Tuesday, February 21, 2017

#FinancialFails – The Dishwasher Dilemma


I’ve found that it’s fun and easy to write about our financial successes. But what about our financial fails? Those are much harder to have the desire to write about. In an effort to try to stay fully open I’m going to break down and share a fail I experienced  had over the weekend.

About two weeks ago our dishwasher stopped draining. For the last few loads it had been getting progressively worse but finally stopped altogether this time.

When I realized that it wasn’t something that would just go away I started looking up DIY videos on YouTube. I was all excited to put together a great post about how I had this issue, watch a few YouTube videos, figured out how to fix the problem, and saved a ton of money on repairs by fixing it myself. But that was not the case.

When I got into it nothing seemed to go right. The videos that I had found were all on different models that didn’t look anything like ours. The only one that was remotely similar to our mechanical configurations came apart like a set of tinker toys for the guy. Ours was so old that all of the parts had sealed themselves together and nothing would budge. Things broke trying to get it to come apart so I finally took a chisel to one of the broken pieces that wouldn’t budge since it was already ruined. After I go that out of there the next piece wouldn’t cooperate either and I was going to have to remove it be force as well. To replace these pieces it would have been about $50 and a few days of shipping, and that’s just to get it put back together before addressing the draining problem it was having. By the time I gave up I was fuming mad at it and bout 5 hours into a problem that the YouTube guys solved in 10 minutes.

After talking it over we decided that we would probably have to replace it before selling the house anyways since it was having more and more frequent problems, so fixing it now would just be helping it to limp along. So we said, “screw it, we’re just going to replace it.” Each month we have been building up a savings fund for home remodeling projects that was up to $3,338 by now. We had planned to use this to knock out a wall, put down a fake hardwood floor, and eventually new countertops in the kitchen. So thankfully we already had the money set aside that could easily cover the cost of a kitchen appliance upgrade.

We are slow decision makers, especially when it comes to things we have to spend money on, so it took us about 2.5 hours of looking at Menard’s to finally make a decision on which one to buy. We ended up choosing this dishwasher in case you’re interested. I turned down the $59 delivery and installation offer, assuming that it wouldn’t be too daunting of a task. But after about 4 hours of working on installing it I was second guessing this choice. I finally did get everything put together but it was not a fun or easy experience. And to be honest, we still haven’t tested it out because I’m terrified that I inadvertently messed something up and it’s going to explode when we start using it.

Final Cost Breakdown:
Dishwasher – Regularly $599, on sale for $399
Parts for installation – $11.57
Storewide 11% Mail-in Rebate – $45.08 in-store credit
Total Cost to Replace Dishwasher – $392.42
I had gone into the store mentally prepared to spend $500 to replace it so it was a nice surprise to be able to keep that extra $100 in our account.

Could I have saved more money by finding a cheaper option? – Maybe, but it would have almost definitely been poorer quality.

Would it have been cheaper to have just called in a repairman in the first place – Probably, but it would have turned out more expensive if we had needed to replace it anyways.

Is it over and done with for good? – Definitely, unless I hooked something up wrong (knock on wood).

I hope this post has helped you realize that we are human to and sometimes we pay more for the convenience of not having to worry. We all make financial mistakes on this journey. I wish that breaking my washing machine instead of posting a repairman was the only mistake I've ever made, but it isn't. I'd be nice to turn this into a series. If you have a story you'd like to share please reach out and let us hear about it, you can be an anonymous poster of you're embarrassed to tell your story. Just email bandofsavers@gmail.com.

Thursday, February 16, 2017

Financial Advice From An Old Farmer


There was once an old farmer who was widely known for having the straightest rows of anyone around. When the other farmers would ask him how he was able to always make his rows so straight he would just smile and say, “You just gotta set a goal and stay focused on it.”

All the other farmers would go back to their farms at planting time, get in their tractors, and focus as hard as they could on making their rows straight. But every time they would get to the end of the quarter mile long field and turn around they could see that their rows would curve this way and that depending on the contour of the land. Eventually they all decided that the old farmer just had some sort of sixth sense when it came to making straight rows regardless of how the lay of the land tried to push him.

