Funny Munny

Looking For the Festival of Frugality?

2006-04-17T22:06:00.000-04:00

If you're looking here for the Festival of Frugality, then you're in the wrong place! A few carnival pages haven't updated their links, but Funny Munny is now Punny Money and can be found at http://www.punny.org. Be sure to check out the Festival on Tuesday morning!

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carnivals

Punny Money Hosting Festival of Frugality on April 18th

2006-04-09T12:39:00.000-04:00

Yes, this blog has moved! The new name is Punny Money, and the new location is http://www.punny.org.

This will probably be my last entry in the old blog, so please be sure to update your bookmarks and feed readers. I really don't want to lose anyone in the transition!

Canadian Capitalist, one of my favorite personal finance bloggers, will be hosting the edition of the Festival of Frugality scheduled for Tuesday, April 11th. Submit your frugal news to one of the best carnival-hosters around!

The Festival of Frugality will be in my neck of the woods the following week (April 18th), so please check out this blog at its brand new location (http://www.punny.org) for all the details.

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carnivals

I'll Trade You This Fine Block of Cheese For Your Stinky Old House

2006-04-05T16:50:00.000-04:00

(WARNING! WARNING! If you're reading this, then you're still looking at the old site! Update your bookmarks and links to point to www.punny.org and your feed readers to the new RSS feed or, even better, the Feedburner feed! Thanks!)

I think that's the sort of offer you'd see if the housing market were exactly the opposite of its present situation. While a chunk of gouda may not get you a gooda house, many signs are finally pointing to a cooling housing market. How cool are we talking about here? I have yet to see two financial analysts make the same prediction about where housing prices will be a couple years from now, but some indications of a small to moderate decline are already popping up. An article at Kiplinger's Personal Finance hits on what I'm already seeing in this area.

The days are over when you can slap any home on the market and sell it for more than asking price. Now you have to find the pricing sweet spot and work harder to reel in a buyer.

Bad news for the many homeowners looking to sell a year or two from now, mixed news for homeowners looking for assessment drops to lessen their property taxes, and definitely good news for people like me who will be looking for a house soon.

While single-family homes and townhouses may weather the storm well, condo prices are sure to take a dive. For evidence, you can look about 1,000 feet from our apartment at a poor little end-unit condo that's been on the market since we moved here six months ago. Constructed in 2002, it cost its current owners just over $220,000 to buy then. Half a year ago, the list price was $450,000 for 2 bedrooms and 2-and-a-half baths. A while later, the price dropped to $415,000. Still no takers. As of today, it's sitting with a mouth-watering "Reduced!" sign at an asking price of $390,000. Now maybe the owners were crazy for asking for $450,000 when slightly smaller townhouses across the street are selling for that much, but at least there hasn't been anybody foolish enough to fork over that amount.

My curiosity is eager for that bad boy to sell and show this town that the days of insane housing prices are over. I predict a final sale price of $375,000... if it sells in the next few months. If not, then the floor's the limit!

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housing

Reason #241 Why I'm Done With Blogger

2006-04-03T22:40:00.000-04:00

You may have noticed the lack of new articles on Funny Munny in the last week. I assure you, it's not for lack of trying...

Apparently my blog has the characteristics of a splog, at least according to Blogger.

That's okay; I get the message. I know when I'm not wanted.

Please update your bookmarks, blogrolls, and financial reliquaries and join Punny Money at its new home...

punny.org

I'll post a few more updates here, but I've updated my FeedBurner feed to point to punny.org, and that's where all the action will be going down from now on.

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Personal Update: Financial Funk, Credit Slam Dunk, and Unloading Some Junk

2006-04-03T19:37:00.000-04:00

Another largely uneventful month for our personal financial situation. The big arrow o' money is still pointing in the up direction. It's worth noting that I had an interview for a position at a different location in my company. My manager (and his manager, and his manager) asked me to give the place a shot, but I didn't even wait for an offer after the interview to say "hell no." My current place is happy to keep me (and I'm happy to keep my six-minute commute), and there were just too many negatives about the other position to make it worth consideration at just about any pay rate.

Our net worth went up just under 7% (+$2,621) for March. I'm still kinda shocked that I even make that much, let alone that much plus what it costs to live. I guess that college education is paying off very well. Stay in school, kids. And drink your Ovaltine.

One minor adjustment I made this month was to my W-4. Yes, I finally updated the darn thing to reflect that I'm married. So instead of getting a massive $6,000+ refund at the end of the year like last year, I should be seeing about $100 extra each week in my paycheck. (Sure enough, I am!) While I'll miss the feeling of seeing my net worth go up by a big chunk every February, I won't miss giving the government an interest-free loan, and I will definitely like seeing my weekly paycheck take a considerable jump.

Some happy news on the credit card front. We added the Citi mtvU Visa, Chase Cash Plus Rewards MasterCard, and Discover Platinum to our lineup this month. The Citi mtvU card, which is in Tegan's name, is infamous for its student-only status but is well worth it for the 5% cash back at restaurants, bookstores (including most Amazon.com purchases), and movies. The Chase Cash Plus card will be used for its 5% back at grocery stores (which we'll go to if these stupid storms ever end!), and the Discover will sit around and wait for a good "Get More" rebate deal (the current deal is 5% back at various automotive stores).

Tegan and I will be driving a car-load of junk up to my dad's house on Saturday. They have a garage sale twice a year, and we still have a ton of stuff we'd like to unload. Don't worry, I'll be setting aside some stuff that I'd like to eBay, so you all will have a chance to own one of our priceless treasures. Priceless until I put a price on them, that is. Then they're a dollar each or five for $4!

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Bloggin' On Up, Part 3: Picking the Perfect Domain Name

2006-04-03T17:44:00.000-04:00

Yup, I'm switching up the order of posts I had planned here because it's taking me a bit longer to get the new website looking how I want it to look. In the meantime, I can share with you my strategeries for choosing an awesome domain name to complement your fantastic new website.

Domain Names: Why You Need One

Before you start thinking about what your new domain name should be, you should convince yourself why you need one. Fortunately, the reason is simple. All the disk space and bandwidth in the world won't do you any good unless people actually find your site. How do they do that? Likely many of your visitors will find their way to your blog or website through links on other blogs or websites. And while you might draw in a big crowd for a particularly juicy piece of content, you're probably hoping that many of them will return. But how will they remember you? How will your existence to them be more than a fleeting memory? If you're lucky, they'll bookmark your site or add it to their RSS feed reader and visit it again later.

Compare the problem of attracting repeat visitors to that of companies trying to draw in repeat shoppers for their products. When you have 37 different kinds of laundry detergent to choose from, how does a company get you to keep choosing theirs over the others? Part of it is quality--people will stick with products they know work. Similarly, people will revisit websites with quality content. But what if all 37 different kinds of laundry detergent work just as well? In some cases, it could very well come down to a name. Assuming equal quality and price, are you going to pick a detergent called Zip! or one called Laundry Detergent Formula? Given the choice, the majority of people would go with Zip! It sounds more exciting, and they'll buy it hoping that Zip! will make a difference in their otherwise dreary lives.

In the same manner, you will find that your domain name quickly becomes your "brand name." When a person thinks about your website's content, they'll associate it with your domain name. And the easier your website's domain name is to remember, the easier it will be for them to make that association. That's why subdomains under a free host don't work; when you're blogging from ILovePorkAndBeans.blogspot.com, you've got two "brand names" working there--yours and Blogger's. If someone runs a competing website at ILovePorkAndBeans.com, they will automatically come off as more professional even before you consider the content of their site.

Granted, there are many fantastic websites hosted by Blog*Spot.com (see the links menu for just a few of them). Domain names aren't free, either; you'll generally have to pay five or ten dollars a year for your own .com address (sometimes far, far more). But it's a good investment because having your own domain name helps build and strengthen your brand image.

How to Pick Your Name

Selecting your domain name can be extremely simple or groin-grabbingly hard. If you're lucky, you can just follow these steps and you'll have your new domain name.

Think of your website's name. (If you already have one, like a Blogger blog you want to move to a paid host, this should be simple.)

Add a .com to it.

That's how easy it is for some people who decide to leave their free hosting service and explore the option of hosting their own site. There are many cases, however, where you can't or shouldn't follow these steps. Perhaps YourName.com is taken. Or maybe your website's name is something long like "Hi, This Is My Website and It's So Freakin' Cool" so YourName.com would be obviously impractical (more on long domain names in a minute). Or maybe you're starting a new site or willing to ditch your current title and you need a new name. If any of these apply to you, you'll be looking to start fresh. And if that includes you, there's just one rule to remember for picking a domain name...

Rule #1: Your domain name should be your website's name with a .com at the end of it.

You're on your own coming up with a name for your website since you best know the subject of your website. (That said, feel free to ask me for suggestions if you have a site in mind and need a good name.) You should try your absolute best to come up with a title that describes the content of your site and/or provokes the interest of your readers. Once you have that name for your website, you should register that name (or part of that name) with a .com at the end of it. If the .com is already taken, you will probably want to come up with another name. There are, however, exceptions that make .org (and .net or .us to a lesser extent) an acceptable alternative.

Rule #1a: Failing Rule #1, your domain name should be a .com related to your subject.

Maybe you're absolutely set on a name but it's either a long one (say, more than 10 characters) or it's already taken. That's okay; you have an alternative. While YourName.com would be ideal, you can also try YourSubject.com. If your website is called "Tasty Vegetable Recipes," then carrots.com would not be a very bad domain name to have at all.

Rule #1b: Failing Rule #1a, your domain name should be a short .com.

(Yeah, I'm kinda stretching that "one rule" thing I said earlier.) As with the situation in Rule #1a, you might have a great name for your website but it's either impractical or impossible to register its .com equivalent. It might also be hard to find a related word to .com-ize. In these cases, you might be best off coming up with a new name. Alternatively, you can settle for something short. If your site will be called "Bob's Blog of Bananas," go for something like bbb.com or bbob.com. While people may not immediately connect the acronym with your site's name, a short, seemingly unrelated domain name will be easier to remember than a long, definitely unrelated one.

Speaking of short domain names, I generally like to keep my domain names under eight characters anyway (preferrably under six). Under no circumstances should your domain name exceed 20 characters since you can probably come up with a shorter, easier to type subset of your name to .com-ize instead. While most repeat visitors will be clicking a bookmark to come to your site, some people may not use bookmarks (or not have theirs handy) and will need to rely on their memory and ability to type and spell to find your site. If your name exceeds even 15 characters, you're probably start missing out on visits from manual typing of your name.

Rule #1c: Failing Rule #1b, go with Rule #1, #1a, or #1b but substitute a .org (or maybe a .net or .us) instead.

There are very few reasons you should go with something other than a .com extension for your domain name. Even if you're a non-profit organization or from another country, you should try to stick with a .com if at all possible. There are a few exceptions that make it okay to go with another extension. The first is if you have a domain name in mind that meets all three of the rules above but the .com is taken. In this case, you may still want to think about looking for a new domain name. But if the .com is either not in use (but still owned by someone else) or completely unrelated to your subject, then going with the .org is okay. Why .org over .net and .us? Simply, .org sites are generally more closely associated with providing content (like Craigslist, The Internet Archive, and The Open Directory Project) while .net and .us sites are usually services (like MS Passport, Comcast, and ImageShack). Still, if both the .com and .org are taken, don't let me stop you from yoinking the .net or .us. Absolutely stay away from all other domain extensions. Period. Exclamation point!

If you're looking for more information on what .coms other people are registering, Dennis Forbes has an in-depth analysis of all the .com addresses currently registered.

Where to Register Your Name

Once you have your name picked out, you've gotta spend a few bucks to grab it. Unlike the web hosting itself where quality can vary wildly from host to host, most of the big-name domain registrars will give you the same quality of service and selection of tools as every other registrar. If you simply must go with a "top" domain registrar, here's a site that lists them by registrations sold. For the most part, you just want a domain pointing at your website without a lot of bells and whistles. In that case, you'll probably end up at since they dominate the registrar industry.

Beware of web hosts who offer free domain registrations with your web hosting package. Sometimes the domain registration is only good for one year and then the host will charge you more than the average registrar price for subsequent years. You always have the option of continuing to host with them and transferring your domain to a different registrar, but people often don't bother and just settle for the higher price to avoid the hassle of transferring. While you should take the free year if it's offered, try to overcome the status quo when the second year's bill hits you.

FunnyMunny.huh?

At this point, I've got my new domain name picked out and registered. While I'm going to hold off revealing it until the new site is ready for business, I will mention that it falls under Rule #1c. I grabbed a .org because the .com was taken (though not being put to any real use) and I really liked the name. No, it's not FunnyMunny.org (even though FunnyMunny.com is taken by someone else).

As a side note, a couple people have asked me what "kweee" means. It's the handle I usually go by on the internet. It doesn't really mean anything (though I do give it a meaning when asked), and I registered this blog before I knew what I'd do with it. I do own kweee.com, but it just points at this Blog*Spot blog for now. The new site will have a new name and a new domain, and I promise that both will totally rock your computer box.

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blogging

You Don't Want Our Credit Card? You Must Not Speak English!

2006-03-27T18:35:00.000-05:00

Lately Chase has been sending me credit card offers of average quality but in massive quantities. They must be absolutely astonished that I haven't responded to any of their offers! In fact, they're so shocked at my lack of interest in their cards that they've determined I need a translator...

Sorry, Chase, but I'm only fluent in Awesome, and you're not speaking my language.

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credit

Bloggin' On Up, Part 2: Hello New Host!

2006-03-23T20:01:00.000-05:00

Bloggin' on up! (Bloggin' on up.) To the east side. (To the east side.) We finally got a deee-cent website.

In the first part of this series, I shared my raging disgust with Blogger and my desire to move Funny Munny to a quality web hosting service. I shared my reasons for moving (including the need for better quality and cooler web toys) and my reasons for not moving sooner (like the cost issue and the whole trouble of setting things up). Today, it's time to start with step two of the conversion process: procrastinating for a few weeks and then giving up on the whole thing. Hahaha, just kidding. Step two involves finding a good hosting service that can handle the sheer awesomeness that is Funny Munny.

Super-Hard Terms You Should Know

While you can learn just about all the technology terms you'll need to know from this Weebl & Bob cartoon, I'll give you a few more just to get you started on the road to web hosting honor and glory!

Disk Storage. Usually given in Megabytes (MB) or Gigglebytes (GB), this is the measure of how much total garbage quality content you can fit on your blog. If you're planning a mostly text blog, you might be able to last years on just a few dozen MB. But if you want to include fancy things like pictures and podcasts and decorative woodworking, you'll want a whole bunch more MBs or maybe even some GBs.

Bandwidth. It's one thing to have a website sitting somewhere on the internet, and it's a whole 'nother thing for people to be able to view your website on their computer boxes. When people access your content, they are using your bandwidth. Bandwidth is usually measured in the same MB and GB units as disk storage, but you'll typically need a whole lot more bandwidth if you intend to have more than one viewer.

MySQL. MySQL? YourSQL? OurSQL? Whatever you call it, you will probably need this. It's the platform on which your website's database will run. What's that? You don't think you need a database? Okay, so maybe you're not planning to inventory your socks and ties, but databases are what keep the internet from becoming a mess of text files. Your blog software will likely require a database in which to store all of your information--your blog post text, your categories, your links to Funny Munny, etc.

POP/IMAP/Webmail. There are many names for it, but they all mean the same thing: e-mail. If you'll be running your site on www.mysuckywebsitename.com, you'll be able to set up e-mail accounts like loser@mysuckywebsitename.com and big_loser@mysuckywebsitename.com. Note that e-mail forwarding is different--it only forwards e-mails destined for your website addresses to another address you specify. You'll probably want at least one @yourdomain.com addresses because it helps you look more professional than using a GMail or Yahoo! or AOL e-mail account.

Domains/subdomains. A lot of cheap web hosting services limit the number of ways you can subdivide your allocated disk storage and bandwidth among different domain names. If a hosting service says you can host three domains with one account, that means you can split up your resources and pretend you have three separate accounts. Alternately, there are subdomains which allow you to do things like mydumbsubdomain.mysuckywebsitename.com. My advice: find a service that provides you with the option of hosting multiple domains in case you ever decide to start a second or third or fourth website; that way, you can just use your existing space to host it at no additional cost (except for the new domain name).

