, 2010 by Brian in Friday Financial Foul Ups
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This week’s Friday Financial Foul Up will feature one of my own foul ups from years past.  If you like what you read, you should consider subscribing to my site by clicking here.  Also, Friday Financial Foul Ups has been nominated for a Plutus Award.  Please go here and give it a vote for Best Multi-Part Series.  Enjoy!

If you would like to add your own financial foul up to this series, please contact me here.
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We all have our own insecurities. One of mine is that I will never be the tall, dark and handsome type. Tall, yeah. Handsome, of course! Dark, well I am just SOL there.

The Situation

In grad school I had some pretty interesting friends. One of them wouldn’t classify himself as metro, but yeah, he was. Anyway, during one of our poker games, the subject of tanning came up. I was intrigued, especially being the pale guy I was. I decided to give it a shot.

Where I Fouled Up

While my intentions were just to give tanning a try, I am sure all you ladies know that it’s a process that requires constant maintenance. I get into the location with a buddy and the smokin hot chick behind the counter started to explain all the packages that were available to new clients. I settled on the best value. It was something like 80 minutes for $100 or something like that.

The first time wasn’t bad. I didn’t burn myself and since I went in the middle of winter, it actually felt good to be surrounded by all that heat. I went the next week, and the week after that. I went from being pale white to just white!  Come the third or forth consecutive week I didn’t have time to get to the tanning spa. When I went to go back I looked at myself and I looked the same as how I had started. Pale.

I gave up and had like $50 worth of value at that location that went unused. I didn’t have time or the interest to go back. Life was too busy and unsuccessfully tanning myself wasn’t a priority.

What I Learned

I learned several things through this foul up. First off, there is no way around being pale. Gimmicks rarely work. Secondly, when you have to pay up front for something you aren’t sure of, think twice! Lastly, I learned that if you are going to ignore the two things I mentioned, for chrissakes pick a location that is super convenient so you have no excuse not to get the full value for your money.

P.S. For some fun viewing check out Pale is the New Tan.

———-

Do you like this series? Check Out The Previous Foul Ups:

Foul Up #20 – Shawanda (You Have More Than You Think) – How Financial Knowledge Can Hurt
Foul Up #19 – Christine (Money Funk) – Love Can Hurt Your Financial Situation
Foul Up #18 – Clayton (Just Good Financial Advice) – Trying to Get Rich Quick
Foul Up #17 – Craig (Budget Pulse) – Black Friday Purchase Becomes a Dust Collector
Foul Up #16 – Jesse (PF Firewall) – The Fine Print of Rental Properties
Foul Up #15 – Paul (Fiscal Geek) – Unsuccessfully Restoring American Muscle
Foul Up #14 – Mrs. Micah (Mrs. Micah – Finance For a Freelance Life) – How Getting Married Wrecked My Finances
Foul Up #13 – Evan (My Journey To Millions) – Speeding Up Payments on Loan Interest, Not Principal
Foul Up #12 – Elle (Couple Money) – Stretching Yourself to have a Comparable Car to Your Friends
Foul Up #11 – Revanche (A Gai Shan Life) – Sibling Bailouts Cost More than Just Money
Foul Up #10 – Brad (Enemy Of Debt) – There’s Nothing Interesting About Interest-Only Loans
Foul Up #9 – Jason (Redeeming Riches) – Buying a Car with a Balloon Payment at the End
Foul Up #8 – David (Money Under 30) – Being Too Eager to “Move Out” and “Move Up”
Foul Up #7 – Matt (Debt Free Adventure) – Upside Down and Paying The Price
Foul Up #6 – Brian (MyNextBuck) – Overdue Books Prevent Me From Renting an Apt
Foul Up #5 – Kelly Whalen (The Centsible Life) – Poorly Planned Vehicle Purchase Costs $24,000
Foul Up #4 – Stephanie (Poorer Than You) – Signed My Life Away at Age 17
Foul Up #3 – Deliver Away Debt – How I Wasted Over $10K and 11 Months
Foul Up #2 – Brian (MyNextBuck) – Quick Fixes to Weight Loss
Foul Up #1 – Brian (MyNextBuck) – How I Didn’t Earn $3000 in Free Money

