Buy That Fun Stuff Without Going Into Debt

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Cash Register

You want to buy that new something.

Maybe it’s the Nintendo Wii and the Wii Fit?  Maybe it’s a new digital camera?  Perhaps it’s a new flat-screen TV or a GPS?  You can’t afford to buy it out-right.  If you charge it to a credit card you will be paying interest on top of the price of the item.

What if there was a way to buy the item and earn interest?  What if we can help make sure you buy it at a great price?

Sounds interesting right?

I’ll tell you what we’re going to do.  First off I have to tell we’re going to wait to buy this item.  Bummer I know.  You want it now.  But you don’t have the cash and paying interest on it, as well as being in debt, isn’t a great option.  Deal with it.

We’re trying to be responsible here and still get our new thingamajig.

Do you have an online savings account that allows you to create sub-accounts?  Good.  Now go into your account and create a sub-account titled Thingamajig (or whatever it is that you want to buy).  This is where you are going to save your money.

Now what amount of money can you put away into this account monthly without hurting your budget?  Can you cut back on Starbucks or something similar every week?  What would you expect to pay on your credit card if you charged it?  That’s a good amount to start with too.

Figure out how much a week this comes out to.  Go back to that sub-account.  We’re going to set up an automatic, weekly withdrawal into this account.  Why weekly?  This way you can see the money building up quicker.  I don’t want you getting impatient waiting for a monthly addition to the account.

Now we wait until the account fills up with the cost of your thingamajig!  This can be tough as you’ll test your patience but it will pay off.  Resist cashing out until you have the full amount to cover the purchase (you calculated taxes, accessories, possible warranty, delivery, etc…into your cost already, right?).

Here’s where this plan is great:

  • You earn interest while you save! – Every month you save you’re helping yourself with the interest you are earning rather than paying a credit card company interest for the privilege of using their money!
  • You now have time to do research - Go check out the thingamajig in a few different stores and ask the salespeople about the item. Go online and read consumer reactions. Check everyone’s price and see what locations give you the most bang for your buck (do some throw in accessories or have better return policies should something not work?).
  • A new improved model may come out – In the time you’re saving you may find that a better version has come out. Maybe the first was discontinued. Technology changes rapidly. today’s top of the line cell phone could be a clunker after a little while. It could be another company now has a better product.
  • The price could drop – Look at that. Now the thingamajig isn’t even as expensive as it was. You’ve earned interest and saved on the cost!
  • You may find you don’t want it anymore – This may sound crazy but in giving yourself some time to save and watching your savings grow you may not feel the thingamajig is worth the money anymore. Maybe it was just a fad that’s already faded? Either way, you now have a little extra to add to your savings. Sweet!
  • You became more responsible with your money - You didn’t go into debt buying your thingamajig. You set up a savings plan and stuck to it. You might have even looked at your expenses and found some things you didn’t really need in order to save quicker. What you were saving is now extra savings for you if you choose after you buy your thingamajig!

There you go!  You got your thingamjig, you didn’t go into debt, you earned interest to help pay for it, and you got the best possible price for it.

I bet it’ll feel good when you get home and open it up!

photo by skippy13

Five Things Indiana Jones Can Teach Us About Personal Finance

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Indiana Jones Lego

I saw Indiana Jones and the Kingdom of the Crystal Skull (among all the prior movies).

Was it as good as Raiders of the Lost Ark?  How many movies are?

Was it a lot of fun to watch? Absolutely!

I got to thinking about ‘ole Indy.  What makes him successful in his movies?  What is it about him that keeps him coming out ahead?  And can those qualities be translated to personal finance?

Here are five things I think Indiana Jones can teach us about personal finance:

Indiana Jones doesn’t need a lot of stuff

When he goes off on an adventure he has a few items: His whip, hat, jacket, side bag, boots, pants, shirt, gun holster, and notebook.  This is basically his adventure “uniform” and it doesn’t change.  Indy makes do with what he has and makes his stuff last.  Ever see him buy a new hat?  How about shiny new boots?

How this translates for us: Find out what you need in your life.  Note the word “need” and not want.  Don’t clutter your life with stuff.  Stuff takes up space and uses up money. Also it usually pays to buy quality when you can. If you take care of a good item it can last many years (like a trusty fedora hat).

Indiana Jones has focus and persistence

When he has a goal he goes after it with all of his focus until he can’t continue any more.  Do Nazis stop him?  Angry cult member?  Communists?  Even his enemies recognize this quality in Indy.  Think of the times he’s been caught, kidnapped, or blackmailed into helping the enemy.  Indiana Jones is the go-to guy if you want an artifact found.

