Everybody Loves Your Money

Wow.  July is finally upon us.  For months now, we’ve been making plans for various exciting events this month.  For starters, it’s our daughter’s 5th birthday this month.  Instead of spending a ton of money on a huge party, we have decided to take a little bit more reserved approach.  We have invited just a couple of our daughter’s friends and their families out to the lake for a weekend.  One family will spend the night, and the other will just be out for the day.  I think we’ll have a great time and keeping it smaller seems much more manageable. 

We are also headed to Montana this month to visit family and attend my cousin’s wedding.  We are really looking forward to this trip and are excited to see everyone there.  Family will be coming in from multiple cities in the US so it should be a wonderful time to catch up.  We have rented a car and will be splitting gas and the cost of the rental three ways so it’s going to be quite affordable.  We still have the hotel expense and food etc, but we expect the total cost of the trip will be just under $1000.  Believe me, it could be a LOT worse.  If we had decided to fly the cost would have easily doubled.

This coming weekend we’ll be enjoying friends and family out at the lake.  There is a large fireworks show planned and we’ll also be having a large community picnic at the community park.  I think it’s going to be great!

On a somewhat unrelated note, I took a little time this weekend to look at all the major expenditures we have coming up.  We have a few significant expenses in the next couple months.  There is some much needed car maintenance in our future, a large community assessment for the water system at our lake house community, the trip to Montana, annual taxes for our lake house, and finally, we owe a couple thousand more to my friend that helped build our lake house.

To offset some of these expenses we also have some extra money coming in over the next couple months that will mitigate most of these.  We still haven’t received our stimulus check which should be about $1500.  Additionally we also expect a bonus from my company and an extra paycheck in the next few months.  To get a good idea of the impacts to our budget I built a simple spreadsheet to see how the expenses vs the extra income stack up.  I initially thought that all these things would be hitting at once, but realized that they are fairly well spread out through the rest of the year so they shouldn’t be too much of an issue.

This doesn’t sound all that different than an article you might read in the US.  The only difference is that Macedonia has a 35% unemployment rate and poverty is huge.  Families use the motto "You only live once" to rationalize the huge expense and potential debt for years.  They actually get bank loans to throw the parties.  I think that most of these parties are weddings (like the article discusses) but does that make it okay?  One family said that if they don’t spend the money on the wedding, people will visit them all year long to congratulate them, which could end up costing more than the wedding.  I’m struggling to believe that, although I don’t know much about the Macedonian culture.  Anyway, it’s very much worth the read:

BusinessWeek Article on Macedonian Parties

There I was.  Patiently waiting in the turn lane at an intersection.  I was about 4 cars back at the light.  Traffic had built up behind me and there was a brand new green Toyota Camry right behind me.  All was well.

As the light turned green I started to anticipate being able to go forward.  I hadn’t moved an inch when I felt a "slam"!  At first I thought maybe my foot had slipped off the clutch and I’d stalled the truck.  As soon as I thought that, I realized that the impact was too hard for that.  I checked in my rear view mirror and there was the lady and her two kids.  Looking at me with that look of, "Oooops".

We both pulled off the road.  I wasn’t sure what I’d find when I got out but was happy to see that there was no damage to the truck.  Driving a 4wd Toyota Tacoma does have it’s advantages.  In this case it was that her new Camry sits lower than the back bumper of my truck.  In fact it was a perfect marriage of my trailer hitch and her front bumper.  Poor thing.  That brand new Camry has a nice scratch, smudge and dent on it’s front bumper now.

Apparently what had happened is that she was stopped behind me and had turned around inside her car to help her child with a fresh large red drink that she had just purchased for him.  When she did this, her foot slipped off the clutch and that forced her in to the back of my truck.  Not only was her bumper messed up a bit but there was red fruit drink all over inside her new tan interior.  I’m not sure what she was more upset about.

Anyway, it shocked the heck out of me when it happened but all turned out well.  Yet another great reason to drive an older truck.  Although there was no damage, even if there had been a small scratch or dent, I might have been more likely to have not worried about it.

With the price of everything going up, I’ve been very conscious of our energy use both in our cars, and in our home.

I’ve always been one of those people that turns lights off anywhere that they aren’t necessary.  We have been very good about only using lights in the rooms that we are in over the years.  Having a five year old running around the house makes that a bit of a challenge but we have been pretty successful in reinforcing that she should turn off the lights when she leaves a room.  I still have to keep an eye out, but overall we do a very good job of keeping the lights off.