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3 Plutus Award Nominations, 2 Jobs Quit, 1 New Career

Written on February 24, 2010 by Brian in Goals, Increasing Income, Life Lessons
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What a week this has been.  Since the blogger happy hour last Thursday, my life has gone in all sorts of weird directions.  Lots to tell and it all ties into personal finance.  Things get better as you scroll down, so I hope you pick up on my excitement.

Plutus Awards

First, and most importantly, I want to tell you that I have been honored with probably the coolest thing since I have started blogging.  I was nominated for two Plutus Awards (twice for one award!)

The Plutus Awards were put together by Flexo of Consumerism Commentary and are going to be awarded to the best of the finance world.  There was an entire section and several categories devoted to blogs and bloggers.  A lot of my favorites received several nominations.  Congrats to each of them.  Voting begins today, so take a look below at the categories that I was nominated for along with some really amazing competiton.  I am truly humbled to be associated with these great writers.

Plutus Award Category: Best Multi-Part Series

Plutus Award Category: Best Kept Secret Personal Finance Blog

Best of luck to all of those nominated in these categories.  I am super excited to be in such amazing company.

Becoming a One Trick Pony

This past weekend, I quit a job for the first time (delivering  pizzas doesn’t count… my car got totaled).  Effective Monday, I am no longer a concierge at the apartment building.  Its kind of a shame, but I have made some great friends there and surely have some memories.  After 20 months of 7 days a week without a day off, I am happy to try and reclaim some of my mid-twenties back.

Unfortunately, I am reminded of a Henry Rollins spoken word bit where he rants about people saying they want to “catch up” on sleeping or “catch up” on reading.  He went on to say something to the effect of you, “You can’t take each day for granted.  You either sleep or don’t.  You either read or you fuckin’ don’t.  You can’t ‘catch up’.”  Makes me feel a bit like “reclaiming” my mid-twenties is an impossibility. At least I have no debt and a lot of mutual funds to show for it.

Taking That One Trick and Hoping to Improve It

As of this morning, I have given my notice to my actual 9-5 employer that I am no longer going to be working for them after two weeks.  I am moving to a marketing agency to work in their marketing intelligence department!  I am really excited about this opportunity as it will give me a whole new skill set and allow me to use my brain in a way I haven’t since late in college and grad school.

One thing to note is that I will be a contractor for the time being at this position.  Which means I am self employed.  I want to give a big shout out to Cash Money Life and Money Blue Book as I used their information about estimated taxes and self employment taxes when making my decision to take my career in this direction.  You will see a lot more writing about how to truly live as a self employed individual.  I will talk about my quest for health care and dental coverage, filing estimated taxes, writing things off, etc.

As you can see, its been an exciting couple of days.  Forgive this being a week with only this post and a Foul Up on Friday.   Things are just a bit hectic and show no signs of calming down.

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Friday Financial Foul Ups: How Financial Knowledge Can Hurt

Written on February 19, 2010 by Brian in Friday Financial Foul Ups
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This week’s Friday Financial Foul Up will feature a submission from Shawanda of You Have More Than You Think.  Shawanda is one of our fellow DC Bloggers and was one of the first bloggers I met in person.  I really respect her opinions and her writing.  Shawanda is a CPA (so she really does have finance experience) and practices extreme frugality (not as cool as extreme sports!).  If you want more of Shawanda you can follow her on twitter (@theycallmecheap).  Enjoy her foul up of KNOWING what to do and NOT following through on that knowledge!

If you would like to add your own financial foul up to this series, please contact me here.
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My first personal finance book was The Wall Street Journal Guide to Planning Your Financial Future. It was given to me as a high school graduation gift by one of my closest friends. I’ve been smitten with the subject matter ever since.