How this translates for us: Create personal finance goals and stick to them.  Are your goals worth fighting for?  Will you retire?  Will you be financially independent?  Develop persistence and focus to stay on track with your goals and complete them.

He’s daring, brave, and well educated

There’s times where Indy is doing some crazy things (climbing into an archaeological dig surrounded by Nazis anyone?).   What keeps Indy afloat when he goes off on a daring adventure?  Luck has a bit to do with it.  But it’s his education that tempers bravado. R emember, not only is Indiana Jones an adventurer he’s also a doctor of archeology that teaches at the university level (and a Boy Scout).  A big part of why he’s successful in his adventures is because he’s already done extensive research on what he’s going after.  As wild as he sometimes seems he doesn’t blindly go off looking for adventure.  He’s put years into learning his subject.

How this translates for us: Don’t blindly make investments or make purchases without out doing your homework first.  Educate yourself about personal finance.  Keep learning.  Know why you are putting money into an investment and understand what the risks are going in.  When making a major purchase study up on different brands and their reliability and consumer responses.  Try to find the best value and price (maybe you can pick up a really good hat).

He carries a notebook full of information

We see Indy go back to small notebooks all the time.  Whether it’s looking up a map or deciphering a language, he keeps notes on all his research.

How this translates for us: Keep your own notebook.  Track your expenses to see where your money is going.  Keep notes of things you did that saved money.  Make to do lists to stay on top of your life.  Write out grocery lists so you only buy what you planned on.  And these days there are so many apps out there for notes that you can’t use not wanting to carry a notebook as an excuse.

He tries to do the right thing

There are many times Indy can get quick cash by obtaining an artifact and selling it.  But he doesn’t.  He tries to do the right thing.  Whether it’s saving children from slavery or keeping biblical artifacts from Nazis, Indy does the right thing.

How this translates for us: Act right in your life.  Don’t lie to your spouse about finances however small the lie may be.  Don’t take part in get rich quick scams – they don’t work.

There you have it. Five ways we can learn about personal finance from Indiana Jones.

Can you think of any more?

photo by Gaetan Lee

Carnival Of Money Stories #58 – Dollar Coins Edition

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Welcome to the 58th Carnival of Money Stories – Dollar Coins Edition. I’m very happy and honored to be hosting this week’s carnival as this is my first hosting experience. Have fun checking out the dollar coins…

I hope you enjoy!

The 1st United States Congress voted to pay Washington a salary of $25,000 a year — a large sum in 1789. Washington, already wealthy, declined the salary, since he valued his image as a selfless public servant. At the urging of Congress, however, he ultimately accepted the payment. A dangerous precedent could have been set otherwise, as the founding fathers wanted future presidents to come from a large pool of potential candidates — not just those citizens who could afford to do the work for free.

Editor’s Picks

Lisa Spinelli presents Free Time or More Money-Which is it? posted at Greener Pastures: Personal Finance. Money is always good but time can be worth more.

Ryan Taylor presents My Portfolio Dropped 8% – How’d Yours Hold Up? posted at Millionaire Money Habits. We have to think of the long run when looking at our investments. I can relate having seen my 401(k) in the red.

Pinyo presents Why I Am Glad The Economic Stimulus Check Is Coming Early posted at Moolanomy. The Economic Stimulus checks are coming just in time for Pinyo!

Mike presents The economics of biking posted at Living the Cheap Life. Saving money by biking to work…I love it! I wish I were closer to my job. I’d love to bike to work but I’m too far away.

Dough Roller presents Do You ‘Steal’ Money From Your Spouse? posted at The Dough Roller | Smarter Money Management. Hmm…I guess there is a fine line between borrowing and stealing depending on how you look at it. Either way it couldn’t hurt to be more communicative with your spouse.

John Adams

John Adams, Jr. (October 30, 1735 – July 4, 1826) was the second President of the United States (1797–1801). He also served as America’s first Vice President (1789–1797). He was defeated for re-election in the “Revolution of 1800” by Thomas Jefferson. Adams was also the first President to reside in the newly-built White House in Washington, D.C., which was completed in 1800.

Finance Tips 101 presents The Pros And Cons Of Personal Loans posted at Finance Tips 101.

RC presents The Health Savings Account (HSA) and Can I Do Better Than a Health Insurance Company? posted at Think Your Way to Wealth.

SingleGuyMoney presents Remembering How Lucky I Am posted at Single Guy Money.

Thomas Jefferson

His opposition to the Bank of the United States was fierce: “I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

NtJS presents My Financial Beating: Episode 1 posted at not the jet set.

GradGirl presents Money Story: Graduation Announcements posted at This Writer’s Wallet.

paidtwice presents Healthcare Feel Like Throwing Money Down A Drain? Good, Sometimes. posted at I’ve Paid For This Twice Already….