One year the old farmer decided that his grandson was old enough to start learning the secrets of his trade. He took him out to the fields and explained to him the importance of keeping his rows as straight as possible. He explained how it would allow them to fit in as much crop as possible and make harvesting easier. Then he set him up on the tractor seat and explained to him how to keep the tractor on course no matter what might come in the way.

“You see this line I drew down the front of the windshield. You pick out something on the other side of that there field to be your goal. Now you line up that line on the windshield right over it and drive. Don’t ever let the line deviate off of your goal. If you always stay focused on that goal you’ll have the straightest rows around.”

With that instruction the farmer left his grandson to start plowing his field while he ran some errands in town. But when he got back he was flabbergasted to see the winding rows that his grandson had made out in the field. In a fit of anger he walked up to his grandson and the conversation went something like this:

“Feller, I gave you a simply set of instructions. What happened? Why didn’t you do like I told you to.”

“But Papa, I did do just like you told me. I picked out a goal on the other side of the field, lined up that line on it and drove straight towards it, doing my best to never let my goal get away from the line.”

“If that were so then you would have nice straight rows instead of this rats nest of serpent trails.”

“I did just like you said. It ain’t my fault the rows turned out crooked. I would pick out one cow to line up on but the dang things would always start wandering off and making it awful hard to keep the line centered in on it.”

The old farmer had forgotten to mention a critical point. He had forgotten to tell his grandson that he needed to focus on an immovable goal that would always stay put, like a tree or fence post. Instead, the boy picked out a cow that lead him all over the place and wasted his time and effort.

I believe in the importance of setting goals and staying focused on them. Sometimes there will arise a need to change our goals as we mature or understand the world better. But when our goals are drastically changing every few years, months, weeks, etc. we find that we end up chasing them in circles and making a mess out of all of it. It’s never too late, or too early, to sit down and take some time to figure out what your big goals are so that you can set them in your sights and start working towards them.

For additional reading you can also take a look at these related articles:
                SMART Goal Setting
                Developing Your Action Outline
                Finding the Time to Work on Goals
                What is Your Motivation?
                Advice for Saving Money During the Holidays

Monday, February 13, 2017

How To Conquer Credit Card Debt


[I have another guest post for you today. I hope that you enjoy this advice from our friend Rebecca.]


For many Americans, it is far too easy to fall into credit card debt — and incredibly hard to work their way out of it.  With high interest rates and fees, it is no wonder that many people find it challenging to get out of credit card debt.  But eliminating credit card bills is far from impossible — it just takes time, patience and a smart strategy.

Paying off your credit card debt requires an individualized approach that is based on your own financial situation.  Here are some tips that you can use to get out of debt and be well on your way to a healthy financial future.


Stop Using Your Credit Card

Credit cards are convenient, especially in the era of online shopping, where everything is available with just a few clicks of a button or taps on a screen.  But the only way that you will ever conquer your credit card debt is to stop using it.

The larger your credit card balance is, the more you will be paying in interest each month.  And the more interest you are paying, the less able you are to pay off the principal.  If you continue to use your credit card, you will only add to the principal debt — and increase the interest amount that is due each month.

It may be painful to stop using a credit card and to rely solely on cash or a debit card.  But it is absolutely necessary if you want to pay off your cards.  Cut up your cards, lock them away, and delete them from your various online accounts.  Then you can start focusing on really paying down your debt, instead of continuing to add to the balance.

Make Room In Your Budget

To effectively conquer your credit card debt, you will need to make more than the minimum payment each month.  That may be tough if you feel that you are already stretched to the limit financially.  But if you take a close look at your spending, you may find ways to slash expenses so that you can devote more money to paying off your cards.

Start by tracking your daily spending, and then look for ways to eliminate unnecessary purchases. Are you spending $15 - $20 every day buying lunch at work or picking up coffee on your commute?  That is an easy expense to cut; you can simply pack a lunch and coffee instead.  If you were spending $15 dollars every day on these items, that adds up to $300 in a month — or $3,600 in a year.  That money can go a long way towards paying down a credit card balance.