Now, I’m no expert, but I do know a thing or two about money.  As we all know, and so easily forget, knowing is only half the battle.

The Situation

When I began my professional career in August 2004, I was far more well equipped with financial wealth building information than your average 22 year old. I knew the value in diversification, passive income, tax deferment, and, most important, compound interest.

In order to comfortably retire, I figured I should invest at least 12% of my annual income. I didn’t arrive at that percentage as a result of some complicated, scientific calculation. David Bach, in his book Smart Women Finish Rich, said it was a good idea so I went with it.

When it comes to retirement planning, you won’t get very far in Money Management 101 without learning the hierarchy of proper cash allocation.

  1. Invest in your 401(k) up to the maximum your employer will match. At the time, the company I worked for offered a pitiful 25% match on up to 6% of my salary. Although measly, it’s 3 times more than a reasonable return on a balanced portfolio.
  2. If you qualify, max out a Roth IRA. You fund a Roth IRA with after-tax dollars so you don’t have to worry about paying inflated tax rates later when you’re, you know, rich. In 2010, the most you can contribute to an IRA is $5,000 if you’re under 50 years old and $6,000 if you’re 50 or older.
  3. Max out your 401(k). Although there is such a thing as a Roth 401(k), many companies only offer the traditional version which is still good. Funding one adds tax diversification to your portfolio. Plus, you can contribute up to $16,500 in 2010 to a 401(k) if you’re under 50 years old and up to $22,000 if you’re 50 or older.

If at any point during this three step process I hit 12% of my annual income, I stop investing.

That’s great stuff, right?

Where I Fouled Up

I knew exactly what to do. So, here’s what I did:

  1. I invested 6% of my salary in my 401(k). Remember that’s the most my employer matched.
  2. I didn’t save an additional dime and spent the money I should’ve invested in a Roth IRA on clothes, shoes, eating out, and other foolishness for two straight years.

Once the extra cash landed in my paycheck, all that financial prowess went out the window. Besides laziness and lack of self control, I really can’t think of any other reasons I only contributed 50% of what I originally planned to my retirement accounts. I know opening an IRA is really easy. It’s still fresh in my memory, because I just opened my first Roth IRA last month, in January 2010.

If I knew then what I know now, I would’ve contributed the entire 12% to my 401(k). Maybe it’s not the best strategy, but it sure beats the one I implemented.

What I Learned

Even as a child, I understood the differences between knowing, saying, and doing. All that information didn’t stop me from sitting on my butt and not doing what I knew I should’ve done.

At this point in my financial journey, I don’t even attempt to do what will yield me the greatest overall return. I simply focus on what I’m likely to do.

Recently, I realized I probably won’t get around to doing the proper research required to create an optimal investment portfolio anytime soon. Instead, I set aside a chunk of money and immediately invested it in low expense, commission-free, ETFs (Exchange Traded Funds) from Charles Schwab.

Surely I can do better, but you know what?

I’m not even gonna try.

———-

Do you like this series? Check Out The Previous Foul Ups:

Foul Up #19 – Christine (Money Funk) – Love Can Hurt Your Financial Situation
Foul Up #18 – Clayton (Just Good Financial Advice) – Trying to Get Rich Quick
Foul Up #17 – Craig (Budget Pulse) – Black Friday Purchase Becomes a Dust Collector
Foul Up #16 – Jesse (PF Firewall) – The Fine Print of Rental Properties
Foul Up #15 – Paul (Fiscal Geek) – Unsuccessfully Restoring American Muscle
Foul Up #14 – Mrs. Micah (Mrs. Micah – Finance For a Freelance Life) – How Getting Married Wrecked My Finances
Foul Up #13 – Evan (My Journey To Millions) – Speeding Up Payments on Loan Interest, Not Principal
Foul Up #12 – Elle (Couple Money) – Stretching Yourself to have a Comparable Car to Your Friends
Foul Up #11 – Revanche (A Gai Shan Life) – Sibling Bailouts Cost More than Just Money
Foul Up #10 – Brad (Enemy Of Debt) – There’s Nothing Interesting About Interest-Only Loans
Foul Up #9 – Jason (Redeeming Riches) – Buying a Car with a Balloon Payment at the End
Foul Up #8 – David (Money Under 30) – Being Too Eager to “Move Out” and “Move Up”
Foul Up #7 – Matt (Debt Free Adventure) – Upside Down and Paying The Price
Foul Up #6 – Brian (MyNextBuck) – Overdue Books Prevent Me From Renting an Apt
Foul Up #5 – Kelly Whalen (The Centsible Life) – Poorly Planned Vehicle Purchase Costs $24,000
Foul Up #4 – Stephanie (Poorer Than You) – Signed My Life Away at Age 17
Foul Up #3 – Deliver Away Debt – How I Wasted Over $10K and 11 Months
Foul Up #2 – Brian (MyNextBuck) – Quick Fixes to Weight Loss
Foul Up #1 – Brian (MyNextBuck) – How I Didn’t Earn $3000 in Free Money

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Book Giveaway: Living Well with Bad Credit

Written on February 17, 2010 by Brian in Book Review
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This morning I am going to discuss and giveaway a copy of “Living Well With Bad Credit” by Chris Balish and Geoff Williams.  It was about halfway through the book that I realized I was holding something a bit unique and a bit different. Keep reading and I will explain what was so interesting about this book and how to win a copy for yourself (and trust me when I say that your credit situation shouldn’t have an affect on your interest of this title).

Quick Review

When does genius often occur? For a lot of us, it is when we are feeling pressure and our backs are against the wall. If you have bad credit, it’s possible you feel like you are always against a wall (even though it’s argued you should come to peace with this as You are not your credit score – sounds like something Tyler Durden would say). However, when times are tough is when people get the most creative.

There are a ton of strategies and practical tips that will help people live a normal life without feeling the effects of a crappy credit score. But, and this is where the genius of this book comes in, for those frugal folk that are looking for alternative methods to live, there are some gems in here for you that make this book worthwhile for you. From living in a yurt or a tiny home (this actually sounds awesome!) to renting a car instead of buying, you can find some interesting hacks to live without credit and to potentially save money. Heck, even if you are a blogger, you should give this book a glance as it will provide you with potential writing topics for at least a month.

For the target audience of the book, there is some really great value here.  Strategies and alternatives are discussed for banking, housing, driving, starting a business and even taking a vacation all without having to worry about your credit score tripping you up.  This book is not for those that are struggling with their next meal, but it is for people who find themselves doing okay in life, but just can’t seem to get out of the cycle of bad credit.  If you have admitted to yourself that your credit score is a problem, and you feel it draining on your life, this book can provide you some refreshing ways for you to not have to rely so heavily on credit to live your life.

I recommend the book for anyone that fits the description above.  Its well paced and quite witty.  For such a depressing topic (and yes, having a really bad credit score can be depressing), the book remained uplifting and positive.

How to Win a Copy for Yourself

Now, you have read the review, gone over to Amazon and thought about buying a copy.  Well over the next week, you will have the opportunity to win a free copy of the book by either leaving a comment at the bottom of this post, or tweeting the following: “RT @brianscheur I am not my credit score! http://wp.me/pDleL-eS“.  A winner will be selected at random on Friday, February 26th at noon EST.

Its as easy as that.  Best of luck to you all and if you pick up a copy, I am sure you will find something of value to add to your personal finance life.

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I Lived 80 Years and All They Gave Me Was This Lousy Box of Stuff

Written on February 16, 2010 by Brian in Minimalism
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Today might be a bit morbid, but it is something I thought about for a moment yesterday. As I try and sell a lot of my belongings that lack utility, I am slowly becoming a minimalist. This is actually making me feel freer than I ever have before.

But, when a close friend’s grandmother died and he explained how emotional it will be for his family to pack up her belongings, I got to thinking. If I continue on my current path, when I depart this earth (or whatever planet we are living on then), I may have nothing more to show for it than a computer, a big ass tv, and a medium sized box of stuff.