This year we have decided to try to minimize the use of our central air conditioning.  This is the first house we’ve had air conditioning in and somehow we always managed to live through the heat before living here, so why not try to suck it up a bit in this house?  The fact of the matter is, it doesn’t get THAT hot in the Pacific Northwest.  We’ll have a few months of 70-90 degree weather but there will be plenty of cooler days mixed in.  So far this year we have only used the air conditioning two times.  On the two days that we did use it, the temperature got up to 90 degrees and the house was about 80 degrees.  The humidity level is higher here than many other parts of the country (excluding the south) so 90 is significant.  On those two days we worked to get the temperature down to about 73 degrees and ended up pretty comfortable when we went to sleep that night.

In the past our average bill in the dead of summer has been about $200.  Our goal this year is to cut that in half.  We’ll do this by creating cross drafts in the house in the morning and in the evening as it cools off and will also use fans.  We have a ceiling fan in our bedroom which really helps a LOT.  Our daughter does not have a fan but we have a floor fan that we point down the hall to cool her room down.  Just like with cutting our gas consumption in the cars, all it takes is a little bit of effort and awareness to make an impact.

Do you have any ideas for cutting electricity use in your home?

I have to confess something.  More and more these days I’m finding myself thinking about what it would take to check out of the rat race.  I don’t care about having the fanciest stuff, or the latest and greatest tech gadget.  I really want to have the option to just do absolutely nothing as much as I want.

I think it stems from a few things.  First is seeing how happy my friend who retired is.  Sure, he’s older than I am but that doesn’t change the fact that I would sure like to be in his lifestyle situation.  He did a lot of things right to retire around 50.  It’s unrealistic to think that I have done lots of things right that would give me the ability to retire at that age, or even earlier, for that matter.  Sure we are savers and have amassed a decent set of assets but not nearly enough to check out now.

I also keep thinking about all the posts that JD @ Get Rich Slowly has done on the 4 hour work week and reading about various people that have bucked the trend and are working on their terms.  Blogging for a living is a little scary and I can’t even begin to dream about that because I don’t have the readership, or revenues of some of the other guys that have actually done that.  The chicken in me also worries about what I would do if the income stream died off.  Frankly, it would be a lot harder to generate my current income level on my own than it is to just stay at my current job.

As I get a little bit older, I find myself wondering, "What’s the point of it all?"  I suppose this might be due to the fact that I’m not doing work that I’m passionate about.  I mean, do you know anyone that is passionate about doing process development and managing lots of customer expectations?  I don’t.  "Why don’t you do something that you are passionate about then?" you ask.  Well, probably because I don’t know what that is.  Frankly, I probably need the type of job where I’m out and about all day visiting customers.  I absolutely love dealing with people and working from home just doesn’t give me as much of that.

So, what are my options?  Well, I could sell everything I own and end up with a decent chunk of change that I could generate basic interest income off of.  It would probably give me enough to rent a modest apartment and buy basic necessities but the reality is that there are too many variables that could tank that plan.  I don’t have enough that I could take whatever life might throw at me and probably won’t for at least another ten years.  Even then, it would be a very modest lifestyle.

I’ve also thought a lot about selling our primary residence and living rent free at our lake house.  With the money I’m making online, interest income I could generate, and maybe a part time job, I could get by.  But then there is the issue of what kind of life that would be for my daughter.  Is it selfish of me to drastically adjust our lifestyle and potentially rob my daughter of opportunities later as she struggles to figure out how to pay for college etc?  That doesn’t really feel right either.

So, here I sit.  Wondering what the best solution would be for my family.  Wondering if I’ll live a long life and all of the working and saving now will pay off later.  Wondering if I’ll kick the bucket much sooner and then regret not having ever taken a big chance on another way of life.

No matter what happens, I am grateful for the lifestyle and way of life my family has today.  Don’t get me wrong.  If nothing changed for the rest of my life, I’m still very, very grateful for being where we are at.  I just can’t help but wonder what else there might be…….

For the last couple of years I’ve been thinking about when our furnace would finally quit.  The way my luck goes, it will die in the middle of winter so I decided to shop for a furnace during the slower months for heating companies.  I was able to work with two neighbors to pool our business together.  We had a few hvac companies come out and offered to give them all three jobs if they would give us a good price.  We finally got all the quotes and the winning bid was $1800 including installation and tax.  That’s a far cry from other neighbors that have been spending almost $3000 for the same.