Perl, PHP, CGI, SSI... The funny looking acronym parade begins! Most of these are either web programming languages in which blog software is usually written (PHP is probably the most commonly used) or various protocols needed to support those languages (like CGI and SSI). Any webhost worth its salt will have all of these along with pre-installed scripts that will make it easy for you to generate a basic setup. You'll want Perl because there are some really nifty scripts out there written only in Perl.

FTP. If a web host does not allow you to upload to your website via FTP (File Transfer Protocol), run--don't walk--to another service. You will absolutely need this to get started. While sophisticated blogging software will provide you with automated web-based forms to help you upload your content (including text, pictures, and various multimedia), FTP is the easiest way to get access to your web storage. If you see "anonymous FTP," this isn't something you need unless you have plans to allow anyone to upload stuff to your webspace. There are people who use anonymous FTP, but we're not one of them.

UNIX shell. It is increasingly common that you'll see this is an available feature in web hosting packages. While you can run a highly successful website without ever once using your UNIX shell access, it can be extremely helpful for more advanced purposes. The UNIX shell provides you with a command-line interface to tons of useful tools for monitoring and tweaking your website. Again, you can do everything you'll need with FTP and web-based scripts, but a UNIX shell just gives you a bit of extra power over your web hosting experience.

There are plenty of other terms you'll see web hosts throw at you, but these are the ones you should really be interested in.

What To Look For in a Web Hosting Service

Now that we understand the vocabulary, let's apply it to our search for a web hosting service. So just what does our future web host need to have in order to support our cool-tastic website?

Stuff that lets you do what you need to do. If you're looking to set up a blog on your own hosting service, you'll need to make sure it has the basics. You'll need disk storage (even super-cheap services come with 100+ MB nowadays, but you may wish to secure a few GB or more for the future); lots of bandwidth (while you won't know just how much you'll need until you really need it, I'd recommend 10 GB a month minimum with the ability to increase if you need to); acronymic tools like PHP, MySQL, FTP, CGI, SSI, POP/IMAP, and maybe UNIX; multiple hosted domains (subdomains wouldn't hurt, either); and a web-based control panel to help you run everything (the most popular being Cpanel, but there are many nice ones available). If you have these things, you'll be able to accomplish just about everything you can imagine doing with your website.

A domain name. Many web hosting services will include a free one-year domain name registration with your web hosting purchase. That's because domain names are dirt cheap now. Even if your host doesn't give you a domain, you can purchase one from somewhere like Yahoo! or GoDaddy for just a few bucks a year. Do not settle for a website address like yourname.yourwebhostname.com. All the fun toys in the world (your website) won't help you become friends with the neighborhood kids if your house (your website address) is an ugly piece of junk borrowed from someone else.

Quality service. Most services provide only e-mail support for your questions and problems, and that's probably the best you can hope for without spending a ton of extra money. That e-mail support should be 24x7x365, though even if a host advertises this, you'll have no way of knowing their turnaround time and helpfulness until you experience your first problem. Or maybe you do! Trying Googling for reviews of your potential web hosting service and check out the online forum for discussing webhosts at WebHostingTalk. Keep in mind as you're reading reviews of web hosting services that most people generally only post "reviews" when they want to complain about a service. Every web hosting service in the world will have issues; but for every person who complains that they have the world's worst web host, there are probably ten people who have absolutely no problems with it. Be sure to read their specific complaints and look for patterns that might point to a real problem with the web hosting company.

A good price. How much should you pay for your web hosting? You can use the calculator found at FindMyHosting.com to compare various plans and their prices. Some decent plans start as low as $1 a month, while dedicated services can run hundreds of dollars a month. While a ridiculously low price can indicate shoddy service, you won't want to pay more than you need to for your hosting. Most blogs of mild to moderate popularity can get by with a service that costs under $8 a month. I've personally used services that cost anywhere from $2 a month (and still do!) to $15 a month (but that was years ago when hosting was really expensive).

A money-back guarantee. This is absolutely required. At a minimum, your host should offer a full return of your money within the first 30 days (60-90 is much better, though). Every so often, somebody will get really screwed over by a hosting service, and it's usually obvious within the first week or two. A money-back guarantee with no strings attached is a must no matter how reputable your hosting provider is. I've never needed to use such a guarantee, but it's reassuring to know it's there. These come pretty much standard from most hosts now, so pass by anyone who doesn't offer one.

Room to grow. Hopefully your website will become a big success before long, but that means you'll probably need things like extra storage space and especially extra bandwidth. You'll want a host that will upgrade your account to a bigger (though more costly) hosting option on demand. A few hosting services now go as far as to automatically increase your account's limits over time. Just be sure that you have a way to expand if you need to so you don't necessarily have to pack up and move to a new host when you hit the limits of your old one.

The depth of their own website. It pains me to say this, but anyone with half a brain can run their own web hosting service. In fact, there are many people with only half a brain that do! You can tell the real professionals from the wannabe resellers by the quality of their own website. Navigate through your potential host's pages. Look at their design and the tools they offer. Does your web host have its own public support forum? (This is a major, major plus in my book since it offers current hostees the opportunity to share their experiences with those shopping around.) Also take a look at their jobs/careers page. If there isn't one, you're likely looking at a one-man reselling operation which can have iffy quality (depending on who the real hosting service is). If there is one, check out what they're offering their employees. Heck, make a fake job inquiry if you like! If your web host has happy employees who are paid well and enjoy their job, this will benefit you a thousand times over if you host your website with them.

There is one other extremely important thing to consider when selecting a host--something the hosts themselves won't mention to you... until they're shutting you down for it. Since your web hosting space will reside on a machine used by many other hostees, you'll be sharing the machine's resources with others. No hosting plan will mention a limitation on CPU usage, but it's one thing you can't have unlimited amounts of unless you're on your own server. CPU is a little trickier to measure, and while most hosts have a limit on how much you can use, very few will actually tell you what it is until you reach it. One host I'm looking at likes for each of its hostees to stay below 60 CPU minutes per day. That means your webpages, scripts, and whatever else you've got going on should not be keeping the server's computing component busy for more than 1/24 of the time. Unlike disk space and bandwidth which you'll know how much you're using based on how big your files are, you won't know how much CPU your stuff uses until it actually runs. Both fortunately and unfortunately, most hosts take a "shoot first, ask questions later" approach to CPU-intensive hostees. If you have a script running in your space that's tying up the CPU, you can stay well under your disk and bandwidth limits and still have your website suspended for CPU usage. While most hosted sites will never have to worry about overutilizing the CPU, if your site gets taken offline because your host says you're using too much CPU, you're in for a world of hurt because it can be very difficult to find the culprit.

I'll talk more on avoiding CPU overutilization in an upcoming part of the series.

The Contenders

I've gone through about a hundred potential hosts looking for the things I mentioned in the list above. Some didn't have the basics down. Others had too many bad reviews or obvious problems with customer service. Some may have been terrific services, but their own websites turned me off for one reason or another. In the end, I picked out the three web hosting providers who will compete to become... America's... Next... Top... Model... I mean... Web... Host.

A lot of personal finance bloggers swear by these guys (though I sometimes question their motivation for doing so; more on that in a bit). Does their service really live up to the name?

The Good

Price. If you visit Dreamhost's website, you'll see that their basic plan starts at just under $8 a month. I suspect, however, that very few people actually pay that amount their first year of hosting with Dreamhost. That's because there are numerous e-coupons around that knock the cost of your first year of hosting to nearly nothing.

So much stuff! The basic Dreamhost plan comes with 20 GB of storage and 1,000 GB of monthly bandwidth. In addition, Dreamhost automatically increases your storage by 160 MB and monthly bandwidth by 8 GB every week! They also include all the required tools a blogger will need, and they even throw in a free one-year domain registration and allow you to subdivide your space into an unlimited number of websites. This is easily one of the best price-to-stuff ratios I've seen from a webhost.

Their website. The basic front page of Dreamhost's own website is, well, basic. The really good stuff lies deeper in the website; they have their own support wiki that anyone can edit as well as a public discussion forum. They also seem to give their employees a nice place to work.

Lengthy money-back guarantee. It's worth mentioning in its own bullet point that Dreamhost offers a 97-day money-back guarantee. This is about triple the standard money-back period. From what I've read, people have had little or no problem getting their money back from Dreamhost when they wanted to.

The Bad

Price. Oops, I'm crazy! No, you're not misreading; I put "Price" in both the good and the bad. While you might get your first year of Dreamhosting for next to nothing, the second and subsequent years will likely cost you at least $120/year. That's because there are no known coupons for hosting renewals. Some people report success with free domain registration renewal, and a few people have gotten gift certificate codes ranging from $10-40 when they threatened to leave Dreamhost, but you should plan to cough up the regular price from the start of year two onward if you stick with Dreamhost.

Sneaky referrals. This is a good thing once you're actually hosted by Dreamhost, but it's really bad when you're outside looking in. Many web hosting providers allow hostees to make money by referring new customers to them. Dreamhost makes the referral process too easy. Anyone with a Dreamhost account can generate a plain-English coupon code that will get a new customer X number of dollars off their first year--money that goes straight to the referring web host. Rarely do I see such generated codes come with the disclaimers that 1) the code belongs to them and will automatically make them a big chunk of money if you use it, and 2) it's not even the best code out there! Indeed, the 777 code (a non-referral code given out by Dreamhost itself) yields the best discount.

So much stuff! Okay, I've really got to stop duplicating my good items in the bad list. When you consider all the stuff that Dreamhost offers, you can see two problems. First, if everyone hosting with Dreamhost used every last MB of space and bandwidth, Dreamhost would go bankrupt overnight. They are offering all that stuff to you in the hopes that you won't use very much of it! Second, all that stuff for so little money suggests they might not be using the best quality equipment and communication services on their end. Still, this is all speculation, and you really can't know about the service unless you talk to people who use it...

Reviews. As you can expect, there are plenty of people with bad things to say about Dreamhost. The two big criticisms seem to reflect recent disappointments with their customer service and operating speed. Browse through Dreamhost's own forums and you'll find plenty of people upset that their troubles have not been handled for hours or even days. There are also plenty of people who will point out that Dreamhost is likely overselling their services. That means they're trying to cram as many customers into their hosting resources as possible (and them some!).

A little bit newer than Dreamhost, Lunarpages is the shared hosting spin-off of web services goliath Add2Net.

The Good

Quality of service. Out of the three candidates, Lunarpages' customers seem to have the most positive things to say about their experiences. These guys also have their own public support forums. These forums seem a little more interactive and friendly than the other web hosting forums I've read. In short, it looks like Lunarpages has a lot of very happy clients.

Their website. Absolutely the best website of the three candidates. Information is presented in a very organized, attractive manner. I'm a little disappointed by their job listings page, but the Lunarpages employees who have posted on the forums seem to be happy where they work.

Their stuff. Lunarpages' basic plan offers a more realistic but still generous package of space (5GB) and bandwidth (400 GB/month) along with just about all of the standard tools. Telephone support during regular business hours is included on all Lunarpages plans (something Dreamhost's basic plan sorely lacks). A few features are noticeably absent from Lunarpages' basic plan including ASP and JSP support (though that's not something I or most bloggers would need) as well as one critical option that's worth its own bullet point in The Bad section below.

Price. At $6.95 a month, a first-year plan with Lunarpages will run far more than one with Dreamhost. Starting with year two, Lunarpages' price drops below Dreamhost's regular price, so the difference would even out after a few years with Lunarpages. To me, a steady price over the life of service says that Lunarpages is looking more to service existing customers than to snatch up as many new ones as possible even at the risk of overselling.

The Bad

The DDoS attacks. A few months ago, Lunarpages experienced some devastating deliberate denial of service (DDoS) attacks that severely impacted their web hosting services for lengthy periods of time. Lunarpages says it has since installed extra protection against such attacks, and it does seem that the DDoSes have instead turned to other web hosting services. While not Lunarpages' fault, it still leaves a bit of a bad taste in my mouth.

Shorter money-back guarantee. You only have 30 days to ask for your money back if you're not satisfied with Lunarpages' services. While you would think that's plenty of time to evaluate a web host, you'd be surprised what kind of problems can crop up in months two and three.

No UNIX shell!!! This is a big minus for me. While I don't need access to a UNIX shell, I really want the extra control over my web hosting experience that one would provide. I can understand why Lunarpages doesn't provide one--it's a security risk, so extra (i.e. more expensive) measures must be taken to operate one.

A relatively new player on the web hosting field, Hostgator has quickly earned a reputation as a top service provider.

The Good

Reviews. I've read a lot of reviews by customers who are thrilled with their Hostgator experience--at least as many as I have for Lunarpages.

Brains. From reading Hostgator's support forums, I got the feeling that they have a lot of brainpower on their staff. The responses I've seen to people's questions and problems have all been intelligent and thoughtful.

Top-notch phone support. One-upping Lunarpages, Hostgator offers 24x7x365 phone support as well as the ability to obtain support through the conventional methods (e-mails and trouble tickets) as well as less conventional means (AIM messaging, for instance).

The Bad

Their stuff and price. If you take a look at Hostgator's hosting plans page, you'll see something a little upsetting. Their most basic plan, called "Hatchling," only runs $6.95 a month; however, there are a few things missing from this plan that makes Lunarpages' $6.95 plan stand out more. First, the uptime is only promised to be 99.5%, so an outage of up to 3.5 hours per month would be acceptable under this plan. Second, this plan limits you to hosting just one domain per account. If you're planning to subdivide your space (as I am), this is a big limitation. Hostgator's next plan up, called "Baby," runs $9.95/month. It tops Lunarpages by offering unlimited domain hosting per account (Lunarpages' limits to 10 per $6.95 account), but it doesn't crack Lunarpages' space and bandwidth offering.

Shorter money-back guarantee. Like Lunarpages, you only have 30 days to get your cash back from Hostgator if you're unhappy. Really, for their prices and quality of service, I don't think either Lunarpages of Hostgator should have any trouble matching Dreamhost's 97-day promise.

No UNIX shell!!! Again, you don't need it, and I don't need it, but I want it... a lot. For $9.95 a month, Hostgator should have thrown this in for free.

Their website. It's not ugly or anything, but it's the least attractive of the three candidates' sites. It is functional and gets the job done, but some people are impressed with pretty designs. I'll try not to let this affect my decision too much.

The ULTIMATE CHAMPION OF THE WEB HOSTING UNIVERSE!

I actually changed my mind between all three of these hosts at least twice just while writing up this article. In the end, I had to go with Dreamhost. While it seems they may be overselling their services, I've seen no such evidence of that from the other bloggers I read who I know are hosted by Dreamhost. And while I would've liked some sort of telephone support like Lunarpages and Hostgator offer, Dreamhost's full UNIX shell is too much for my inner geek to resist. I've seen some positive efforts in the forums by Dreamhost's tech team to improve connection speeds for those who have had problems. So I'll give Dreamhost a try confident that I'll have no problem getting my money back within 97 days if I'm unhappy.

In case you're curious, Lunarpages is my first runner up should Dreamhost not be able to fulfill its duties as Miss USA. (Heh, I can picture a little server wearing a tiara and an evening gown. That's kinda hot, don't you think?)

Off I go to place my order! Next time, I'll share my experiences with setting up shop at my new host. In a later part of the series, I'll also post my strategies for domain name selection. Oops, I guess I better start thinking about one of those. I wonder if NickIsTheAwesomestGuyOnTheWholeFreakinInternet.com is taken...

Bloggin' On Up, Part 1: So Long Blogger!

2006-03-20T23:09:00.000-05:00

Well I'm bloggin' on up! (Bloggin' on up!) To the east side! (To the east side!) To a deee-luxe web server in the skyyyyyyy.

While Funny Munny is only a few months old, I feel that it's already outgrown Blogger. Ever since I read Jonathan's story about moving MyMoneyBlog from Blogger, I've been debating the move to a paid web host; but now the arguments for the move outweigh the arguments against. Just what are those arguments? I'm not going to tell you!

Hmm, this post came to a rather sudden conclusion...

Okay, then I am going to tell you! You're so lucky!

Why Should Funny Munny Move to a Web Host?

Because Blogger = Pffft! Once Google acquired Blogger, the consensus was that Blogger would receive the Golden Touch of Google and it would become the most awesome piece of bloggy goodness in the whole wide world. That was three years ago, and Blogger has yet to be touched by the angels of Mountain View, California. For goodness sake, it doesn't have basic blogging concepts like categories and trackback support. On top of that, blogs hosted at Blog*Spot have the nasty habit of breaking whenever somebody sneezes. Of course, what do you expect of free, ad-less blog hosting? Still, the quality of Blogger and Blog*Spot, even at no cost to me, is just too low below my junk tolerance threshold to be ignored any longer.

