Free From Broke

A Personal Finance Blog for Regular Folks

Personal Finance

Personal Finance is a catch-all for anything that falls under the umbrella of taking care of your money. A lot of people think of their personal finances as some "other" thing they don't always have to pay attention to. I think it's integral to your life and health.

Take a look at the articles below and get your personal finances in shape.

Four Ways I Upgraded Out Of My Raises

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That one day a year you have been dreading/anticipating at work finally comes.

Your boss calls you into their office and shows you a piece of paper that tells you your new salary. Yay, it’s more! Maybe it’s just a raise or maybe it’s a promotion, either way the new salary figure looks better than what you had. “Now I can get ahead of my bills and save a bit” you tell yourself. A few months pass and you look at your bank account. “Huh? It didn’t grow? What happened? I thought I was making more” you ask yourself.I’ve been there. It would happen to me a lot. I would make more but have nothing to show for it.

Know why? Upgrades.

I discovered that I would upgrade little things in my life that would eat away at any raises I got. Of course I didn’t realize this until much later.

Here are some of the bigger culprits:

Coffee – There was a time I didn’t drink coffee. Didn’t like it. Slowly I came to love the brown nectar. Instead of making it at home I would simply go to Dunkin Donuts. As well as regular coffee I would get all sorts of specialty drinks there as well like iced coffee, iced lattes – you name it. Later as I had more money I upgraded to Starbucks. Love their frappaccinos! But Starbucks is more expensive than Dunkin Donuts. Nowadays I still go to Starbucks as a treat but I’ll usually make my coffee at home or at work.

Clothes – There was a time I would shop at Old Navy. I’d get a pair of khaki’s or a polo for work or maybe some personal gear. Maybe I would get stuff on sale at the Gap. As I made more I’d shop at the Gap and get stuff on sale at Banana Republic. My income grew and I would shop at Banana Republic or Macy’s or Bloomingdale’s, not always looking for the stuff on sale. Now I try to stay frugal and shop at discount places like Century 21 or maybe Target. I also don’t buy anything unless I need to (like if a pair of pants blew out a hole that couldn’t be fixed).

Food – I remember a time where if I went out and ate sushi I would be broke. I might have been able to budget for it once a month but that would be it for going out to a restaurant to eat. As I made more money I would find myself eating out more and more. Sushi night didn’t hurt as bad and became more frequent (as well as other foods). I’ve since cut back a lot. We go out to eat from time to time but the majority of our meals are home based (except my work lunches but even those I’ve been getting cheap).

Gadgets/Doodads/CD’s – I used to buy so much junk that would clutter my apartment! I don’t think I have much left to show for it though. I do have hundreds of CD’s (no, not the investment type). Those aren’t a total waste but many I bought just to get something new or try a new artist. A lot of them don’t get listened to any more (and not just because of my iPod either). And you know how I’d pay for a lot of the stuff? Credit cards. So in the end I probably paid more than what the price stated. I’ve cut back on my impulses a lot and when I don’t I have my wife to answer to (luv u hon). As for music, I’ll still buy CD’s but very rarely and only from artists I’m really looking forward to (if only more artists would release their music like Radiohead for free).

So you see, I think a lot of the time when we get a raise instead of upgrading our finances we tend to upgrade our stuff or our lifestyle. As a result we upgrade ourselves out of our raise.

Have you upgraded yourself out of a raise?

ING $25 Referral Bonuses

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Have you wanted to open an online savings account?

Well here’s your opportunity to open one with ING Direct! They offer high-yield savings with no minimum to open (this includes both savings and CD’s). This means better interest earnings than most other banks. I’ve been using them since April 2003.  If you use one of the referral links below you will receive a $25 bonus. You’ll also be giving me a bonus of $10 so it’s great for us both. In fact, once you open an account you can refer your friends and receive the same bonus as I would. The catch (isn’t there always one) is that you need to open the account with at least $250. What about those no minimums? You can always open an account with any amount lower than $250 but you won’t be eligible for the $25 bonus.