James Madison

As a leader in the first Congresses, he drafted many basic laws and was responsible for the first ten amendments to the Constitution (said to be based on the Virginia Declaration of Rights), and thus is also known as the “Father of the Bill of Rights“.[3] As a political theorist, Madison’s most distinctive belief was that the new republic needed checks and balances to limit the powers of special interests, which Madison called factions.[4]

Phil for Humanity presents Gambling Advice << Phil for Humanity posted at Phil for Humanity.

Mitchel Harad presents Fun at the Auction posted at Holy Cash Cow.

Amy presents Settling in for the Summer: May Goals posted at My Daily Dollars.

James Monroe

Monroe is probably best known for the Monroe Doctrine, which he delivered in his message to Congress on December 2, 1823. In it, he proclaimed the Americas should be free from future European colonization and free from European interference in sovereign countries’ affairs. It further stated the United States’ intention to stay neutral in European wars and wars between European powers and their colonies, but to consider any new colonies or interference with independent countries in the Americas as hostile acts toward the United States.

Larry Russell presents The Financial Services Industry is Still the Largest S&P 500 Sector – Even after the Collapse of its Stock Values posted at THE SKILLED INVESTOR Blog.

GBlogger presents Success Stories: Retired At 51 With Over $1.4 Million—And Staying Aggressive posted at CAN I GET RICH ON A SALARY.

Madison presents Create Your Own Dollar Plan: Step 2 posted at My Dollar Plan.

John Quincy Adams

John Quincy Adams (July 11, 1767 – February 23, 1848) was a diplomat, politician, and the sixth President of the United States (March 4, 1825 – March 4, 1829). His party affiliations were Federalist, Democratic-Republican, National Republican, and later Anti-Masonic and Whig. John Quincy Adams was the son of the second United States President John Adams and Abigail Adams. He is most famous as a diplomat involved in many international negotiations, and for formulating the Monroe Doctrine. As president he proposed a grand program of modernization and educational advancement, but was unable to get it through Congress.

Madeleine Begun Kane presents Dear IRS posted at Mad Kane’s Humor Blog.

Todd presents I’m Thinking About Turning Down a Promotion At Work posted at HarvestingDollars.

Silicon Valley Blogger presents How Prosper Financed My Trip and Sundry P2P Lending Thoughts posted at The Digerati Life.

Andrew Jackson

He was a polarizing figure who dominated American politics in the 1820s and 1830s. His political ambition combined with the masses of people shaped the modern Democratic Party.[1] Renowned for his toughness, he was nicknamed “Old Hickory.” As he based his career in Tennessee, Jackson was the first President primarily associated with the frontier.

FIRE Finance presents $6000! Save Your Hard Earned Money! posted at FIRE Finance.

Raymond presents Get A Free Extended Warranty By Purchasing With A Credit Card posted at Money Blue Book.

Dorian Wales presents How to Fortify Your Job: 10 valuable (and challenging) Tips posted at The Personal Financier.

Martin Van Buren

Martin Van Buren (December 5, 1782 – July 24, 1862), nicknamed Old Kinderhook, was the eighth President of the United States from 1837 to 1841. Before his presidency, he served as the eighth Vice President (1833-1837) and the 10th Secretary of State under Andrew Jackson. He was a key organizer of the Democratic Party, a dominant figure in the Second Party System, and the first president who was not of English, Irish, Welsh, or Scottish descent. He was the first president to be born an American citizen[2] (his predecessors were born before the revolution)

BeThisWay presents My Economic Stimulus Check Didn?t Arrive When Promised! posted at Are You Going To Be This Way The Rest of The Time I Know You?.

Shawna presents Where?s my economic stimulus check?!? How to check the status of your stimulus check posted at Bumble…….

Ken Clark, CFP presents Repaying Student Loans: An Overview of Student Loan Repayment Plans posted at Saving for College – About.com.

Statue of Liberty

There are 354 steps inside the statue and its pedestal. There are 25 windows in the crown which comprise the jewels beneath the seven rays of the diadem. The tablet which the statue holds in her left hand reads, in Roman numerals, “July 4, 1776″ the day of the adoption of the Declaration of Independence.

M.B. presents My First Mystery Shopping Experience posted at Be Thrifty Like Us.

joseanes presents Be Open About Your Financial Mistakes posted at Money And Investing.

The Financial Blogger presents Take The Power Back Part 2 posted at The Financial Blogger.

There you have it! I hope you enjoyed. Please make sure to read through all of these great articles. Check back at Carnival of Money Stories to keep up with future editions.

Until next time,

FFB

pictures and quotes from Wikipedia