Professionalism Demands It! While I'll admit this blog is not quite the epitome of professionalism, it is the epitome of awesomeness, and such awesomeness needs lots of open space, fun toys, and a balanced diet of cool stuff in order to thrive. As kweee.blogspot.com, I just can't help but feel a little trapped. Sure there are a ton of high-quality, professional bloggers who use Blog*Spot, but for each one of them, there are 50 more "LIKE OMG I SAW A CUTE BOY 2DAY AND HE SAID HI TO ME AND OMG OMG OMG" right beside them.

I Need Cooler Toys (And A Bigger Toy Chest). Blogger's customizable layouts are pretty nice, and I was perfectly happy with mine until the last couple of weeks. I tried adding a couple of extra features to my sidebar and I couldn't get them working in Blogger. It was simple stuff that should have worked effortlessly, too! Then I started doing a few posts with HTML tables; don't even get me started about what Blogger did with those tables. And for reasons unknown, my sidebar contents now hang out at the bottom of the page in Internet Explorer. In short, I need a flexible web host that will let me do the cool things I can do with Perl, PHP, Ruby on Rails, and all the other nifty stuff that makes the internet so pretty.

Other Projects. I've been running websites that I built from scratch for years. I'm no stranger to HTML, CSS, and all the different web programming languages out there. At present, I have a number of websites hosted by a number of different free and paid services. I'd like to consolidate all of them into a single service that gives me a big chunk of space and bandwidth that can be divided into many different websites (each with its own URL). Having such a setup might also convince me to start a few projects I've been putting off for a while.

It's Now Or Never! If I stay with Blog*Spot much longer, it would become increasingly difficult to transition away from it in the future. And while I may not have reached the commonly used threshold for leaving Blogger (whatever that threshold may be), once I do reach that level, it might be impossible for me to leave without starting over completely.

With all of these reasons for leaving Blogger behind, you must be curious why I haven't done it already!

Why Shouldn't Funny Munny Move to a Web Host?

It Costs Money. Bingo! Reason numero uno why people are using Blogger and Blog*Spot instead of any one of the thousands of top-notch web hosting services out there: such services aren't free! In fact, some can be downright expensive. While you can find a dirt cheap web host that will give you a tiny thimble full of space and bandwidth through a straw, it's gonna cost at least a couple bucks a month just to match Blog*Spot's sub-par level of service. Quality web hosting with lots of space and bandwidth accompanied by satisfactory service can run anywhere from $2 to $200 a month, maybe even more! Sure, advertising revenue can help offset the costs, but plenty of people aren't yet at the point where their ad money would completely cover their operating expenses. Still, many people (myself included) are more concerned with providing good content to the general public rather than making a quick buck (though doing both at the same time certainly wouldn't hurt).

More Trouble Than It's Worth? This Blogger blog was relatively easy to set up. It's pretty easy to maintain, and I've added a few nice features without too much trouble. This is perfect for millions of people who use Blogger and Blog*Spot, and it did the trick for me for a while. But now it doesn't, so it's time for me to move on. Moving on, however, isn't as simple as hopping on a covered wagon to the next town. Unless I start over from scratch (which I don't plan to do), it'll take some elbow grease to get this blog transferred over to a different web host. Fortunately, there are plenty of resources available online to help make the transition a little easier, and I'll be discussing some of them as I go along.

So Many Hosts! If there's one thing the world doesn't need more of, it's web hosts. I estimate there are at least 74 different web hosting services for each person in the world. So how is someone supposed to choose from the roughly 444 billion web hosts out there? Is one host better than another? How about customer service? Am I getting the best value for my money? All those questions were enough to keep me from shopping around... at least until now. I'll be dedicating an entire part of this series to selecting a web host.

Even Without Starting Over, It's Two Steps Back. I equate the change from Blogger to a new web host to buying a new baseball glove. The old one may be dirty and falling apart, but you've got it broken in just how you like it. A new glove will take some getting used to, but the change will likely be worth it in the end. My biggest concern with leaving Blog*Spot is maintaining my current audience. I don't want to lose any of you six! Seriously, while there are some simple ways for letting your audience know that you've moved, it often requires some sort of action to be taken by your audience to follow you. Using a service like FeedBurner helps with the move because people who put your blog in their RSS reader won't need to do a thing to find your new feed; you can change the location in your FeedBurner profile and it will automatically propogate to the rest of the world.

Maybe Blogger and Blog*Spot Aren't So Bad... Boy, how many times have I thought these words? Sure, they're not the best free blog host out there, but it did help me start this blog, and it's still here three months later! If you're thinking about dabbling in a little blogging, I'd probably recommend giving this place a try. Just keep an eye on your progress, know when it's time to jump ship, and make sure you have a life jacket handy.

I've already been researching potential web hosting services, and I believe I've reached a final decision that I'll carry out within the next day or so. It'll take a while to transition, so I'll be continuing this series right here at http://kweee.blogspot.com for now. Be sure to join me for the second part of "Bloggin' On Up" where I'll discuss how to pick the best web host for you. (Now where did I put that dart board...)

For now, I'll leave you former and never Blog*Spot bloggers with these questions: Who's your web hosting provider? How's their service? And how hard was the transition for you (if you had one)?

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What $300,000 Will Buy You In... Rockville, MD

2006-03-16T10:57:00.000-05:00

JLP over at AllThingsFinancial commented on the price of homes in Houston, TX--specifically, how much house $300,000 will buy you.

Then Jim at Blueprint for Financial Prosperity detailed what $300,000 gets you in Howard County, MD--just one county over from me! Not surprising, you'll get more for your money in Houston.

So what does $300,000 get you in Rockville, MD, a northern suburb of our nation's capital? Obviously it's the best deal out of all of them: you get a magic invisible house!

Indeed, $300k will get you an empty plot of land in Rockville, MD. And as you move closer to Washington, DC, $300k won't even get you a mailbox.

Automatic Bill-Pay Saves You Time and Money... Until the Knife Slips

2006-03-15T18:53:00.001-05:00

Seeking assistant for world famous knife-throwing act. Earn big bucks for standing very, very still. Excellent benefits including health, dental, and 401(k). BYO life insurance.

Sign up for auto bill-pay today. We'll credit you with $20 if you activate auto bill-pay on your account. We'll automatically debit your checking account each month for the amount of your balance. Never worry about paying your bills again!

At first glance, these two advertisements seem to be completely different. At second and third glance, they still appear unrelated in any way. In fact, you could fill a room with Harvard PhDs and 500 gallons of Red Bull, and weeks could pass before anyone sees the connection between the two ads.

Fortunately for you, I have a PhD in awesomeness. It was granted to me by the University of Cool.

So what in the name of Benjamin Bernanke am I getting at? Quite simple: I might sooner try the knife-throwing job before signing up for auto bill-pay.

I've really gone off my rocker this time, haven't I?! Here come the men in white coats to take me to a "special room." But before you add the label "psychotic" to my RSS feed in your reader, hear me out! Allow me to explain why I equate automatic bill-pay to being at the pointy end of a knife-throwing act.

The Tragedy of Jill: The Woman Addicted to Auto Bill-Pay

Consider this hypothetical situation involving a young woman named Jill. Jill rents an apartment in the city and has a nice job. She used to pay her monthly bills the old-fashioned way--a check, an envelope, and a stamp. Then one day Al Gore invented the internet and she found that she could pay all her bills online. At first, Jill set up a manual bill-pay system with her bank so that she could input the values from her paper bills by hand each month and have her bank handle the payments. Then Jill got promoted at work and suddenly found herself short on time. Seeing an opportunity to save 30 minutes a month, Jill signed up for automatic bill-pay for all of her bills. Now everything would be automatically debited from her checking account. For the sake of simplicity, let's say these are her accounts and that they're all set to auto bill-pay somewhere near the end of each month...

Payee	Monthly charge ($)	Fee structure
Rent	1,500.00	Fixed
Car lease	400.00	Fixed
Home phone	40.00	Base + long distance minutes
Cell phone	50.00	Base + extra minutes
Gas	~150.00	Varies
Electricity	~150.00	Varies
Water	~20.00	Varies
Credit card #1	???	Varies
Credit card #2	???	Varies
Gym membership	30.00	Fixed

On an average month, Jill will have $2,340 plus her credit card balances automatically debited from her checking account. In a situation like this, unless Jill meticulously monitors her accounts (which she just doesn't have the time to do), she stands to get burned in one of several ways.

Way Jill Loses #1: Keep the checking account loaded with money. Most people have low- or no-interest checking accounts for their everyday use. So if Jill puts $1,000 in a checking account that earns zero interest, it's going to stay $1,000 unless Jill adds her own money or remove it. Any money Jill puts in such an account is really losing interest that it could be earning in a high-yield savings account (>4.00% APY). Jill can pretty much ensure her bills will be auto-paid with no problem by keeping, oh, $10,000 in her checking account at all times. While there are a few higher-yielding checking accounts out there, Jill probably doesn't have one. So Jill probably misses out on $400 or more in interest each year when she keeps her checking account balance that high.

Way Jill REALLY Loses #2: Ballpark the checking account balance each month. Remember that Jill needs an average of $2,340 each month to pay her non-credit card bills. Perhaps Jill pays slightly more attention to her spending and adjusts her monthly checking account balance accordingly. If Jill estimates she put $1,500 on her credit cards this month, she might transfer only enough to her checking account to bring the balance to about $4,000. That should be enough to cover all of her bills.

But what if Jill's math is a little off? What if there's a particularly cold month that doubles her average gas bill, and she goes on a short trip and greatly exceeds her cell phone minute allotment, and her rent goes up $100 but she forgot it started this month, and she forgot about that $250 charge to her credit card she made on her trip? Jill ballparks her checking account balance based on the previous month but underestimates by, say, $300. Depending on the order in which her bills are debited, she faces at least a couple of overdraft fees from her bank that will set her back $10-30 each. And if Jill doesn't have overdraft protection, she instead faces eviction, repossession, utility disconnection, dings on her credit report, and flabby arms due to a cancelled gym membership.

Chances are that situations #1 and #2 can be avoided by taking the middle road. If $4,000 would just barely pay the bills and $10,000 would always cover them, Jill could simply keep her balance at $7,000 or so and both her her risk of running the checking account dry and her missed interest earnings drop.

Way Jill REALLY REALLY Loses #3: Auto bill-pay is always on time, even if you're not. Jill only half-learned her lesson from situations #1 and #2. She now keeps her checking account balance around $5,500 a month just in case. Sadly, Jill doesn't bother to reactivate her gym membership, and she quickly becomes out of shape. She puts on 100 pounds and one day gets hit by a bus that she just couldn't outrun. She makes it through okay, but she's stuck in the hospital for about five weeks. Her family flies out to visit her, but nobody thinks about her finances since she'll only be away from them for a little over a month. "She has auto bill-pay," Jill's mother comments. "Everything'll be just fine!"

Jill leaves the hospital and returns home only to find her car gone, all of her utilities off, and Fair Isaac himself standing in her doorway with a baseball bat ready to bust her credit score down to 400. As it turns out, she was in the hospital for two cycles of auto bill-pay. The first went through just fine, but only the rent got paid at the end of month two. Or maybe Jill set up overdraft protection, and while everything was paid, she now has $300 in overdraft fees.

Way Jill Loses For All of Eternity #4: Getting your bills paid until the end of time. Flash forward 30 years. Jill retires with a comfortable nest egg, and with the advent of the super-duper-internet, Jill's bills will never go unpaid because the auto bill-pay finds her money no matter where it is. On her 148th birthday, Jill dies unexpectedly... but nobody notices. You see, all of Jill's friends and family are already in cryogenic freezing, so when she passes away in the quiet of her apartment, there's nobody around to miss her. Not even her auto bill-pay misses her as it effortlessly continues to draw money from her bank account to cover her rent and other bills month after month, year after year. It's not until her bank accounts hit zero 43 years later that anyone bothers to come looking for Jill. She's buried on the moon where her gravestone reads, "Jill, 1975-20??, FICO 250."

And if you think something like situation #4 can't happen, think again.

Is Auto Bill-Pay Right For Me?

To me, auto bill-pay doesn't seem to be worth the seconds or minutes one might save. What if, for example, you ran across some fraudulent charges on your credit card or calls you didn't make on your cell phone bill? You might be expecting your auto bill-pay to take $30 out of your checking account, but a few fraudulent charges and you could end up with a bill many times larger than normal. If you're using a manual bill-pay system, you'll have a chance to go "Wait, why is my phone bill $1,300?" before you actually pay that amount. With auto bill-pay, unless there is some sort of control system in place that alerts you to larger-than-usual bills, you'll have to deal with the company to get your money back after they already have it.

Let's go back to the knife-throwing assistant metaphor. Just like many knife-throwing assistants who last their whole career without a single split hair, you might go your entire life on auto bill-pay without experiencing any of Jill's troubles. Or you might have a small auto bill-pay mishap here and there that won't affect you too much, much like the retired knife-throwing assistants out there who continue to lead normal, fulfilling, eight-fingered lives. But why risk a slip of the knife--a $1,300 auto-paid cell phone bill that could cause bounced checks, missed payments, and credit nightmares?

Still, I can see the appeal in not having to deal with bills each month. I know some people who take an entire day each month just to handle their finances, and bill paying can easily take up half that time. In theory, auto bill-pay should be okay for strictly fixed charges--rent, mortgages, and anything else where the price won't fluctuate due to extra usage.

Just make sure to have a friend check up on you every so often.

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bills

You Can't Spell "Carnival" Without "Personal Finance Advice"

2006-03-13T17:03:00.000-05:00

...Okay, so maybe you can, but you definitely wouldn't be able to link to this week's edition of the Carnival of Personal Finance without it being hosted by Personal Finance Advice. Jeffrey Strain took an interesting and amusing approach to this week's carnival, and I have to say that it made reading the whole thing an absolute pleasure. Seriously, if you're gonna do a carnival, you need to have amazing attractions like bearded ladies, fire eaters, or colorful text!

An extra special thanks to Jeffrey for giving me some red, bold lovin' with his write-up of my submission, Verizon Is One Sneaky Telecommunications Corporation!

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carnivals

The Blogger Net Worth Index: Making the S&P Look Like Garbage

2006-03-10T16:06:00.000-05:00

The NASDAQ was down 1% for February and the S&P barely broke even, but my favorite index was up 3.4% for the month. Is it something new and innovative from T. Rowe Price or Vanguard? Nope, I'm talking about the BNWI. Sure, that link might say there's no such index, but I'd invest every one of my hard-earned dollars in the Personal Finance Bloggers' Net Worth Index... if it were actually a real fund.

Sadly, the BNWI is the creation of the editors at Moneysmartz and tracks the net worth of various personal finance bloggers including yours truly. You can check out how the index fares with Moneysmartz's monthly updates. And while you can't really invest in the index, you can always send me a check and I'll invest it in the Funny Munny Fund (currently returning approximately -100%).

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The $39 Free Sample Experiment

2006-03-09T14:44:00.000-05:00

Via digg comes news of a noble experiment conducted by ordinary citizen Tom Locke. His goal was simple: send 100 letters to various companies to obtain free samples of products. The total cost of his experiment was just $39 in stamps (plus a few bucks for envelopes) and he has already received over $75 worth of stuff.

It's interesting to see some of the samples that companies are willing to part with to an average person who writes in requesting one for no real reason. White Castle, for example, sent Tom a booklet of the best kind of coupons--ones for tons of free burgers with no purchase requirement. It's also equally interesting to see which companies flat out refuse such a request. Office Max gave Tom a big fat "no" for his 39-cent efforts. Of course, his letter to Office Max was a little... yeah...

Dear Sir or Madam:
I recently started my own small business, and I was wondering if you would be so kind as to provide me with free samples of office supplies that I may need to help me get started. Rubber bands, paper clips, pens, staplers, staples. Anything that you think would help a budding entrepreneur to make it through the busy days! Thank you in advance,
Tom Locke, business enthusiast

Tom admits he had more fun with certain letters than others, and his website includes the full text of each letter sent. Anyone else out there willing to try an experiment like this? Tom initially limited his venture to businesses whose address he could find on products already in his home, so there are many companies he has yet to try. I might send out 100 letters of my own, but every single one of them would be going to Dunkin Donuts which sent Tom five bucks in gift certificates!