And check this out – If you open with $250 your $25 bonus is an instant 10% return!

Here are the links to use:

Shoot me an email for a link!

ING Sign-up Bonus
ING Sign-up Bonus
ING Sign-up Bonus
ING Sign-up Bonus
ING Sign-up Bonus
ING Sign-up Bonus

If you get the message “We’re sorry, but the referral link within the email you received has expired and is no longer valid. We recommend that you contact the sender and ask them to re-send the referral email. Or click ‘Continue’ to proceed with the application process without the account opening bonus” then the referral has already been used. Shoot me an email and I’ll send you a new link.Like I said, I’ve been using ING Direct for years and I highly recommend them. If I had kept my savings in my brick and mortar bank I would have missed out on a lot of savings and earnings. So what are you waiting for? Go open up a high-yield savings account!

If you don’t have $250 but still want to open an an ING account please click the banner below (please note this is for the Electric Orange account not savings):


As always read the fine print from ING to make sure their online savings is right for you. You should never sign up for anything online without understanding what you are getting into.

7 Credit Card Tips From ING Direct

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I was just on the ING Direct site checking out my savings accounts and decided to check out their tips. They list seven great credit card tips. Check them out (descriptions are mine):

  • Make your payments on time – Very important! Late fees can be very expensive on credit cards and can negatively affect your credit score. If you have problems with the due date you may be able to change your credit card due date.
  • Try to pay off the full balance every month – Pay off the full balance to avoid any interest charges.
  • Avoid cash advances – Cash advances on your credit card have different rates than normal credit. Yeah, it’s gonna be more expensive than if you just charged it.
  • Shop around – Compare rates and services from different credit card companies to get the best credit card offers.  Find one that fits your spending habits.  Make sure to read the fine print as well.
  • Use savings to pay off the cards – It’s great that ING Direct exists offering high interest rates on savings but that high rate doesn’t compare with the interest on your credit card (unless you have a low introductory rate).
  • If you’d like a better rate, just ask – If you have been a good customer you can call the credit card company and ask for a better rate. Try telling them that you received an offer from another company with a better credit card rate; odds are they can lower it for you. Make sure you understand what the new rate is though. It may only apply to new purchases not your outstanding balance.
  • Don’t be left holding all the cards – If you have a lot of cards it means you can do a lot of spending damage. This is bad for both you wallet and your credit score. Get rid of credit cards you hardly use or ask that the credits limits be lowered (a high credit limit can hurt you for some credit card companies).

Of course you should also watch your spending as well.  Don’t abuse your card and know what you can really afford.

Do you have any credit card tips to share?

What Is The Opportunity Cost?

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The term “opportunity cost” is thrown around a lot but many people don’t fully understand the concept.

Opportunity Cost can be defined as

the cost of something in terms of an opportunity forgone…or the most valuable foregone alternative (Wikipedia).

Basically, everything you do has an opportunity cost which is what you are giving up for what you are doing.  If you sleep late, the opportunity cost is whatever you may have done in the morning instead.  When you buy something the opportunity cost of the item is whatever else you could have done with that money (or even with your time shopping for the item).

Why is this concept important? Whenever you make a decision, be it with money, life, whatever, you should look and see what the opportunity cost of that decision is.  This makes you stop and think about whether what you are about to do is worth it.  Is there a better action?  Is my time better served?  Can my resources be better used?   These are questions that should cross your mind.

In terms of personal finance this is looking at what you do with your money and figuring out it’s true worth to you.  See, an important aspect here is what your values are.  Is it better for you to redo your kitchen or put more money away for retirement?   There isn’t necessarily a “right” answer for this.  The decision is yours.  You should be aware of what other opportunities you will miss when you make your decision.

Try to think about the things you do today and figure out the opportunity costs.  Will it change any of your decisions?

Let me know.