Some daily and monthly expenses are harder to cut, but may be necessary if you are serious about getting out of debt.  Consider getting rid of cable, biking to work instead of driving, or revamping your grocery list. The money from each bill that you slash can be put directly towards your credit card debt. 

Finally, give up little luxuries until your credit card balances are gone.  For example, getting your hair professionally colored can be very pricey and requires regular upkeep.  Instead of going to a salon, color your hair at home for a fraction of the price.  Going out with friends is a lot of fun, but you can have a great time hosting people at your own home for far less money.  Remember that these sacrifices are ones that you are making for the short-term so that you can have more flexibility and stability in your budget in the long-term.

Consolidate Your Debt

For anyone with multiple credit card balances with high interest rates, a debt consolidation loan may be the way to go.  Consolidation will allow you to pay just one monthly bill and focus all of your efforts on paying it off, ideally with a much lower interest rate than what is currently offered by your credit card.

The key to effectively consolidating your debt is to do your research and choose wisely.  While the interest rate on a debt consolidation loan may be lower than your credit cards’ interest rates, fees could actually make it more expensive.  Look at the loan’s annual percentage rate, or APR, to determine what the true cost of the loan is.  Then compare it to your credit cards’ APRs, and make a decision based on these numbers. 

Paying off your credit card debt is not an easy task, but it is a rewarding one.  Getting your balances to zero can help you achieve your financial goals, and make for a much more secure financial future.

Monday, February 6, 2017

How To Pick The Right Wealth Management Company For You


Recently a friend of mine ours was searching for a wealth management company to help her out. After some extensive research she finally found one that seemed to fit all of her needs and has agreed to share a brief article about what she learned on the journey. Thanks Sam.


If you are starting to make good money, then you will invariably want to figure out what to do with it so that it won’t sit around doing nothing. The best and brightest all know that to increase your wealth, you have to make your money work for you, which is where top wealth management firms come in. Assuming that you don’t have all the free time necessary to maintain your funds on a full-time basis, trusting it to a wealth management company is the best way to go. But how can you find the right one? Here are three markers to determine the best company for you:

1.    Look for Added Value: It’s easy to fall into the trap of picking the management firm that has the lowest fees. However, a lower price doesn’t mean that you get the best value, and you could wind up with services that don’t help you succeed. Instead, compare all of the services and features that you will get from each management company, and then see which has the most value for the money. Make sure that the company will treat you and your money with the respect you deserve.

2.    Check References: If you look at the top wealth management firms, you will see that they all have a stellar reputation. They didn’t get to the top by mistreating their clients, which is why they come so highly recommended. When picking out a company, be sure to ask current and former clients how they view the business to see if it aligns with your values. Don’t rush into anything, and be sure to do your due diligence first.

3.    Check Payment Methods: As a rule, if you want to get the most out of your high net worth investment, you want to get a management company that values your business and will treat it like their own. What you want to avoid are firms that operate on commission, as they will be more focused on closing a sale than giving you the best options.

When it comes to managing your money, make sure that you pick a company that works for you. After all, it’s your money, so don’t trust it to just anyone.

Wednesday, February 1, 2017

Monthly Progress: January 2017


The first day of the month is always a big day for me with my personal finance spreadsheets. While I update them nearly every day there are a few things that I do and track on a monthly basis, so the first day of a new month means that I get to hard code the actuals of the previous month and see how we did. I LOVE IT!

So, how'd we do in January?

1)       Net worth: $198,570.18, up $6,437.24

I am a bit obsessive but I actually track my net worth every morning that I work, just because I love seeing the graph it makes and knowing what's going on, and it only takes me about 10 minutes using Personal Capital if I go slowly and analyze anything (if you’re not already using Personal Capital please click on the banner ad for them on the right of this article, they are 100% free and I love them and use their android app nearly every day). But over the past month our net worth has increased from $192,132.94 to $198,570.18, growing by a total of $6,437.24 for January.