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Verizon Is One Sneaky Telecommunications Corporation!

2006-03-08T17:12:00.000-05:00

Why, in this era of supercomputers and flying cars, do I still have a landline phone installed in my home? Is it because I feel more secure knowing I have a phone that connects to a wall that connects to all the other phones in the world with wires? Do I have some sort of illicit passion for phone jacks and RJ-11 hinged locking tabs? Or are landlines such a great bargain that I'd be stupid not to fork over the cash each month to have one?

I can assure you that the correct answer is none of the above. Instead, the absolute only reason there is still a telephone plugged into our home's wall is because of Comcast. You see, my wife and I aren't big television watchers. In a given week, we'll spend a combined total of maybe six hours viewing regular television programming. Our TV gets far more use in conjunction with its attached peripherals--the Gamecube, the PlayStation 2, and the DVD player. As such, we don't have cable or satellite or any other paid service that would give us access to additional programming channels. And since we don't have cable, we also don't have access to the high-speed internet services provided by our local cable company, Comcast. In order to purchase Comcast's internet services without also buying into its cable service, I would need to give them one of my kidneys wrapped in an enormous ball of cash.

While we can live without 430 channels of HBO, my plot to take over the world work and hobbies (like this one!) require some sort of non-dial-up connection to the internet. Verizon to the rescue! We're signed up for their $15/month 768/128kbps DSL service. For the less technically inclined people out there, those numbers mean that I can download the entire internet in approximately seven seconds. Of course, with cable internet, that time would drop to three seconds, but I'm not in that big of a hurry.

So what does all this have to do with my having a landline phone? Well, it's because Verizon has this one little caveat to its $15 DSL service--I need to have some sort of landline phone service with them, and not even my cash-wrapped kidney can change that. So instead of paying $40 + $40 + taxes each month for cable and cable internet, we pay $35 + $15 + taxes for a landline telephone with unlimited local and regional calling and DSL internet. Having the landline phone service also allows me to keep my cell phone rate very low since I typically only use it for long-distance calls.

In a few areas, Verizon is starting to roll out its sexy "naked" DSL service. For just an extra $5 a month, this plan would allow you to get Verizon's DSL internet without any sort of landline service... in theory. In reality, you still need a landline; it just doesn't need to be with Verizon. Still, if true naked DSL ever appeared in my neck of the woods, we'd just drop the landline and beef up our cell phone service.

So as the situation stands, Verizon takes our $35 each month and gives us all the calls we want in this general area along with common extras like Caller ID, Call Waiting, and unlimited calls to Mars (though that last one has yet to be useful). But with our latest bill came a tiny flyer that I almost threw away without reading. It advertised Verizon's Freedom package (unlimited calls to anywhere in the U.S.) for just $35 a month. "Why am I paying the same price for a plan with no long distance service?" I thought. So I decided to switch my service to this new plan at my earliest convenience.

Fortunately for me, my earliest convenience was after I had a chance to discuss the plan with some wonderful folks on the internet. They kindly pointed out that the $35 version of Verizon's Freedom plan included absolutely no extra features. No Caller ID. No Call Waiting. And zero minutes for me to talk to my future Martian friends! I priced all those options individually and found out that the ones I use the most would add an extra $10-15 to my monthly bill. For that price, I may as well have gotten the full-featured Freedom package. And even with the unlimited long distance, I'd still have to hang on to my cell phone at its current rate for the occasional use I make of it away from home.

Nice try, Verizon, but you're not getting a penny extra from me. And as soon as I finish wiring my massive can-and-string network across Maryland, I'm ditching you altogether!

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Canadian Capitalist's Carnival of Cpersonal Cfinance

2006-03-06T17:06:00.000-05:00

The Canadian Capitalist is hosting this week's edition of the Carnival of Personal Finance. It includes a hyperlink (50% more betterer than regular links) to my recent article on the suckiness of February. If you missed the article last time, this is your absolute last chance to read it before the end of this paragraph. Don't miss out!

A reminder that I am hosting the Carnival of Bagels in the Shape of Academy Award-Winning Actresses. So far I have received ten submissions of bagels that look nothing like Academy Award-winning actresses. Perhaps I should stick with the personal finance carnivals...

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carnivals

Personal Update: I Sold Our Cow For Three Magic Beans...

2006-03-02T21:58:00.000-05:00

...But then I traded those three magic beans to someone even dumber for two cows! Heh, you might say I made a lot of moooooooolah on that deal.

February was an eventful month for the financial holdings of Funny Munny Investment Company Incorporated LLC. We enjoyed our semi-annual vacation at the Katsucon anime convention in D.C., but that resulted in a slight hit to our savings. You'll note, however, that my net worth figure jumped from $32,288 to $38,660. That $6,000 is thanks almost exclusively to the government being kind enough to return the interest-free loan I gave it last year. Once I tweak my W-4, that little snafu won't be repeated next year.

Thanks to the savings rate war currently raging between the big internet banks, all of our cash savings are now out of Emigrant Direct's measly 4.25% and into HSBC's manly 4.80% for the time being. If this keeps up, I expect to be earning interest at a rate of one billion percent annually sometime in 2007.

I also diverted $500 into an account at Prosper.com, a new peer-to-peer loan website where people bid on personal loans. I'm still waiting for the funds to show up in my Prosper account after four days; the money must be traveling by stationary rock. I'll be sure to post more about my experiences with Prosper... once I have some experiences with Prosper.

Thanks to a reorganized annual performance cycle, our next raises at work will come into effect this week. A lot of my co-workers have been a little dissatisfied with the amount of their pay hikes, but I'm perfectly happy with my 6% jump especially since I just had a 4% hike in October. I expect to be putting in loads of overtime over the next couple of months as we begin our transition to the next-generation version of our product, so that'll mean some extra dollars in the paycheck. Of course, that also means I'll be curling up with some light reading this weekend--a 700-page software design document. Riveting and pulse-pounding!

And finally, since I'm a goal-oriented person, I've set myself a goal for this month of working more on Funny Munny. That means more frequent updates, more efforts to grow my audience, and more funny stuff shooting out of my head and flying into yours like a big screaming ball of financial hilarity. Here it comes! AAAAAAAAAAAAAAAAHHHH$$$$$$$$$$$!!!

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Forget April--February Is the Cruelest Month

2006-02-28T19:48:00.000-05:00

I think February is the shortest month on purpose--it's simply not as likeable as the other months. April is nice because spring is in full bloom. July and August are warm, sunny, and a great time to take a vacation. Even December outranks February on the awesomeness scale because it throws in Christmas to help keep away the winter blues. But February, it's cold and miserable and the only holidays in it put the spotlight on groundhogs and greeting card companies. You'd think I would be thrilled that February usually ends after 28 days, but its abbreviated length just serves to make February the least favorite month not just for me but for my wallet as well.

To see why February earns the ire of my finances, consider how many monthly bills you pay. Things like gas, water, telephone, and electricity might come to mind. Of those four I just mentioned, which is most different from the others? You'll probably choose telephone if you participate in a fixed-price plan where usage doesn't impact the monthly charge. For all the others, your bill each month depends on how much gas, water, or electricity you crank into your home. These kinds of bills don't really care how long the billing period is; you'll pay the same amount per diem if you're billed once a month that you'd pay if you were billed weekly, yearly, or even hourly!

Those fixed monthly charges, however, usually don't take into account the length of a month. If your rent is due every month on the 1st, you'll pay the same regardless of whether the month is 30 or 31 days long. You'll obviously get the most benefit out of services that charge a flat monthly rate during months with 31 days. But February, geez! Not only do you miss out on the benefit of 31-day months, you lose another two days!

Let's consider a semi-hypothetical situation based loosely on my own finances. Say we have a person whose basic living expenses look like this during the month of April (a 30-day month):

There are plenty of other expenses this person will incur, but these will do for our purposes. For expenses, I included the equivalent per-diem charges calculated simply by dividing the monthly cost by 30. For income, since this person only works Monday through Friday, I calculated his income per diem based on a 22-day work month. You can see that, after basic expenses, this person has about $81 left for other purposes each of those 30 days.

Now let's consider a 28-day February with only 20 work days:

Assuming daily usage remains the same in February and April, this person will have slightly smaller gas, electric, water, and grocery bills. Since rent and telecommunication bills remain the same, their per-diem equivalent charge goes up almost four bucks over April's. When you take into account the slight hit to monthly income from those two missing work days, this person's discretionary income goes down $7.60 a day in February!

To keep this from becoming just another personal finance rant, I'll throw in some advice for dealing with the cruelty of February. Instead of counting your pennies monthly like I'm doing here, consider your income and expenses on an annualized basis. That way, lengths of months don't really matter to your income or expenses... unless you've got one of those crazy leap years. In that case, just take a cue from the groundhog and go back in your hole for six weeks.

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Super-Sizing My Commute: Only If I Can Use the Corporate Jet

2006-02-27T19:22:00.000-05:00

While I was walking from the parking lot into my building at work this morning, I was thinking about how I really love my commute. Just six minutes is enough to get me and my MINI Cooper from our apartment to my workplace, and in the summer I might start walking or biking instead. Five months ago we lived a 90-minute car ride from where I work. Since a commute is a two-way deal, this meant I was on the road for three hours a day, four days a week (I work from home on Fridays, even now). To put it lightly, the commute took quite a toll on me. While my car is quite comfortable and the drive was mostly through country roads, three hours of my day were going to waste. So in October, I said "enough!" and we packed our bags--a lot of bags. The move was grueling, but I can say it was totally worth it. And even the higher rent that we pay now isn't enough to cancel out the bliss of having an extra eleven hours each week.

This morning, I get a call from my manager. He wants to see me. I never like these unscheduled calls, but they've never been about anything bad so far (just raises and promotions). Today's wasn't necessarily bad as it was simply my manager trying to find out who might be interested in working on another project at a location about 45 minutes away. My current manager just took over for my previous manager who is away on maternity leave, but he knows that I just moved to the area a few months ago primarily because I wanted an ultra-short commute. Our meeting was short, and rather than reject the offer outright, I hinted that I maybe possibly could be sort of interested a little I guess.

Even if I accepted an offer at the new location, it wouldn't start for a little while. My current project is beginning to wind down, and our team will soon transition to the next-generation version of the product. And as important as our team's role is on the current project, I have no doubt that they'd want all of us to continue working on the next. My manager suggested that some people may be transitioned to other projects anyway despite the fact that the next-generation project is ten times bigger than the current one, though I can't imagine anyone would forcibly reassign anyone on our team because we're already putting in tons of overtime on the older project while it's ramping down. I also know that if I went to my team leader and mentioned that forces above us are looking to relocate me, he would not be happy since we're going to need even more experienced man-power after transitioning to the next project.

But I have an icky taste in my mouth about this. Will I soon be facing a "relocate or re-employ somewhere else" scenario? Should I have flatly refused my manager's offer? Or should I have jumped at the opportunity ... without even knowing what the opportunity really is yet?

In the end, it all comes down to the commute. Is there anything that could convince me to trade this lovely hop-skip-and-a-jump drive to work for a butt-clenchingly painful one? Maybe...

Things I Might Take In Trade For A Much Longer Commute

Interesting, enjoyable work. I like my current project, and the next-generation one will be even more challenging and exciting. But a new opportunity could be even more interesting, and I might find that I enjoy it even more than what I do now. A job I like is a pre-requisite that cannot be ignored, so this comes above all else.

A hefty pay hike. A new assignment means the opportunity for a new salary. If I'm going to lose 90 extra minutes a day to driving, I expect bags with dollar signs on them to be sitting in the passenger seat to keep me company. But if this were the only incentive to relocate, how much of a raise would be enough to "buy" me? 10%? 20%? 10,000%? I doubt I'll know for sure until I see the offer.

More telecommuting. It's quite fortunate that I still get to work from home on Fridays even after moving to within stone-throwing distance of my workplace. There are still mornings, however, that I'd rather not put on pants and just curl up on the sofa with my laptop and do my job from there. My current project is one that works very well with telecommuting. But what about this new project? Would I need to be in the office 40-60 hours a week? Could I work Fridays from home? Or would I be able to work even more from home--say, three or four days a week? Allowing me to do the majority of my time from home would help offset the extra commute on work-at-office days.

Advancement opportunities. Staying put, I don't really need to worry about opportunities to grow and advance in the organization because this is the biggest location with the largest projects. The new location is smaller, but the project is newer and there may be some room to quickly climb the ladder. I don't think I'd get a promotion right off the bat since I just got one a few months ago, but if the long-term outlook is better than in my current location, I'd be more open to seeking those opportunities in another location.

No other choice. In the two years I've been here, I don't think anyone in this location has been laid off. In fact, there's an impending talent crisis over the next decade as our baby-boomer senior staff members start retiring. There's even a special program for developing leadership skills in younger employees that I've been tapped to begin this year. On top of all that, we are transitioning to a larger project with a particular need for my set of skills. So I'm not worried about my continued employment with this company. That said, should the situation be presented to me as "move or be removed," I'll bear the heftier commute with a grin ... and keep my resume up-to-date.

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Ten Red Flags That Will Definitely Get Your Tax Return Audited

2006-02-23T16:13:00.000-05:00

We've probably all read the lists of common red flags to watch out for when filling out your taxes that could trigger an IRS audit, but most of them are things you can't change. If you gave $100,000 to charity this year but only made $100,000, you must be one awesome guy or girl, and the IRS should reward you for that instead of drilling you for days like a cavity-riddled tooth.

What the IRS won't tell you about are the red flags that, no matter what else you do, will get you audited for sure. Now while I don't work for the IRS, I can still promise you that any one of the following is almost sure to get you flagged for an audit:

Love IRS Audits? Try These!

Use creative media for your "paper" returns. While the IRS has strict guidelines for the weight, dirtiness, finish, porosity, gloss, and size of paper used for individuals printing their own tax forms, it does not go as far as to define "paper." The American Heritage Dictionary defines paper as "a material made of cellulose pulp, derived mainly from wood, rags, and certain grasses." Thus, according to the rules of the IRS, it would be perfectly acceptable to send in a tax return printed on a dirty old rag or even ground up marijuana. I also couldn't find any regulations on the color of forms filed with the IRS, so maybe give neon pink a try... or perhaps black ink printed on black paper!

Deny your existence. The IRS can't tax someone who isn't there! So when you're counting exemptions, be sure to omit yourself, and don't state that someone else can claim you. In fact, just send in a blank return with your address but no name.

Pay your tax bill in non-standard currency. Generally the IRS prefers United States dollars when you send them payment for taxes you owe at the end of the year. But at the same time, you prefer keeping your United States dollars in your Made in China pocket book. Keep in mind the purposes for which your tax dollars are used: feeding the poor, funding our military, protecting endangered species, etc. So instead of sending the IRS a check or paying by credit card, pay your taxes with coupons for free food (remember, one Jr. Frosty equals $1), spare ammunition you have sitting around the house, or any endangered red-speckled tree toads you may have stashed away in your closet. You'll save the government the hassle of converting that currency into services, so I'm sure they'll give you a break on your tax bill.

Amend like there's no tomorrow. Some of you may be familiar with IRS Form 1040X--the form you send after you file a 1040 if you'd like to make a correction. You might file this if you forget some deductions or your filing status changes. Typically you'll wait for the 1040 to reach the IRS and be processed before sending in a 1040X. But that's no fun! Instead, start the year off with an amendment to a return you haven't yet filed. Then file the actual return. Then file another amended return. And then, just for kicks, become your own non-profit organization, file another amended return, and then file three more amended returns claiming each of the three children you forgot you gave birth to a few years ago.

Your adjusted gross income: infinity. The IRS tax tables have one minor flaw: they only work on finite numbers. Indeed, how can you take 25% or 33% of a number you can't even see 100% of? Simply fill in your AGI as infinity, ask the IRS to compute your tax for you, and watch as their tax calculator enters an endless loop while determining your tax.

Encode your tax return. Pretend that your 1040 is a top secret government document that could fall into enemy hands. When the form asks for dollar amounts, fill in something like "TRH,OAP." Then, in a separate correspondance, include the decipher key that reveals T=1, R=4, H=7, ... Alternately, use a number-to-number encoding so that a 5 really means 0 and an AGI of $507,291 translates as $4,671. And for you computer geeks out there, since your tax return is going into a computer anyway, save the IRS a step and compute your taxes due in binary. Then gripe when the IRS doesn't cut you a check for $10010110101110101.