This would take my family or loved ones about 8 minutes to pack up and discard. Part of me thinks I shouldn’t give a damn because I will be gone. But I don’t think anyone wants to ponder the fact that they lived a full life and that it can all be folded into a box in less time than an oil change.

So what am I going to do about this? Well, certainly nothing today. But I want to know how other minimalists feel about the topic. Also, I want to hear about how those collection addicts and hoarders feel.  I may scour some of their blogs or ask them personally and report back.

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Have Two Hot Chicks Design Your Blog – Pimp Your Site With Shatterboxx

Written on February 13, 2010 by Brian in Blog-O-Sphere
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For those not in the know, there are two awesome bloggers that have put their genius together and created a new Web Design company called Shatterboxx.  Those two bloggers are Jamie Varon (from Twittershouldhireme.com fame and Alifeintranslation.com) and Nicole Antoinette (Nicoleisbetter.com and fellow Untemplater author!).

If you haven’t read either of their stuff, you are certainly missing out.  Their writing is some of the most fun and wittiest i have seen on the internet and makes me wonder just what “Awesome Girl Tree” they both fell from and if i am allowed to camp out underneath it.

For full rules of the contest and her announcement, check out Jamie’s site HERE.

If you are too lazy to read the post (which makes you really lazy!) you can enter in the following ways:

  • Follow  @shatterboxx on Twitter
  • Tweet about the contest then come back here and leave a comment on this post with a link to your tweet(s). Sample tweet: Win a gorgeous custom blog designed by @shatterboxx ladies @jamievaron & @nicoleisbetter. Contest details here: http://bit.ly/9jaRmO
  • Blog about the contest then, again, come back here and leave a comment on this post with a link to your post
  • Sign up for the Shatterboxx Media monthly email newsletter

Best of luck to these lovely ladies and to you at winning their contest!

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Friday Financial Foul Ups: “Love” Can Hurt Your Financial Situation

Written on February 12, 2010 by Brian in Friday Financial Foul Ups
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This week’s Friday Financial Foul Up will feature a submission by Christine from Money Funk.  Christine has created a great community at her site where she discusses the process of eradicating over $85,000 in debt.  She is active on twitter (@moneyfunk) and is a great asset to the PF blogosphere.  I hope you enjoy her [...]

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Ten-Minute Taxes for the Single Young Professional

Written on February 10, 2010 by Brian in Taxes
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Taxes are a bitch, all of us know this.  No one like paying them, and few of us like doing them.  I don’t know about you, but at times the language in my 1040A serves to make me feel like a moron.  Then there are state taxes and county taxes.  Considering I am young, have [...]

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Announcing Turbo Tax Giveaway Winners!

Written on February 8, 2010 by Brian in Giveaways
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Ladies and Gents, I want to congratulate Warren (entered via comment) and WealthyImmigrant (entered via comment) on each winning one of the Turbo Tax Free Filing codes that I offered here last week.
If you didn’t win, I hope you had better luck with Peter (BibleMoneyMatters), Clever Dude, mapgirl, and J. Money (Budgets Are Sexy) in [...]

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Friday Financial Foul Ups: Trying to Get Rich Quick

Written on February 5, 2010 by Brian in Friday Financial Foul Ups
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This week’s Friday Financial Foul Up will feature a submission by Clayton Collins from Just Good Financial Advice. Clayton is a Fire Fighter and blogger who is passionate about Financial Strength and saving for retirement. He writes about Finance, Saving for Retirement, and Personal Development. His writing has been featured at My Next Buck and ChristianPF. [...]

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What the Movies Show Us about Pay Day Loans

Written on February 3, 2010 by Brian in Life Lessons
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By now most of you know us bloggers opinions on pay day loans and check cashing places.  But to be honest, I have never walked into an Ace Check Cashing location.  The closest I have been to a pay day loan place is in some of the movies I have seen recently.  Its funny though, [...]

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