This is going to be the month that we break the $200,000 barrier, I can feel it!

2)     Investment income: $2,856.26

Another detail that I measure on a monthly basis is how much we've made (or lost) due solely to our investments. This helps me to see what I would have to live off if I didn't work at all and choose to live exclusively off of investments, which is the goal. The current amount needed from investments each month is $2,600, which means that at a 4% withdrawal rate we would need roughly $780k in investments (easy calculation: $2,600*12*25=$780,000). On the first of every month I document what all of our investments are worth and back out the beginning value of the previous month and all of the investments that we made during the month.

In January we started with $117,307.04, invested $2,530.72 and ended the month with $122,693.75. Meaning that, in January, we gained $2,856.26 on our investments. Today I added another metric to track on this. In January we spent a total of $2,728.52 which means that, this month, we could have lived off of our investment income and had $127.74 left over to re-invest in next month.

Current ER date is being calculated out at 9/15/2033 (6,070 days left).


3)     Financial plan savings: $700.12

I'm not going to go into the details behind the calculations on this one since it's more lengthy but you can read more about it in my post about 
Our Current Financial Plan. But after all of our income, expenses and planned savings for the month we ended up with an extra $700.12 in our checking account to use for investing in our future.

We have actually made one small change from our previously stated plan and instead on dividing this 50/50 between our mortgage and Vanguard we have begun dividing it into 4 buckets, adding 2 more buckets for remodels and vacation as follows: Vanguard = 30%, Mortgage = 30%, Remodels = 30%, Vacations = 10%. So this time we invested $210.00 in our total stock market mutual fund VTSAX at Vanguard.

Then I called up my bank and scheduled a payment for an additional $210.00 to go to the principle on our mortgage. So after our regular mortgage payment that automatically pays on the 1st of each month and this extra payment our mortgage dropped down to $105,762.96 today. Which means that, as of today, we actually own 39.21% (roughly 737 sq. ft.) of our home. We bought 9 sq. ft. this month!

So, by and large our January turned out great. How did things go for you? 

And here's to having a great February ahead of us.

Monday, January 30, 2017

Saving Tips: Use OverDrive to Access Free Media


I got an awesome guest post for you today from an old friend of mine. He told me that he had a great idea for an article and made a special request to have it be article #100. And since I’ve never been able to tell Mr. Yazzie no, here he is. Take it away D.


Testing, testing, 1, 2, Can you hear me? Cool, I think this mic is working.

When my boy Roy here told me that he was running a blog about personal finances that is aimed at helping people understand more about money and how to live cheaply I told him that I would love to share any of my tips with him anytime. And today he started calling in that favor – hopefully you’ll be hearing a lot more from me in the future. You should leave a rating in the comments below to help convince Roy to have me on air site more often.

Here’s my first savings tip for you:

Use OverDrive to get Audiobooks, e-books, and movies for FREE

I work out in the oil patch, and most of the time I am by myself driving on dirt roads or checking out equipment that I could do in my sleep – don’t tell Uncle Williams. For a long time I use to listen to the radio when I was fortunate enough to be able to pick up a good station. I constantly felt bored at work and couldn’t imagine having to keep up the routine for the rest of my working life. But about 2 year ago I found a game changer and now I look forward to going to work and being out there by myself all day – don’t get me wrong, I’m still looking forward to retirement, but as long as I have to work this makes my gig not too bad.

What did I find? Peyote.

No, just playing, I don’t do drug. I foundOverDrive.com

It started when Roy convinced me to switch over toRepublic Wireless  and I was able to ditch my piece of sheep poop flip phone and upgrade to a smartphone for a ton less monies every month – I wanted to do a post about that but Roy told me he already did it. here  

A few months after getting my Moto G I was told about an app called OverDrive that would let me borrow free audio books from my library. So I decided to try it out.

All it took was to download the free OverDrive app, look up my local library, enter in my library card information and everything was set to go.