File your return ... UPSIDE DOWN!!! When you go to put your tax forms into their envelope, place the pages in upside down. The IRS computers will read everything backwards, so it'll see your AGI as your federal withholdings and vice versa. You'll instantly go from a tax bill of $2,000 to a refund of $20,000!

One way to invite an audit: do it literally. Instead of filing a 1040 this year, break out some of that stationery you have left over from your wedding and compose the following note: "You are invited to attend the audit of Mr. and Mrs. INSERT NAME HERE at our home on April 15th. Refreshments will be provided. Bring your own receipts."

Return the favor of fine print. The IRS wouldn't hesitate for a second to give you an extra 50 pages of instructions to read when filling out your tax return if it meant more revenue for them. You shouldn't hesitate to send some right back to them. Include the following text in the margins of your 1040 in tiny print: "By auditing this return, you agree to pay us the sum of one hundred million dollars, and there's no way in hell we're going to pay a single dime of taxes on that amount."

Tell them where all your money's really coming from. On the line that asks for your occupation, simply write "MacGyver." Then attach your W-2s with duct tape.

And as an added bonus, should you attempt all of these activities in a single tax return, not only will you get an IRS audit, but you'll probably also receive a visit from some nice men in white jackets and a trip to a lovely room with padded walls. Just be sure to scream "I'm counting this as a medical deduction!" as they haul you away.

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taxes

Follow-Up to $1 Domain Sale, Or How to Make A Lot of People Hate Your Company

2006-02-15T21:21:00.000-05:00

Yesterday I mentioned that Dotster.com would be holding a one-hour, $1 domain name sale. February 14th at 4pm EST came and went, and I'm willing to bet that very few people got their $1 domain names. Why? Because Dotster followed a fabulously evil formula to get some cheap advertising. I've written the formula in more general terms so that any evildoers out there can duplicate it.

Sell an item for twice its price elsewhere. In Dotster's case, that item was a domain name registration. Dotster's regular price for one year of registration is about $15. Competitors like Yahoo!, GoDaddy, and RegisterFly regularly sell their domain registrations for half that or less.

Advertise a drastic discount for a very limited time. Dotster announced it would sell all domain name registrations for $1 (a mere third of the cheapest normal price around) ... but only during a 60-minute window.

Watch news of the sale spread across the internet, and even help it spread, too! News of the Dotster sale made most of the big deal sites as well as Digg and the most important and awesome blog in the entire world, Funny Munny.

Do nothing else. Don't try to shore up your web server or request more bandwidth from your host. In fact, if you are your own web host, you should move your online storefront to a smaller server and cut the bandwidth a few minutes before the sale starts.

Sit back, relax, and watch the server timeouts. If you did everything else correctly, you'll have thousands of people simultaneously connecting to a website meant for no more than two or three visitors an hour. Anyone who manages to get the front page to load will still have to struggle with a checkout process which you should have expanded from the usual two or three pages to ten or twenty pages. And just in case anyone should make it to the last page of checkout, recode the final Submit Order button so that it calls a script that doesn't exist.

Indeed, I have spoken to just one person who managed to complete the order process during Dotster's Hour of Evil. It took him the entire hour just to get through one domain registration.

Had Dotster been truly evil, it would have gone ahead and registered any domain names customers attempted to purchase during the sale hour. Then it could kindly offer to sell them the domains for the usual $15/year registration fee. Maybe Dotster was visited by the Ghost of E-Commerce Failures Future and had a change of heart.

Still, Dotster got a lot of advertising out of this ploy, and it won't take many domain name registrations to make up for the handful of $1 domains customers mananged to grab. I, however, won't be making any purchases from Dotster for one simple reason: you just have to wonder how reliable a web hosting company is that can't keep its own website up during heavy traffic.

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$1 Domain Name Registration

2006-02-14T16:01:00.000-05:00

Via Digg, here's a great deal for anyone who's been holding out on registering a domain name. At 4pm EST today (about five minutes from when I'm writing this), Dotster.com will have a "happy hour" during which domain name registration will be on sale for just $1.

It might only be a few bucks saved off the usual Yahoo! and GoDaddy prices, but this is an especially useful deal if you're looking to pick up a whole bunch of domains at one time! How many domains can you register in just an hour?

read more | digg story

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deals

Don't Be Afraid to Use Your Credit Card When Dining Out In A Group

2006-02-12T23:21:00.001-05:00

How many times in your life have you gone out to a restaurant with a group of people--say, four or more--and when it comes time to pay the check, everyone throws some cash on the table. Whether everyone pays for their own food or the bill gets split evenly among everyone, a group meal typically results in a big pile of assorted bills.

If you're like me, you don't usually carry a lot of cash in your wallet. When you eat out alone or with one other person, you use your credit card, especially if it's a reward card that you pay off every month. But when you'll be going out with several friends or co-workers, you might make a quick trip to the ATM on the way so you can contribute to that pile of cash that inevitably forms at the end of the meal.

Of course, you could pay for your part of the meal with a credit card; but when everyone else is flashing the green stuff, you may feel compelled to do the same. Is it the peer pressure? Is it because of the stigma that comes with being a "credit card user?" Whatever the reason you might have to keep the credit card in your wallet, it's a bad one. With reward cards like the Citi Professional MasterCard that give 3% back on restaurant transactions and tons of other cards that offer 1% cash back on everything, paying cash at a restaurant is like paying extra sales tax. So forget what other people may think when you break out the plastic to pay for your food. (Oh, and watch out for people who might short-change the pot--there's one at every company.)

While you've got that credit card out, why not put everyone's bill on it? Just say you don't have the cash on you and offer to "simplify" things by using your reward credit card to pay the bill. If everyone agrees, pocket that pile of bills on the table and think to yourself that you'll be getting a percent back of the total bill.

Consider this example. Say you and nine of your friends go out to eat and the final bill is $100 including tip. If your part of the bill is $10 and you use a 3% cash back reward card, you'll make three bucks if you take the cash pile and put the whole thing on your card. In essence, you're getting 30% off your own meal. Heck, if you're really daring and don't embarrass easily, why not go from table to table at the restaurant offering the same service to unwitting cash-payers?

Now what do you think would happen if a bunch of personal finance bloggers got together at a restaurant? Once thing's for sure: you would be able to hear the sound of plastic hitting table from outer space.

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Inside My Wallet: Please Please Please Be A Million Dollars ... Dang

2006-02-07T17:05:00.000-05:00

It's been a popular topic as of late, so I figure it might be amusing to explore the contents of my own wallet. Or, if not amusing, then at least incredibly boring.

In the billfold

$16 in cash. Two fives, six ones.

Receipts. Both for credit card purchases. One is for gasoline (thought I had lost this one). The other is for dinner last Saturday--Cheeburger Cheeburger; I ate the 20 oz. burger and got my picture up on the wall. I still feel it in my stomach.

In the card slots

Credit cards. I just keep my Citi Shell MasterCard and Bank of America Visa on me.

Club cards. Safeway and Giant at the front since they get used the most. Sam's Club and Super Fresh are in there, too. I'll probably ditch them both since there is no Super Fresh around where we moved and I don't intend to renew the Sam's Club membership.

Gift cards. I think all of them only have a few bucks left on them. Two for Target, one for Outback Steakhouse, and one for Bed Bath & Beyond. There's also a Dave & Buster's game card with a few bucks left on it.

Metro farecards. Two of them. Each has 30 cents left on it. They're from our recent day trip to Washington, D.C. They'll get used soon enough, I'm sure.

Movie theater cards. One for United Artists, the other for AMC. You're supposed to get free popcorns and drinks if you use them a bunch of times. I don't think we've ever gotten anything like that, but we rarely go to movie theaters anyway.

Insurance cards. Optimum Choice for medical, EyeMed for vision, and Delta Dental for toothy goodness. Had two cards for GEICO; one was expired so I just threw it away.

In the picture holders

Driver's license and change of address card. I look really angry in my license picture. Oh, maybe it was the three-hour wait!

Pictures of Tegan. Five of them, though I just noticed none of them are from the last few years. I've got the first one I ever took of her, another in her cute little blue swimsuit that's my favorite, two of her in dresses at various dances (one from before I even knew her) and the last of her wearing a blue wig. No wedding picture!!! I need to correct that!

I should note that I did clean out my wallet a few months ago. It was much worse back then--lots of little scraps of paper with outdated information, expired cards of all sorts, and even a picture of an ex-girlfriend (oops!).

It's probably also worth mentioning that I'm one of the few people I know who carries his wallet in his front pocket instead of the back. It's easier to secure that way (now pickpocketers just grope my butt) and I don't have to sit on it all day.

Maybe I'll take an inventory of Tegan's wallet. I just can't let her find out about it until I'm done!

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personal

Tax Return Time: It's Like the Exact Opposite of Christmas

2006-02-04T15:50:00.000-05:00

With all of the necessary W-2s and 1099s and NCC-1701-Ds finally in my documentation bucket, I sat down last night and this afternoon to set them all on fire. Then, with the documents that refused to burn, I did my federal and state tax returns. What follows is the sad tale of a young couple, some tax software, and three bottles of inexpensive wine.

Chapter The First: Preparations For Battle

The last of six needed tax documents arrived in the mail on Monday. It was my 1099-INT from Bank of America. At first, I wondered why they were sending me one since I had just opened accounts with them in November and had earned a total of 13 cents interest with them. "Don't forget that $50 account opening bonus," the 1099-INT politely reminded me. I told the 1099 where it could go, but it stayed on my desk instead.

The other documents had arrived in weeks previous and included...

My W-2. I elected to receive my W-2 electronically, so it was available online by mid-January. Just under $58,000 in wages. The federal government had already taken $10,000 of that, and Maryland snatched up $4,000.

Tegan's W-2. These arrived next-to-last. Since she had just started at the end of the year, her wages totaled just $1,300 and her taxes withheld were minimal.

ING Direct 1099. Yup, got a $50 bonus from them, too.

Wachovia 1099. I need to close these accounts sometime. They paid me just over $100 in interest. Had my deposits been in ING or Emigrant the entire year, that amount would have been about seven times higher.

Tegan's Tuition 1098-T. Say that three times fast. Tegan returned to school a couple weeks ago, but since her tuition was paid in December, we could count it in our 2005 tax credits. This 1098-T quickly became my favorite tax document.

Even though the majority of our savings were in Emigrant Direct, they only got to ED in November and December and didn't quite make the interest needed to generate a 1099.

Chapter The Second: Attack of the Federal Government

I had already downloaded the 2005 edition of the awesomest tax software in the world: TaxACT. While downloading TaxACT, I was aware that H&R Block's TaxCut software was also available for free download. I chose to stick with TaxACT because I had already used it in 2004 and 2003.

Even though I downloaded it back in December, I waited to install TaxACT until yesterday. The installation process was painless, and I had the program up and running in no time. To start, it asked some basic questions and queried me as to whether I had data from TaxACT 2004. I did, somewhere on a backup DVD, but since the only thing that hadn't changed from last year was my name and social security number, I decided to start fresh.

The TaxACT interface was unchanged from previous years, but there were many more annoying "upgrade to a more betterer version of TaxACT for $12" interludes between steps. While $12 would get me a Maryland tax return and e-file without any extra work, I declined each time is was offered because I wasn't about to pay for something I could do for free.

I entered our W-2s and 1099s and Tegan's 1098-T fairly quickly, though copying exact numbers from the paper forms was a bit tedious. With wages and interest, our adjusted gross income came to about $59,000. Some magical calculations later, I saw the first sign of my anticipated refund in the corner of TaxACT's window: $4,900. I kicked myself a few times for giving the government such a lovely interest-free loan and promised to update my W-4s soon. I took the Hope credit for Tegan's tuition which allowed me to credit all $700 right from the taxes we owed. So that $4,900 turned into $5,600 just like that. We can take the Hope credit one more time for 2006 and then we'll be stuck with that crappy Lifetime Learning credit that only takes 20% of her tuition away from our taxes.

TaxACT then freaked out a bit. It detected that it was out-of-date, closed itself down, downloaded the latest version, installed it ... and then stayed closed. Why it didn't do all this when I first started it, I don't know. I manually restarted the program and found that it hadn't discarded the data I just finished entering, so I continued from where I left off.

Unlike last year, TaxACT had the option built-in to e-file our Federal return for free. I did so and gave it our bank account number for direct deposit. TaxACT kindly told me I'd be getting a couple of e-mails in the next several days letting me know how things go and that I'd need to send in a paper 8453-OL (Tax Document Permitting the IRS to E-Molest You). TaxACT then tempted me with a preview of our Maryland tax return like it always does. I printed a copy of our 1040, backed up the Federal data, and told TaxACT to take a hike.

Time to complete, from installation to filing: about an hour.

The Final Chapter: Wishing I Lived in Florida

The reason I turned down that $12 TaxACT offer to handle my state return: Maryland's free iFile. Not content to begin with a pedestrian letter like "e," Maryland's iFile is a simple but thorough substitute for Form 502. Like every year, I had to try a few times to remember my password, but once I got it right, all my basic information from last year automatically appeared. Unfortunately most of the data was wrong wrong wrong, so I put in the new address, phone numbers, and wife. It then prompted me for our Federal adjusted gross income and data from our W-2s. A few minutes later, it spit out our taxes owed and told me we'd be getting back $400. A little better than the $5,600 I had given to Uncle Sam, I thought. But when I noticed that our county tax was almost 60% of our state tax amount, I almost cried. I guess that's why Montgomery County is so much nicer than Baltimore County; we pay more for it.

A few button-pushes and some direct deposit information later, the return was sent to some guy in Annapolis who probably makes $10 an hour to push a button granting refunds. I had some trouble printing out a copy of the Form 502 because the PDF version didn't want to download. Fortunately the "text" version wasn't just plain text and looked just like the real Form 502 in full HTML. I printed off a PDF copy of it and shoved it in a folder with the dozen or so other PDFs I had generated.

Time to iComplete: 30 minutes on the button.

Epilogue

So we have about $6,000 heading our way, and that $6,000 will soon be sitting in our just-opened HSBC savings account earning 4.80% until the end of April. Next on my tax to-do list is updating those W-4s so not quite so much is taken out this year. Granted, we'll be earning quite a bit more in interest this year and paying more in tuition, so I'll have to take all that into account.

That refund still irks me a bit. Some people might love getting a $6,000 tax refund; me, I see that as about $200 in interest we missed out on. I thought about making that $200 up by eating sticks and slugs for a few weeks, but then Tegan made a yummy cake and I forgot all about it. Even typing this right now isn't enough to remind me.

And I'll probably forget to update my W-4, too ... especially once I get to those three bottles of wine.

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I've Got Gas ... Bills That Are High

2006-01-31T20:25:00.000-05:00

After reading about horrible gas bills being sent to fellow personal finance bloggers, I was fearing the worst when that monthly mailing from Washington Gas reared its ugly letterhead yesterday. I closed my eyes, ripped the envelope, pulled out the paper, and opened my eyes, ready for the shock of my life...

Then I flipped the paper over because it was in the envelope backwards.

Oh rabbits! $55.07! Chaos in the streets!

Okay, so I can still pay the monthly gas bill with money I find trapped in my belly button, but I was rather surprised because this was how much I paid for gas last month. As anyone living in the northern suburbs of Washington, D.C. can tell you, it's been a lovely spring this winter. The average temperature has hovered in the 50s most days, and yesterday it hit 65! Our gas usage reflected this--a little more than half the usage in January compared to December. So then why is the bill about the same? Because the rates went up about 60%! Oh no they di'n't!

So with the thermostat set just above chill, the windows reinforced with plastic and two inches of titanium, and the fire in the living room burning bright every night even though we don't have a fireplace, where the heck else are a couple of warm-blooded homo sapiens supposed to save on home heating costs? I've come up with a few ideas, though I'm a little hesitant to try some of them...

Last Resorts For Beating Your Heating Bill

Forget the heat. Turn on the A/C! Why give in to the high cost of natural gas or heating oil when electricity is cheaper? Just crank the A/C dial to 35 and you'll quickly find that the winter weather is nothing to complain about.