Once we decided on a bid it was time to turn to the Internet to do a little research on the company.  All the googling I could do turned up no bad reviews or comments.  In fact, the only thing I could find was that the company, and specifically the person we talked to, was highly recommended by a realtor in our area.  I also checked the state labor and industries website to make sure there were no formal complaints or violations.  The website also confirmed that they have a bond on record and are insured.  Good enough for me.

They are coming out on Friday to do the installation.  Cross your fingers for me.

Gas prices suck.  For many people, who have built their lives around long distance travel and large vehicles, gas prices really suck.  I’ve been reading lots of articles about people who travel 120+ miles round trip to their jobs every day.  Ouch.  Most of those people aren’t driving hybrids either.  I’m sure just about everyone has made their way to the Internet looking for ways to improve their situations.  I know that I’ve been reading various posts about how to save gas.  So, what am I doing?  Here are the top 5 things that our family is doing to minimize our gas expenses:

1) Reduce the number of trips we make

This has been the number one easiest way to reduce our gasoline purchases.  Once you start paying attention, it’s really quite amazing how many driving trips you make that aren’t really necessary.  If you put a tiny bit of effort towards it, you can drastically reduce your gasoline consumption.  Here is an example:  Instead of zipping to the store for one or two items, we have made it a practice to only visit the grocery store when we are already taking another trip.  No more quick trips to the store for that impulse dessert.  The side effect of this is that we are saving gas and being forced to be more creative by whipping something up from the cupboard or refrigerator.

I’ve also reduced my driving in to work.  I am fortunate to be able to work from home on most days.  One of the ways I do this is through attending meetings virtually.  Once I’ve established a relationship with coworkers or customers, everyone is quite happy to do business virtually, at least part of the time.  I have only driven in to the office once in the last two weeks.  It’s worth talking to your boss if you have the type of job that could be done from more than one place.  Another option is to try to switch to a 4 day per week work schedule by working longer hours.  With gas prices so high many employers are being much more flexible about how their employees do their work.  It’s worth asking.

2) Carpool when going to events

In the old paradigm I never, ever carpooled.  I liked having the freedom of arriving and leaving on my terms.  Well, it’s a new world now.  Carpooling is now sexy.  I’ve actually heard people brag about saving gas by riding together.  That never happened before gas prices spiked.  Originally we had planned to drive ourselves to Montana in July.  The plan was to caravan with my mother and aunt, and also my sister’s family.  The main reason for not carpooling with my mother and aunt is that my mother has a large dog and all the dog hair that comes with having a large dog.  I’m allergic to animals, as well as just about everything else on the planet (My friends call me Bubble Boy) so being in her minivan for 13-14 hours would not work for me because of all the residual hair in the van.  I’d be in pretty bad shape by the time we reached our destination.  We can’t take our car because it is too small to hold everyone.  In the end we decided the smartest thing to do would be to rent a minivan and split it three ways.  Total cost of the rental is $300.  We’ll save far more than that on fuel so it just made sense.  Had gas prices not gone up so much, I’m not sure we would have come up with this optimum solution.  With gas prices so high, the first question we now ask is, "Do we need to take the trip and the second is, should we carpool?"

3) The driver that drives farthest takes the most fuel efficient car

My wife doesn’t have the luxury of working from home.  Because of this, she drives much more than I do.  It just so happens that her car is the most fuel efficient getting 25 miles per gallon.  It’s not great but it beats the 20 mpg that my Toyota Tacoma gets.  As a general rule we always use the Honda Accord unless we have a need to haul something.  This didn’t use to be the case.  We never really put much thought in to the gas mileage variation of the cars.  The reality is that if we get 5 extra miles per gallon in the Honda we can get an extra 70 miles per fill up.  That’s almost $12 per fill up that we are saving by simply choosing one car over the other.

4) Practice a few Hypermiling Techniques

I’m not about to scream around corners at 45 miles per hour to try to keep speed up and avoid brake usage but I am interested in doing all I can to adjust my driving to save a few bucks.  The number one thing I’m doing in this area is to minimize my foot on the gas pedal.  Don’t get me wrong, I don’t want to get run over by a 90 year old woman in her 1973 Dodge Dart, but I also don’t want to burn the rubber off my tires by tearing off the starting line.  When the light turns green these days I take it nice and easy.  I slowly apply gas and shift when the rpm’s hit a little over 2000 rpms.  The focus here is not to wind up the engine and cram fuel in to the engine like I just robbed a convenience store and the cops are hot on my tail.  I’m also trying to drive in the highest gear that keeps my speed constant with the lowest RPM’s.  When I hit hills, I put it in neutral and coast as far as I can with the engine at idle.  This seems like a safer approach than turning the engine off and still minimizes fuel usage.