It took me a little while to explore it and learn how awesome it was but now I’m a pro and use it ALL THE TIME. I download free audiobooks on my phone to listen to at work, I’m just about to finish my 200thaudiobook in almost 2 years. I sometimes read borrow e-books to read on my tablet before bed. I stream movies through their website instead of renting or buying them. It’s amazing what they have access to.

Pros
-          You never have to worry about getting charged any late fees for anything because when it is due it simply gets returned to the library and disappears off of your personal bookshelf.
-          If you find something that you want to check out but it’s not available, that’s fine, you can just put it on hold and when it is available it will automatically be added to your account and they will send you a notification email that it belongs to you for the next 3 weeks.
-          You will never have to actually go to the library again.
-          If you have kids, you can set the maturity rating for anything that will show up as an option to borrow. The different ratings are: Juvenile, Young Adult, General Adult, and Mature Adult.
-          If you have accounts with multiple libraries you can register all of them and easily switch back and forth to see which library has what you want.
-          It’s FREE! I no longer have to pay for books and since I can stream thousands of movies I finally cut out all my cable and movie expenses, not even Netflix anymore.
-          Since I’m listening to all these books I feel like I’m actually learning things while I’m at work instead of just killing the time with music or silence.
Cons
-          I can’t think of any right now but if I find one I’ll let you know.
In case you are interested, I wanted to add a list of my favorite book that I’ve listened to on it so far: Born to Run, Natural Born Heroes, all of the Bernard Cornwell books, Furiously Happy, The Richest Man in Babylon, Your Money or Your Life, Dad is Fat, and The Risen.
So, if I have convinced you to go try out OverDrive for yourself please do me a favor and leave a comment below saying you’re going to try them. Nobody is getting paid by them, it’s a free site and Roy won’t collect and affiliate cash from them, I just want to know as a way of boosting my ego as a sales man. Something to put on my resume you know – “Salesman: Encouraged __ thousand people to test out a product.” Nobody has to know it was a free product right. ;)
I’m out Brother.
Mic Drop!

Don’t worry, it took me some time to get use to that joker as well. Hope you enjoyed the article and, more importantly, enjoy saving some cash of entertainment expenses by following his lead.

Saturday, January 28, 2017

Dow Breaks New Milestone!


On Wednesday the Dow Jones Industrial Average broke a new barrier. For the first time yet it crossed over the 20,000 point marker. This was a pretty big deal and it has Wall Street celebrating. The next day I saw the poll above that asked if you would be buying, selling, or holding now that the market was at record highs.

The problem I had with this poll is that it needed an option for those of us who don't plan to change our strategy. My investment strategy isn't dependant on how high or low the market gets. I invest in my 401(k) consistently throughout the year. On the first day of every month I invest in my Vanguard account on the first day of every month. This amount varies, but it is always as much as I feel the we can comfortably tie up in the market long-term.

Since I was in the category of holding my market strategy constant I selected the "It's time to hold" category. I'd like to think that three were several others in the 54% that make that selection that felt the same way.

While this was just a little survey that I ran across it did bring up a few concerns in my mind that I wanted to address. First, they are basing the timing of this question on the assumption that people will change their market strategy based on what the market is doing. But in the personal finance world everyone knows that the best strategy is to not try to time the market and to just consistently invest regardless of what is doing.

My second concern was that 17% of the 183,648 respondents said that it was time to buy. I can understand people saying that it's time to hold or sell but, unless you consistently buy for the long-term, it's not the best time to buy. My fear is that the majority of those 17% are thinking that the market is heading upward so they need to get in on it for fear of missing out on potential returns. Those are the people in danger here because they are sitting that they act on emotion and a hope to find the market, and history shows that they are the ones that consistently lose in the market.

My hope is that all of you out there don't get caught up in any of these common traps and will have the control to set a solid investing plan, sick with it, and let the market swings fade to background noise.

I'm sorry if this post seemed to ramble on a bit, I write it out on my phone real quickly while sitting in a meeting, and it's real hard to edit much on a phone post. But whether or not you found anything I said meaningful, I hope that you were able to at least look at the picture and gleen some valuable insights for yourself.