Gas company bills you? Bill them back! What nerve those jerks at the local gas company must have that they expect you to pay more just because gas is costing them more. So when it comes time to pay that ridiculous travesty of justice they call a bill, send a bill of your own right back to the gas company. Let's see, $10 Being A Meanie Surcharge, $25 Ripping Me Off Service Fee, and $100 multiplied by the 31 days they didn't call me last month to make sure I hadn't frozen to death. Of course, don't forget the $50 Funny Munny Tax; you can just send that directly to me. It helps keep the less fortunate warm ... in my deluxe hot tub!

Switch to hydrogen for your energy needs. Hydrogen may not be a viable consumer energy source for a few years, but you can take advantage of this cheap, clean powerhouse today. All you need is a tank of hydrogen gas and a lighter. Bam! Instant whole-house heating solution!

Change your name. No, I'm not suggesting you dodge your gas bill and flee the country. Instead, change your name to something extremely long--say, 100 million characters long. This way, when the gas company sends you its bill or a credit card issuer mails you a pre-approved offer, they'll need a good 10,000+ pages in their letters just to greet you. Simply plug that paper into your fireplace and you'll never need a drop of heating fuel ever again!

Spontaneously combust. Hey, it's been known to happen, so why can't it happen to you? I'm sure you can find some instructions on doing this somewhere on the internet, and once you do, you'll have an infinite supply of warmth, and all your friends will gather around you to tell ghost stories and toast s'mores.

On what I can assure you is a completely unrelated issue, I've added a short disclaimer to my profile. To summarize it, if you take any of the advice in Funny Munny--as awesome as that advice is--you're on your own if it causes you to go bankrupt, melt, fly off the face of the planet, or experience some other form of unpleasantness. Should you have a pleasant experience because you took my advice, you're asked to send me a check for TEN BAJILLION DOLLARS. Yes, that's a one followed by however many zeros you can fit on the check. Or just send it to the gas company in my name.

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Finance Carnivals for January 30, 2006

2006-01-30T17:36:00.000-05:00

Funny Munny is featured in two personal finance carnivals this week! That's two more than last week! If my math is right, that's a 50,000% increase!

Fat Pitch Financials hosts the 33rd Carnival of Personal Finance and includes my recent discussion on Frugality Frustration from which I am happy to say I have fully recovered.

Canadian Capitalist brings the 7th Carnival of Investing to Canadialand and features my award-winning series of articles on employee stocks. Yes, I did give that award to myself, but I was asleep at the time, so it's all good.

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carnivals

Personal Update: [30] Days Without A Financial Meltdown

2006-01-26T22:59:00.000-05:00

I've been so busy offering up some of the best financial content ever to grace the intrawebs that I've neglected to share our personal pocketbook progress. Let's rectify that. Rectify!

I've updated our net worth data to include the latest figures fresh from the bucket of receipts and deposit slips on my desk. Somehow we went from $30,341 to $32,288 in one month. Where'd that $1900 increase come from? Well...

Savings up about $900. Between my paycheck and Tegan's, we managed to sock away a bit of cash into our EmigrantDirect savings account. ED just bumped up their interest rate to 4.25% APY, so our money's staying put for now. I considered transferring everything into our ING Direct account which has a 4.75% promotional rate on new money until mid-April, but since I don't have the two accounts directly linked, the money would have a short stay in Bank of America Land (motto: "We thank you for your free money"). We might've ended up making a few dollars more rate-chasing, but I'm just not yet comfortable constantly moving around $20k like it's a decorative vase. That said, I'll probably put the next month's worth of extra cash into ING for a bit.

40l(k) up around $500. The automatic 8% payroll deductions and 50% employer match continues. As for my investments' performance--up 1.35% since January 1st even with that rather nasty market bump last week. This doesn't include the performance for today which was likely pretty spectacular thanks to some awesome 4th quarter earnings being reported by my employer. Yay for my ESPP!

Car loan down another $500. I don't like this stupid loan. I'm tempted to just pay it off right now, but my money will make more being invested than it will avoiding the relatively low interest payments on the car. Still, I can't wait until that "Debts" column goes to zero ... and then I'll want it to go higher again to reflect our eventual mortgage on our eventual house.

Despite suffering from Frugality Frustration, we've found a few new ways to save some more money or increase our quality of life at little or no cost.

Smarter grocery shopping. I've been taking my own advice to help cut costs around the house, especially in the food department. We've been planning out the week's dinners on Sundays and then shopping only for what we know we'll need. I was hoping to also plan breakfast and lunch, but we usually just stick with a few options for those meals, so I didn't see as big of an opportunity planning those meals. As a result, our fridge isn't quite so full of stuff that might expire before we get to it.

Smarter eating. Along with planning meals, we're also wising up about our nutritional choices. We've dropped our meat-eating from six or seven days a week to four or five, and hopefully that will go down to three or four soon. The money we've saved on meat has been going to things that are better for us: delicious salads and soups, and even a few powerfully tasty yet inexpensive recipes.

Finally used our vision insurance. I've been paying a few cents a week for it for nearly two years now, so I figured it was time to put that vision insurance to use. Our provider gave us a nice variety of places around here where exams would be fully covered. We opted for the local LensCrafters and its "independent doctor of optometry." The doctor was very pleasant and she told me I had 20-15 vision. Apparently I can see through walls my vision is so good--and this despite a decade of ridiculous computer use. Tegan, who wore glasses as a child but not since I've known her, was given a prescription for corrective lenses to be used as needed. It's not a strong prescription at all, but we got it filled while we were there. We only paid a few bucks out of pocket for the part of the eyeglass frame that insurance didn't cover, and Tegan reports a big improvement (especially in her videogame scores). As an added bonus, our bedroom life is better than ever now that she sometimes plays the role of the "sexy librarian." Too much information? You bet!

I also have some goals for February ready to go...

Eye those grocery prices a little closer. I plan to put together a grocery price book to help track prices for our common purchases. Thanks to The Frugal Homemaker for this idea.

Plan our in-house food production. This mild winter already has us thinking about planting some porch produce in a couple of months. Jane Dough has me considering a miniature lemon tree or maybe a more practical lime or orange plant. Really, I'd love to ask our apartment management to consider opening this one patch of land on the property for a community garden, but who knows if that'll ever happen. If you're passing through the area this summer, you should be able to spot our apartment; it'll be the one with the jungle on the balcony.

Don't overspend, but still have a good time. Valentine's Day is right around the corner, and while I hope to make it a special one for my wife, I'm going to do so without spending an insane amount of money on flowers that die in a week. I think she'd be perfectly happy if I just got her a ten-pound block of chocolate, but I'll figure out something a little more romantic and less artery-clogging. The other big event for February is our annual trip to Katuscon, a Japanese anime convention in Washington, D.C. While we're close enough to commute daily, we'd rather just stay in the hotel where the convention is being held for convenience and to spend more time with friends. We've got a few of those friends to room with us, so the room price will be fairly reasonable for a couple of nights. The real place we need to watch our wallets is in the convention itself with its vast vending rooms full of the latest anime products. We'll probably also load up on food to take with us so that we only need to eat out for dinner. All in all, it'll be a nice three-day vacation for just a few hundred dollars.

Uh-oh. Here comes the sexy librarian. I've gotta go ... check out some books. Goodnight!

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The Wonderful World of Employee Stocks, Part 4: Stock Options, And Why Thinking About Them Makes Me Squeal Like a Schoolgirl

2006-01-25T17:38:00.000-05:00

Squeee! Stock options! Squeee!

I'm okay. I'm okay. And if you happen to be a Google employee with a bunch of company stock options, you're probably much more than okay right now. That's because, with a few magic words from your employer and some lucky market timing, these little things called "options" can make millionaires out of anyone fortunate enough to be entitled to them. Now chances are if you have time enough to spend reading my lowly blog that you're probably not swimming in stock options, so this will be more of a "what if" for you. But maybe one day you'll come up with an idea that makes your company billions and they'll thank you with a handful of stock options. Then you'll come back to this blog on its 30th anniversary to read up on what stock options are, and you might just invite me to visit you on the private island you'll purchase with the money you make from selling your options.

Stock Options. Yup, That's What This Is About. What, Are You Waiting For Me To Say Something Funny Here? Okay, Fine. Ummm ... Cheese Doodles! Now Read The Article Already!

The basic theory behind stock options is pretty simple. When your employer gives you stock options, it is not really giving you stock. Instead, it's your employer's way of saying you will have the ability during some period in the future to exercise your option to purchase stock. The trick to stock options is that your employer sets the price at which you can purchase the stock, and if you choose to use your options to purchase the stock, you're guaranteed to pay that price and no higher.

There are a few things to keep in mind if you ever find yourself with some options. First, your options are only valid for a limited time. If you don't exercise them by the time they expire, you gain nothing, but you also lose nothing because you didn't buy any stock. Second, unlike ESPPs with their built-in discounts, options do not automatically mean free money for you. It's quite possible that the stock's price will drop or stay below the purchase price your employer sets during the option period. Fortunately, as long as you know basic math, you won't lose money if this happens; you'll just have worthless options. Third, you might not be entitled to use all of your options when you first receive them. They may be gradually vested, meaning that you might be able to use some of them one year, some the next, and so on.

The stock shares you buy with options, unless they're restricted (we'll talk about this in a moment), entitle you to all the rights of being a regular shareholder for as long as you hold the stock. Vote in big decisions, check your stock's price compulsively, or just brag to your friends that you own stock and are therefore so much cooler than they are.

Case Study: Exercising Your Options ... In My Pants!

Let's look at an example involving a sadly imaginary business. Say I own The Butt-Hugging White Pants Company and I've just hired you on to head our Shiny Gold Zipper Design Department. You're the best in the field of shiny gold zipper design, so I want you to stick around for a good long time designing shiny gold zippers for us. So I pay you well and give you 800 stock options in the company. Those options are 25% vested each year for the next four years and each option entitles you to purchase one share of NYSE:BUTT for $10. The options are good for four years from the start of the first year of vesting. Good so far? Not really since you haven't actually made any money yet. But hold on to your pants 'cause it's about to get windy!

Year One of your four-year option period comes around. BUTT starts the year trading at $15 a share. You could exercise 25% of your 800 options to buy 200 shares for $2,000 ($10 x 200 shares) and then immediately sell them on the open market for $15 a share. You'll make $1,000 if you do it this way, but you decide to hold on to your options. The third-quarter earnings go through the roof thanks to the discovery of a new shade of white denim that sells millions of pairs of pants in under a month. The stock price jumps to $30 a share and you decide to exercise those 200 vested options. You spend $2,000 to buy the stock and sell it for $6,000. You're $4,000 richer, and after a week's vacation in Hawaii, you come back to work and crank out the best darn shiny gold zippers ever made.

Unfortunately that new shade of white denim turned out to be poisonous and your company's stock plummets in Year Two of your option period to about $12 a share. You could still exercise your newly vested 200 options and make $400, but you decide to hang on to your options going into Year Three.

Now equipped with your fantastic new shiny gold zippers, Butt-Hugging White Pants start selling fairly well again in Year Three. The stock price rises to $20 and you sell the 200 options left over from last year plus your 200 new options from Year Three. The 400 options at ten bucks a pop costs you $4,000, but you sell them for $8,000. You're another $4,000 richer.

Year Four begins and you've got your final 200 options. The weather's nice outside ... a little too nice. Turns out that white denim was not only poisonous but it was also punching a big hole in the ozone layer. The entire country sees record highs, and while the only thing on people's minds is looking good, the only things on their thighs are shorts and skirts. Our company sells pants only, so we have a slow sales year. The stock price sinks to around $5.25 a share heading to the end of Year Four.

At this point, you have a couple of options (and I'm not just talking about the 200 stock options you have left). On the one hand, you can do nothing with your options and they'll expire at the end of the year. No money gained, but none lost. On the other hand, you can exercise your options and immediately sell your shares. You'll only make $50 ($.25 x 200 shares), but at least you'll be able to pay your bar tab at the end of the night. On the third hand (you three-handed freak!), you can exercise your options and hang on to the stocks for however long you like. While the options might expire at the end of the option period, you can use them and keep the stock indefinitely. Hopefully the weather will cool off next year and pants will begin selling again.

Sadly, you don't get to choose from any of these options. Instead, you resign in shame after the President of the United States has a highly publicized painful zipper accident while traveling through Europe. You guessed it; he was wearing Butt-Hugging White Pants with your latest shiny gold zipper design. In this case, since you quit willingly, you forfeit your remaining options. But that's okay, because the company never recovers from that incident and I'm soon fleeing the country when the SEC begins poking its nose into our, ahem, pants.

Other Fun Things To Know About Your Options

If you make so much as a penny with your options--surprise, you'll pay taxes on your profits. Taxes on options can be worse than those on ESPPs because, under certain conditions, you may have to pay taxes twice on options you exercise. The first time will be when you originally use the options to buy stock. If the price your employer sets for your options is lower than the market price for the stock, you'll typically pay regular compensation taxes on the difference. Once you sell your stock (if you decide to hold on to it), you'll pay taxes again if the stock price went up since you bought it. Also, depending on the type of stock option, you may only have to pay long-term capital gains taxes if you hold the stock for a period of time.

Another tax note about options: these babies could throw you clear into Alternative Minimum Tax (AMT) Land. If you exercise a ton of options in a single year or the gap between the purchase price and sale price is fairly large, you might trigger the AMT. You can read more on the AMT and stock options in this article from The National Center For Employee Ownership.

One nasty trap to be on the lookout for is options that only allow you to purchase restricted stock. As the name suggests, there are restrictions on stock purchased with these options that could prevent you from selling your stock immediately or force you into selling it back to the company (possibly at a loss!) should you leave the company. Be very careful when playing with restricted stock options.

Finally, another event that might take place during your option period is known as repricing. If your company's stock takes a tumble, it may reprice your options lower. Your options to buy shares at $10 a piece might allow you to buy stock for $5 a share if your company reprices the options. Companies sometimes do this so that a big employee incentive doesn't become worthless and employees don't start generating tons of resumes on the office copier. As simple as this might sound, there are rules restricting businesses from doing this whenever they feel like it.

Summary of Stock Options

Oh come on! Don't tell me you skipped down to here again. But that means you missed a great story about pants and stock options! Okay, on with the summary.

Stock options let you buy stock later at a price decided earlier. When you exercise your options, you can buy stock for a price your employer sets ahead of time. Generally you'll wait until the market price is higher than your purchase price, and then you'll sell for a tidy profit. In the meantime, while you hold the stock, you have all the powers of a normal shareholder.

Options expire and can be vested over time. If you don't exercise your options after a limited amount of time, you lose them but your wallet is left untouched. You might not be allowed to use all of your options right away; you could have to stay employed with your company for a while to get access to all of them.

When you make money, you pay taxes. Yup, same third bullet from the ESPP discussion. Be extra careful with options since they can be taxed at option exercise and stock sale time, and you might even trigger the dreaded AMT.

Watch out for restrictions and repricing. Restricted stock options can limit your ability to turn a quick profit with your options. In times of financial woe, your company may reprice your options so that they retain some of their value.

And that, ladies and gentlemen, is just about everything I know regarding employee stocks. Be sure to check out the other parts in this series if you missed them...

Part 1: Getting Started on Owning One Billionth of Your Company
Part 2: Getting Soppy Over ESOPs
Part 3: Don't Poo-Poo Your ESPP

...and look for more delightfully informative series from Funny Munny soon.

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The Wonderful World of Employee Stocks, Part 3: Don't Poo-Poo Your ESPP

2006-01-23T22:16:00.000-05:00

Oh how I wish my employer offered us an Employee Stock Purchase Plan (ESPP). I mean, an ESOP is better than nothing, but there are absolutely magical things about ESPPs that make me jiggle like a bucket of Jell-O just thinking about them. Today we'll take a look at a few of the magical, jiggle-inspiring facets of ESPPs along with a few jiggle-stopping pitfalls to watch out for in your own ESPPs.

How ESPPs Differ From ESOPs

Comparing ESOPs to ESPPs is a bit like comparing apples to apples full of free money. We'll get more into the free money side of ESPPs in a bit, but suffice it to say that ESOPs and ESPPs have a few basic characteristics in common. To start, any money you may have in either will grow or shrink depending on the success of your company, so employers hope that participating in either plan will encourage their workers to strive for peak productivity. So if you work hard enough to compensate for the other thousand slackers around you, your company's stock will skyrocket, and you will hit it big. Right? Right. Moving on.