5) Use a rewards card for fuel purchases

I posted about this earlier.  We have finally hopped on the rewards card bandwagon.  We chose an American Express card through Costco.  We went for the business card because the fuel rewards were much higher.  There doesn’t appear to be any criteria to go with a business card over a consumer card but we do have a long term Costco business membership that might have been used as the key criteria but I don’t know for sure.  The business card pays 5% back for fuel purchases at Costco or other regular gas stations.  We try to buy all of our fuel at Costco where it’s cheapest and then the 5% back on top of that really takes the price down.  We are getting almost $2.75 per fill up back.  This is clearly saving us a significant amount of money and it took the least amount of work.

Through small changes like this we are hoping to reduce the impact of high gas prices.  What’s interesting is that none of these changes really took any effort.  Through easy, simple changes to our routine we actually reduced our expenses and our carbon footprint.  Next on our list is to explore easy ways to lower our home utility bills.  I can tell you my current strategy is to cut usage of the central air conditioning by 50% this year.  It’s already working.  I’ve been making a much more concerted effort to open windows and create cross drafts before I consider turning on the A/C.  We used to keep the thermostat on "auto" so that it just did what was needed to maintain one temperature in the house.  By turning that off and tolerating a bit of temperature fluctuation, we are already seeing the reduction in our utility bill.

A friend of mine sent me his horoscope today.  It reads:

Wow.  I haven’t seen a horoscope so directed at consumerism before.  I think the horoscope gods should consider rotating this horoscope each month.  You can’t tell me that Taurus’ are the only ones that need to hear this message.

I am a huge fan of Google GrandCentral.  What is it?  GrandCentral gives you a phone number in the area of your choosing.  You can give that number out and route calls to any other phone.  When someone calls our GrandCentral number I have it ring our home, our cel phones and my laptop (Skype).  By using this number, our friends and family can reach us wherever we are.  If we happen to be at the lake, the calls come in on our laptop via Skype.  If we are out and about, we take the call on our cel phone.  If we answer it on the laptop and want to transfer the call to our cel phone, no problem.

An even better feature is the ability to make long distance calls via GrandCentral for no cost.  I have uploaded all of my contacts for home and work to the online address book. If I want to make a long distance call, I simply bring up that contact on the website and click the "call" button.  Instantaneously my home phone rings and when I pick up I can hear the phone ringing on the other end.  The person answers and we can talk as long as we like for FREE.  I’ve found myself using this feature for work a lot.  When I’m working in my home office and need to call someone out of my local calling area, I simply add them to GrandCentral (very quickly) and then push "call".

I’m anxious to see what new features they come out with next.  It’s hard to believe this service will last forever because I know they are paying the connection fees for all of those long distance calls.  I can only assume that they will be putting ads on the site etc to bring in revenue.

I’m also interested to check out the "Magic jack" product.  It’s not related to Google but I’ve been hearing a lot about it.  It sounds like it gives you the ability to use any phone to make long distance calls anywhere in the country for free.  You simply buy a little usb device that’s about the size of a matchbook and plug it in to the computer.  There is a standard phone jack (RJ11) on the end of that little device that you can plug any regular phone in to.  It’s that easy.  You simply pick up the phone and dial.  It costs $39.95 to buy the device and pay for the first year of service and then it’s $19.95 per year after that.  Wow.  That’s cheap.

Has anyone been using the Magic Jack?

I should also thank Jonathon at MyMoneyBlog for turning me on to Grandcentral and telling me how to get on the beta!!!

About 6 months or so ago my neighbor told me that he wanted to get rid of a weight set that was taking up space in his garage.  He had purchased this about 9 months before that and had probably paid in the neighborhood of $600-700 for everything.  I asked him how much he wanted for it and he said, "Oh, just give me $200 for it".  I did and thought it was a pretty good deal.  Back to the present.  I’ve decided to get rid of it since I haven’t been using it much.  I listed the package on Craigslist for $295 and people came out of the woodwork to buy it.  It should be sold by the end of the day today.  (Someone is coming to get it at 3:00 today after the previous buyer fell through).  My first thought was that I priced it too cheap but I’m happy to get rid of it and turn a nice profit.

That brings me to my question.  Should I feel guilty for "flipping" this weight set and making almost a $100 profit?  Should I consider splitting the profit with my neighbor?  Or should I just think, "He got it out of his garage and was happy to get $200 for it so I should consider us even".

What would you do?

Update: I told him what I got for it but didn’t offer to split it. He commented that he would have probably given it away in the first place just to get it out of the garage.