ESPPs involve more direct interaction with your company's stock than ESOPs provide. Shares are typically purchased using money right out of your paycheck at the start of a plan period. Plan periods typically last a period of six months, but this doesn't mean you have to actually own the stock for six months or that you have to sell it after the period is over. Instead of being a part of a big trust like an ESOP, you take direct ownership of the stock yourself in an ESPP. While the company will hang on to the stock for you, you are a shareholder with all the rights and privileges that come with that title. So feel free to vote your goldfish into the board of directors or start labeling company office supplies that you now "own."

FREE MONEY! Now That I Have Your Attention...

...I'd like to talk to you about ... free money! How much free money am I talking about? Well, it sorta depends on how you look at things. How does a 15%+ return on your investment sound? How about a 60%+ return? You technically get both of them depending on how your ESPP works, and here's how.

Many ESPPs allow employees to purchase company stock at a discounted rate. While some companies have been dropping this discount lately, a 15% discount is not uncommon. The actual price you pay for the stock when you purchase it is not as simple as looking at your favorite newspaper's stocks page on the first day of the plan period. A lot of companies will let you purchase the stock at its price (minus any discounts) on either the first day or last day of the period, whichever is cheaper. A few employers throw in some oddball modifications to this rule; if you're lucky, you might only pay the lowest price on any Friday during the plan period or maybe even the lowest price a year or two into the future!

The real fun with ESPPs comes in when you do something that you're really not supposed to when participating in an ESPP: selling your shares as soon as you purchase them. If you just bought a share of The Baggy Black Pants Company that sells on the open market for $20 and you get a 15% discount on your purchase, you spent $17 to buy something that is immediately worth $3 more. If you sell that share right away for $20, you just made 17.6% on your $17 investment.

Where does the 60%+ return come in to the picture? It depends on how your ESPP paycheck deductions work and how long your money is really tied up in the plan. If your plan period lasts six months and you contribute to it in weekly paycheck deductions, your money is really only tied up for an average of three months. Assuming you sell right away, and putting your discount into the equation, you stand to make 15% or more for a three-month investment; that's a 60% annualized return on your money! If you take into account more complex Internal Rate of Return calculations, you might even be looking at a 93% return on investment. The best part: because of that 15% discount, that return is guaranteed and doesn't depend the tiniest bit on the stock's performance.

You can also play with ESPPs the way they were meant to be played with: hold on to the stock for some period of time longer than six seconds. Obviously this entails more risk, but some people see their discount as a sort of buffer that helps protect against a big loss.

Traps and Taxes

Earlier I hinted at the fact that immediately selling ESPP shares to cash in on the discount goes against the rules of ESPPs. While most companies don't have regulations on how long you must hold on to your ESPP shares, flipping shares is supposedly not in the "spirit" of an ESPP. ESPPs are really designed to be vehicles of long-term growth that encourage employees to hold stock in their company. Despite this, there are plenty of people out there who continue to flip their shares for an immediate, guaranteed profit and they'll keep doing so...

...Until the company gets tired of it. More and more, businesses are adding caveats to their ESPPs to discourage employees from immediately selling their purchased shares. RS of the Young Professionals Financial Blog shared some comments about IBM's ESPP clause that kicks its employees out of the plan for the rest of the six-month period if they sell their shares immediately. Couple that fact with IBM's less than thrilling 5% discount on its ESPP shares and you have a much less attractive plan. Still, taking into consideration the annualized return, even a 5% discount can return 20% or more per year.

As with the rest of the money we make in life, the federal government will always be there waiting (hopefully not right outside your office door) for its chunk. The tax implications for individuals participating in ESPPs can be a bit tricky, so I'll leave the details to this very thorough article on the TurboTax website. To summarize, the money you make from the share price discount is generally considered additional compensation and you'll pay taxes on it like regular income. If you hang on to your shares for a while and make a profit because the stock's value increased, you may get away with paying just long-term capital gains taxes on those profits depending on how long you hold the stock. For many people, long-term capital gains are taxed at a lower rate than your boring old paycheck.

There are a couple other things to consider before running through your hallways at work shouting "Free money! Free money!" The first is that you may have to pay a commission on your stock sale. It's probably going to be a flat rate, and if you've been putting enough out of your paycheck into the ESPP, it won't be much compared to your net return. But if you think you're going to make money getting a dollar taken out of your pay each week for six months, even a 15% discount can evaporate in the face of a $10 commission.

You should also watch out if your company messes around with the traditional rules of an ESPP. Especially in times of financial trouble, a company can pull some nasty tricks on you that will cheat you out of your discount and possibly part of your original investment. For example, while most ESPPs will issue the stock right away, some might take up to a couple weeks to do so. Sometimes a company will apply black-out dates preventing employees from immediately selling. In the meantime, the stock price drops and you're out not only the free money but some of your own money, too. As advised in this article on ESPPs from Ask Tog, be sure that your ESPP issues stocks on the payout date and that there aren't any rules that absolutely prohibit you from immediately selling them.

Summary of ESPPs

If you skipped down to hear without reading the rest of the article, you're cheating! Go sit in the corner and think about what you've done. Then come back and read this summary anyway.

If you're in an ESPP, then you own stock. None of this wussy fake-owning like in an ESOP. The stock is in your name, but your company will likely hold on to it for you until you're ready to sell it.

ESPPs generally mean free money. Assuming you don't have a really awful ESPP that gives its employees no discount on purchased shares, you make risk-free money just by buying and immediately selling. If your company has a plan like this and you're not participating, you're just silly.
When you make money, you pay taxes. This unofficial slogan of the IRS is just as true for your ESPP winnings. While the amount you pay can vary, you generally pay regular income tax on any money you make from the price discount and long-term capital gains tax if you hold on to your stock for a while.

Read the fine print of your ESPP. Some companies will temporarily throw you out of the ESPP if you immediately flip your shares after purchase. Other, shadier companies might pull tricks that could cost you your return on investment and then some! Be sure to know the rules of your ESPP before participating.

The series on employee stock plans comes to a close next time when the topic will be stock options. Be sure to exercise your option to check it out!

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Yummy Munny: Chicken Kiev and Carrot & Apple Casserole

2006-01-20T21:43:00.000-05:00

Why does mine look different than the cookbook pictures???

While my lovely wife Tegan does most of the everyday cooking, I like to hunt for new and exciting recipes, make them, and see how badly I screw them up. Tegan says I'm too hard on myself and that my cooking always turns out pretty well, but she has to say that because she's my wife and if she doesn't I might stop feeding her. (Just kidding, sweetie! Please don't wash your pink socks with my white shirts!)

Tonight I volunteered to cook a couple of dishes I found in the latest addition to our cooking library: Gregg R. Gillespie's 4-Ingredient Recipes. See, I have the culinary equivalent of Attention Deficit Disorder, so I usually pass on a recipe if it's over a hundred words and has more than four or five ingredients. This book is perfect for me because every recipe fits on a tiny page and even comes with a full-color picture.

Today, two pretty pictures caught my attention and I managed to read the recipes long enough to realize we had the ingredients to make these dishes! So without further ado, I present the stuff that happened when I threw food around the kitchen...

Chicken Kiev

2 boneless, skinless chicken breasts
1/2 c. bread crumbs
1 egg
5 tsp. vegetable oil
1/2 stick butter or margarine

Lightly grease a baking sheet and put it in an oven preheated to 400 degrees F.

Beat the egg in a bowl. Beat it good. Cut the butter stick up into small chunks. Place half the chunks on each of the chicken breasts. Roll each breast up and pin them closed with a toothpick. Roll each breast in the bread crumbs, dip them in the egg, and then roll in the bread crumbs again.

Heat the oil in a deep fryer to 350 degrees F. Fry the breasts in the oven for 10 minutes or until they're all brown and yummy looking.

Put the breasts on the baking sheet and bake them in the oven for 5 more minutes or until even yummier looking.

Serves two for about $4.00.

Carrot and Apple Casserole

2 c. baby carrots
1/2 c. water
1 1/2 c. sliced apples (I like to leave the peels on, but you don't have to)
1/8 tsp. nutmeg
2 T. butter or margarine
2 T. honey

Preheat the oven to 350 degrees F. Lightly grease a baking dish (and make sure you have a cover for this dish unlike stupid me who didn't read the recipe in full first).

Combine the carrots and water in a saucepan and cook on low heat for about 12 minutes. Drain the carrots and then combine them in the baking dish with the apples and honey. Slice up the butter and throw it on top. Cover the dish and bake for 30-35 minutes. Take it out of the oven and sprinkle the nutmeg on top.

Serves three for about $2.50.

Yeah, the book cheats a little bit and doesn't really count things like butter or water as "ingredients."

I'll share some more great recipes from this and other places as I work up the courage to try them, but you can always get this book and check it out for yourself.

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food

The Wonderful World of Employee Stock, Part 2: Getting Soppy Over ESOPs

2006-01-19T21:45:00.000-05:00

A couple days ago, we started talking about some of the different ways you can dabble in your own company's stock. Actually, it wasn't "we" doing the talking; it was just me, but you did a very good job listening. In fact, as a reward for being such good listeners, today you get to listen to me talk in excruciating detail about the most common way that people like you can invest in the success (or disastrous, wallet-annihilating failure) of your company--Employee Stock Ownership Plans (ESOPs).

How ESOPs Work (Or At Least the Parts You'll Care About)

The internal workings of an ESOP can be relatively complicated and, while I'll spare you the grittiest details, it is worth mentioning that they even have their own governing laws covered by the Employee Retirement Income Security Act (ERISA). A lot more goes on in the background of ESOPs than many of the employees who participate in them realize. To start, while one of the primary purposes of ESOPs is to provide an incentive for employees to work hard for the success of their company, they actually yield huge benefits to the company and its primary owners. The company's biggest benefit comes into play when the trust it establishes in connection with an ESOP borrows money that is used to buy stock for the ESOP. When the company goes to pay that money back, it can claim a hefty tax deduction. The company can also directly contribute shares of its stock to an ESOP, and those contributions are also tax deductible. A company's biggest shareholders also heavily benefit from ESOPs because ESOPs serve as a market for the shareholders to sell their stock.

What you should care about when it comes to ESOPs is how you get a hold on your share (or at least the cash value) of an ESOP. When a company establishes an ESOP, it also sets up individual accounts for each of its employees who are qualified to participate--generally any full-time employee over the age of 21. The company then contributes to your account however it sees fit--most often through matching a portion of employees' contributions to a 401(k) or through some other formula that takes relative pay or length of employment into account. In many companies, you don't immediately have a right to the shares put into your account; rather, you gain more rights to your shares the longer you remain with the company. That's what is referred to by the term vesting. ERISA rules dictate that employees be 100% vested in their ESOP accounts within five to seven years--possibly sooner, depending on how your ESOP is put together.

Eventually you'll leave your company, either for another job or to retire (or maybe they'll find your computer's "hidden" porn folder and give you the boot). When you do leave, your company must buy your ESOP shares from you for whatever they're worth. If you're not at retirement age, you'll probably want to roll that money over into an IRA. Otherwise, you might find yourself hit with capital gains and excise taxes.

ESOPs and 401(k)s

Many companies (including the one that employs me) make contributions to its workers' 401(k) retirement plans with ESOP shares. Since these contributions typically come in the form of matches to an employee's contributions to other 401(k) funds, it's rare that an employee will put his or her own money into an ESOP. Instead, the ESOP will sit alongside your S&P Index Funds and Stable Value Funds and the like.

The important thing to realize about ESOPs, especially if they're a part of your retirement portfolio, is that participating in one is akin to owning stock in your company. If a company does well, the value of your ESOP will rise. If a company does not so well, the value might go down. If a company goes bankrupt, your ESOP money goes bye-bye. So just like you wouldn't invest all or most of your money in a single stock, you don't want your ESOP to take up a disproportionately large chunk of your retirement plan.

That said, there are many employees out there with 33% of their 401(k)s made up of ESOP contributions--essentially, a third of their retirement money is riding on the success of their own companies. Now maybe these people are big fans of their companies and have complete faith in their continuing success, but I'm willing to bet that an awful lot of people simply take an hour to set up their 401(k) contributions and assume they'll have lots of money waiting for them in 40 years.

The problem with taking a set-it-and-forget-it approach to 401(k)s when your company's matching comes in the form of ESOP contributions is that, left untouched, you'll have two-thirds of your retirement account in assorted funds (they are assorted, right?) made up of your personal contributions and one-third in an ESOP (since a lot of people get 50 cents put into an ESOP for every dollar they contribute to other parts of their 401(k)). If you're in this situation and your company pulls an Enron, you could lose a third or more of your retirement savings.

Unfortunately for you, the rules for diversifying (in this case, moving your money from the ESOP to other funds in your retirement account) aren't in your favor. With some exceptions, until you turn 55 and have been participating in the ESOP for at least 10 years, it is solely at your company's discretion whether or not to permit you to diversify some or all of your ESOP. After that point, your company must give you the option of diversifying 25% of your ESOP balance or pay that 25% out to you. That figure goes up to 50% at age 60. But if you're still a whippersnapper, you may have no choice but to let that ESOP stay a big chunk of your retirement portfolio.

In my case, my employer matches 50% of my 401(k) contributions with ESOP dollars. Before this year, we weren't allowed to diversify our ESOPs until age 55, but my company changed that rule drastically this year to allow immediate diversification of ESOP contributions. Now if I had absolutely zero faith in my company's future existence, I could theoretically log into my retirement account every week and move those ESOP contributions to other funds (though in practice, I can't because we're only allowed a limited number of changes to our plans each year). Instead, I try to keep the value of my ESOP around 10-15% of my total 401(k). I closely monitor my 401(k) and whenever my ESOP hits 15% of the total balance, I usually transfer enough to other funds to knock the ESOP's worth down to 10%. I could diversify all of those ESOP contributions, but I'm pretty sure my company will still be around for a while.

"I Nominate My Goldfish For Chairman of the Board"

I've already briefly touched on the idea that ESOPs vary in several ways from direct stock ownership. If you go out and buy 100 shares of The Sexy Green Pants Company, you'll be entitled to 100 votes when it comes time to make big decisions about the company like merging with The Saucy Red Pants Company or selling out to The Sensible Black Pants Company as well as other important corporate issues like electing the board of directors.

Participating in an ESOP does not empower you as much as purchasing the stock yourself. In publically traded companies, employees participating in ESOPs must have some sort of voting power on all the issues that a regular shareholder can vote on. In private companies, ESOP participants only need to have a say in those major, company-altering events like selling or closing the business. This sounds pretty good considering you're probably not even spending your own money on company stock, right?

In reality, voting rights for ESOP participants aren't truly voting rights. If you have the equivalent of 50 shares in your ESOP, you don't get 50 votes. You don't even get one vote! Instead, it's the trustees of the ESOP who have the voting power granted by the shares in the ESOP. These trustees are free to do as they please and can even make decisions without consideration to anyone else. Most often, though, the trustee will vote the ESOP shares either according to the wishes of the committee that administers the ESOP or, if you're lucky, to those of you lowly employees.

There are plenty of other rules governing ESOP voting, many of which allow companies to restrict an individual employee's ability to have any real influence in big corporate decisions. So if you're looking to wield some real power, you might want to look into more direct forms of stock ownership than an ESOP provides.

Summary of ESOPs

What, you thought I was going to talk for ten hours and not give you a CliffsNotes version? I'm a nice guy!

ESOPs are investments in your company. Performance of your ESOP money is directly tied to the performance of your company. Employers expect that ESOP participants will work harder for the good of the company. You'll do that, right? Of course you will!

Your employer dictates when you are vested in your ESOP shares, though the law requires 100% vesting within seven years, sometimes sooner.

40l(k)s and ESOPs are a great combination. The pairing of ESOPs and 401(k) retirement accounts is becoming more and more common. In most cases, employers will match part or all of employee 401(k) contributions with ESOP shares...

...but don't let your retirement portfolio get too ESOPpy. If left undiversified, you could end up with one-third or more of your retirement money riding on the success of your company. If your company allows diversification of your ESOP funds before the government-mandated age of 55, it might be a good idea to spread some of your ESOP balance to other funds.

ESOP voting powers are often limited. Because of the way ESOPs are structured, your ability to use ESOP shares in important company decisions can vary. Typically you won't have anywhere near the same voting rights as normal shareholders.

Of course, ESOPs can come in all sorts of sizes and shapes and have special caveats that require you to milk the CEO's baby goat three times a year. So if you have an ESOP at work and you'd like to learn even more about them, aim your web browsing device at these babies:

An Interactive Introduction to ESOPs
Wikipedia - Employee-owned corporations
SEC and ESOPs

In part three of this series, we'll look at ESPPs and why a one-letter difference from ESOPs can mean a whole lot of difference for you and your money.

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The Wonderful World of Employee Stock, Part 1: Getting Started on Owning One Billionth of Your Company

2006-01-17T21:46:00.000-05:00

Look out! He's writing a SERIES!!! Head for the hills!

That's right, the first multi-part adventure finally begins here at Funny Munny. Over the course of the next 82 months (or maybe a few days if I cover everything sooner), we'll be looking at all the different ways that you and the stock of your employer can interact. You might think it's as simple as owning or not owning your company's stock, but it's far, far more complicated than that. Actually, it isn't, but if I say it's easy you'd go read about it somewhere else. So it's extremely, mindnumbingly difficult and without my help you'll lose all your money and the SEC will search through your underwear drawer if you even say the word "stock" while at work.

Now that I have your terror-induced attention, we can start talking about all the different ways you can get your hands on a chunk of your company's stock. First off we--

So what are my options for purchasing stock in my company?

Whoa! Where'd that big bold question come from? No matter, it sets up my first topic very nicely.

There are three common ways for an employee to play with company stock: an Employee Stock Ownership Plan (ESOP), an Employee Stock Purchase Plan (ESPP), or a stock option plan. At first, they sound like the same thing--plans for acquiring stocks. And that's entirely kinda sorta true not at all. There are some major differences between the three that--

What's an Employee Stock Ownership Plan (ESOP)?

Okay, Mr. Bold Question Man, if we're gonna do things like this, you need to wait until I finish answering a question before asking another one.

Sorry. I'm just excited about Employee Stock Ownership Plans!

That's okay, we're all just as excited. Anyway, an Employee Stock Ownership Plan is the most common of the three options. Despite having the word "ownership" in its name, ESOPs don't actually let you own any stock. Instead, an ESOP is a big trust that invests solely in stock contributed by your company to the plan. You still get most of the benefits of stock ownership; if your company does well, your contributions earn more. In return, your employer gets some nice tax savings and maintains control of the business. Contributions you make to an ESOP can be done on a before-tax basis, so they are often combined with a 40l(k) plan. In some cases, your employer will match some of your 40l(k) contributions in part or completely with ESOP contributions.

So then what's an Employee Stock Purchase Plan? (ESPP)

Unlike an ESOP, the money you contribute to an ESPP is used to directly purchase stock for you. You make contributions to an ESPP over a certain period of time, and at the end of that period, your employer purchases the stock for you. The price you pay for each share is typically either the price at the beginning or end of the period, whichever is lower. As an added bonus, you might even get a discount on the purchase price of the stock--sometimes up to 15%. These discounts often mean that you make a decent chunk of money on your contributions right away since they're worth the full price of the stock. As such, some people will sell their newly acquired stock immediately for a nice profit. If you hold on to the stocks, you'll own a tiny part of your company and can vote in certain important business decisions such as board elections and what your boss is having for dinner tonight. Of course, you'll probably only have a few hundred shares of your company stock compared to the millions that exist, so you won't want to tap dance naked on your manager's desk.

And stock option plans? How are those different from ESOPs and ESPPs?

Stock option plans have three important components: a number of options, an option price and a time period during which you can exercise your options. For example, if your company gives you a one-year option to buy a share of stock for $50, and during that year the stock's price goes up to $80, you can exercise your option at that time to buy a share for $50 and (if you decide not to keep it) immediately sell it on the open market for $80--a $30 profit per share. While you don't get the voting rights that come with being a regular shareholder or participating in an ESPP, you are protected from losing any money since you wouldn't normally spend a dime until you exercise your options for a profit.

Of stock option plans, ESOPs, and ESPPs, which one is the best for me and my money?

Usually your best option is the one available to you since it's rare for a company to offer more than one to all of its employees. If you do have a choice between the three, then your decision depends on your reasons for dabbling in your company's stock. If you just want to make some money with no risk, stock options will help you do just that. ESOPs are geared more toward long-term investment. ESPPs fall somewhere in between since you can often sell your purchased stock immediately for a profit when you consider any discounts you may receive, or you can hold on to your stocks and possess the same rights (and risks) as other shareholders.

Next time, we'll get into juicy detail about ESOPs--how they work, things to watch out for, and tips for making the most out of your ESOP experience.

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The Prodigal Get Frugal and the Frugal Get Frustrated

2006-01-16T18:45:00.000-05:00

As my ever-growing bank account can tell you, being frugal really has its rewards. Of course, being a spendthrift also has its rewards and those rewards are generally much more immediate and short-lived than those experienced by those who choose to save instead of squander. A youth full of charging up credit cards can be loads of fun ... until the credit card bills come due.

And yet, more and more every day, those who have been loose with their wallets are being saved thanks to the advice of the frugal--those chosen few who have seen the light and decided to turn it off to save money on their electricity bills. The wave of frugality soon spreads across the land, and in the end we're all saving so much money that the average retirement age drops to 35.

It goes without saying that this'll never happen. The lure of "free money" that credit can provide is too strong for many people. And while I certainly don't condone this sort of spending behavior, I can understand why the concept of saving money would not be attractive to someone more interested in living it up today than planning for tomorrow.

I'm fortunate that I never became one of those people drawn in by the lure of an easy life now at the expense of endless money troubles later. I've always practiced the basics of frugality--eating in, keeping energy costs down, and only spending money that I actually have and only when I really need something. The results: I'm out of college with no student loans or credit card bills, and I'm already saving for retirement. Now while I'm thrilled with all I've accomplished in my personal financial life, I'm a little dismayed that there aren't any major steps I can take to become even more frugal without experiencing unnecessary hardships.

Yes, folks, I'm suffering from Frugality Frustration.

It's easy enough to self-diagnose Frugality Frustration: symptoms include bank accounts full of money, credit cards with no balances or transactions for $300 shoes, bills that are paid on time, and countless measures taken to save money on groceries and utilities. Alas, you've seemingly reached your peak savings rate, and there's nowhere else you can scrimp a few pennies without freezing your butt off in winter or eating bugs for breakfast.

This can be a turning point for a person following the path of frugality. Finding new ways of saving--arguably one of the best rewards of being frugal--becomes harder and harder the more you do it. And when that reward doesn't keep coming, it becomes easier to slip back into a more prodigal life. Frugality Frustration, if not recognized and dealt with, can ultimately undo all the accomplishments you've worked so hard to achieve.

Lucky for you, there are ways to combat Frugality Frustration, and they all focus on helping you to more fully experience the rewards that come with a frugal life.

Five Ways of Fighting Frugality Frustration

Can't find new ways to save? Get creative! So you've got your thermostat at the bare minimum, you're eating out once a decade, and the clerks at the supermarket give you dirty looks when you pay six bucks for a cart full of groceries. Is this the true limit of your frugality? Probably not. While it might be true that it's not worth it to chip at your budget any further because all you'll get is a penny or two saved here and there, this doesn't mean you should stop. Frugality isn't just about saving money; it's about having fun finding ways to save. The opportunities may not be as numerous once you've been at it for years, but when the chances come, it's up to you to spot them. For example, now that energy-saving fluorescent light bulbs are relatively cheap, it might be time to go on a bulb-changing spree through your house. Or if you want to shave a few cents off your food bill, consider starting your own hydroponic garden. The point is that there's always another way to save, and it's not until you reach Frugality Frustration that some of the most creative ways make themselves apparent.

Remember how far you've come. If you've made it this far, then you've probably saved yourself thousands of dollars living a frugal lifestyle. While you might not have an Olympic swimming pool in your backyard or a French maid in your kitchen, you probably don't have massive bad debt or bills you can't afford to pay. It's important to realize the difference between the frugal you and the you that could have destroyed your financial future. Look back at all you've achieved and give yourself a pat on the back. And while you're at it, because you know you want to, feel free to snicker at your frugally-challenged friends who, while I'm sure they're very nice people, will probably be working for the rest of their natural lives to pay for their extravagant lifestyles.

Consider the ultimate goals of your frugality. You're saving money left and right, and you know you must keep saving or else some great calamity will befall you from the heavens! DON'T STOP SAVING OR YOU WILL BE EATEN BY WOLVES!!! I'm exaggerating a little (the wolves will merely nibble on you), and while frugality requires that you stick to it, it's important to keep in mind why you're doing it. Each person's reasons for living a frugal lifestyle is a little different, but many people do so with an eye toward an early, comfortable retirement or some other lofty future goal. Saving lots of money takes years or even decades, so it can be easy to lose sight of that ultimate goal which seems so far off. When you're sitting down to go over your finances, don't forget what those dollar signs in your savings and retirement accounts mean. For you, they could mean that you can quit your back-breaking day job in ten or twenty years and work part time at your dream job where money is a secondary objective. Or they could mean making some improvements to your home in a few years like putting in that sauna or game room or time machine you've always wanted. Or they could mean that your children will have the secure financial upbringing you might not have had; they'll always have a full tummy, nice clothes, toys to play with, and a good education. Whatever your reason for saving money, never ever forget it.

Don't let yourself get burned out. If you've taken every measure you can think of to become more frugal and if keeping your ultimate goal in mind doesn't cure your Frugality Frustration, it's quite possible you may be burned out. You might be trying too hard to squeeze every penny out of your costs and into your savings, and it could be doing you more harm than good. The easiest place to spot this is in your pantry. If your cupboards are full of processed foods and bulk this 'n' thats just because you got them on special, you're probably putting your wallet before your health. Eating right is not something you can fool around with just to trim a few bucks from your budget. In the end, it'll end up costing you more in doctor's bills than, say, making sure you eat a good amount of fresh fruits and veggies. And while you think keeping the thermostat at 52 degrees in the middle of a blizzard will save you lots on your utility bill, people are not built to live in those kind of temperatures. The whole point of living a frugal lifestyle is to save money without hardship to yourself or your family. You must take care of yourself today so that you'll be able to enjoy the benefits of a frugal lifestyle tomorrow. Examine all of the steps you've taken on the path to frugality and see if there's anything you're doing that might hurt you more than help. Remember, a few bucks saved at the expense of your health is a few bucks you won't be around to spend later.

Spread what you have learned to others. I was only joking earlier about laughing at your friends for their lack of frugality. Instead of mocking your buddy for his 600-channel cable setup that gets 472 channels of Swedish soap operas, show him how he can save $50 a month with a smaller package of his favorite channels. Or instead of leaving copies of your high-yield savings account statement on your neighbor's doorstep with the APY circled and the words "Ha ha, I'm saving more than you!" written on it, help your neighbor set up her own account with ING Direct, Emigrant Direct, or HSBC. There's plenty of frugality to go around, so there's no point in keeping your tactics for saving money a secret. At the very least, instead of having a bunch of friends always trying to bum money off of you, you'll have a bunch of friends trying to coax more money-saving tips out of you.

Now if you'll excuse me, I need to break into my neighbors' apartments and replace all their lights with fluorescent light bulbs. Good-bye, Frugality Frustration!

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Your Opinion Counts ... As Much As Those of 20 Million Other Bloggers

2006-01-12T18:58:00.000-05:00

"The blogosphere is overflowing with brutally honest opinion," says Howard Kaushansky, Umbria's 47-year-old CEO. "Our goal is to track those opinions down."

My daily voyage through the cornfields of the internet brought me to a fascinating article written last month by Fortune Small Business. Apparently many companies will pay another company to find out what I think about their products. I guess that's nothing new since consumer surveys have been around since prehistoric times. But when I saw the line "Meet an entrepreneur who can survey 20 million consumers in two minutes," I figured this was either someone who can talk and write really fast or someone with a website that gets, oh, ten bazillion hits a day. Nope and nope. It turns out that Umbria is one of many companies that searches blogs like yours and mine for our opinions on products and services. So for Coca-Cola to find out what people think about Vanilla Coke, they just needed to fork over about $60,000 to Umbria, and Umbria would have come back a few minutes later to let Coca-Cola know that X percent of bloggers think it's inconsistent, flat, or just plain terrible.

The real fun comes in with how Umbria distinguishes between 12-year-old boys talking about sports cars they can't afford to drive and 30-year-old married women talking about minivans they need to buy to carry around their seven children...

Elongated spellings ("soooooooo"), multiple exclamation marks (!!!) suggest a teenage female. The blogger is probably a teenage boy if a posting is rife with hip-hop terminology such as "aight" (translation: "all right") and "true dat" ("I agree!").

Okay, I can believe that. The next part is a little scarier...

Male baby-boomers, on the other hand, tend to favor stale hip-hop-isms such as "jiggy" and "bling." They also pepper their blogs with terms such as "prostate" and "IRA."

Wait, I have a point! The lesson to learn here is that our blogs are being "read" by big-time companies who want to know what we think about their products and services. If you think that complaining about something in your blog--for example, Dell's technical assistance or a missing ten-by-two pink brick in your latest Lego batch--won't get noticed ... you're probably right. But if you and ten thousand other bloggers all agree that, again for example, Mountain Dew should only be green, then you might not see red, orange, and blue Dew on your next trip to the grocery store.

Okay, Umbria, let's see you work your magic on this honest-to-goodness opinion of a white male between the ages of 18 and 25: Kellogg's needs to bring back their watermelon Pop Tart. I repeat, give me back those scrumptious watermelon Pop Tarts. And I obviously have lots of money to buy them with seeing as I got too jiggy and now there's bling in my prostate.

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Cough Syrup Doesn't Work? Time to Switch Back to Booze!

2006-01-11T19:18:00.000-05:00

I'm getting over some sort of cold as I type, so the timeliness of this article is ... timely.

Looks like I won't be picking up that truckload of cough syrup after all. Thanks to BloggingBaby for letting us know that over-the-counter cough syrup is a sham. I probably should've figured this out on my own ... and so should all of you! For shame!

Okay, so we had no real way of knowing, though you have to wonder what sort of studies the cough syrup makers conducted that led them to believe their products worked. Does this mean we'll see a bunch of false advertising lawsuits filed against the manufacturer of Robitussin? Probably (Nick's Rule of Starting a Business #1: If you build it, they will sue you.), but our over-medicated society won't let these remedies disappear from drugstore shelves. I doubt even a big label reading "WARNING: THIS DOES NOT WORK" attached to cough syrup would discourage people from buying it.

Now if you're open to alternative medicines, I highly recommend chocolate to help relieve coughs, increase sexual appetite, and spark world peace.

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health

The Business Landscape of the Future: General Antimatter, Clones 'R' Us, and Intergalactic Business Machines

2006-01-09T20:37:00.000-05:00

While I've got the old financial crystal ball out, I figured it would be fun to envision some of the new business opportunities that will be awaiting us in 40 or 50 years. Easier said than blogged since I can't imagine anyone 50 years ago thought we'd be using a network of millions of magical boxes to purchase ferret hammocks and robotic vacuum cleaners. At the current pace of technological advancements, in half a century we may be living on the moon and commuting to work via demolecularizing teleportation. Well, maybe things aren't moving that fast, but there's no doubt in my mind that the economic landscape will be drastically different by 2050. Just what sort of businesses will be setting up shop on your street corner by the mid-21st century? I've used my magic, alcohol-activated powers of divination to peer into our future, so make sure to save a few hundred million dollars (inflation, duh!) to invest in these light-speed ventures.

It's 2050! Are these industries in your portfolio?

Robot repair. The present-day equivalent of this industry-to-be is computer repair, and plenty of peope make an absolute killing at helping the technologically uneducated install anti-virus protection and wireless home networks. Still, for the most part, computer repair is relatively inexpensive when compared to, say, space station repair. By 2050, there will likely be a robot in most middle-class homes to aid in everyday household tasks like cooking, cleaning, and perhaps even contract killing. But once that robot burns the pot roast, forgets to dust before vacuuming, or assassinates the wrong foreign diplomat, we'll be needing robot repairmen by the starship-load. Now consider the complexity of a robot: hardware more advanced than that found on a nuclear submarine, algorithms more complicated than this one, and batteries you can't just replace with a quick trip to the drugstore. And since complicated household robots could cost as much as a car, throwing one away and buying another whenever it breaks down might not be an option. Imagine today's world with only 1% of its current automobile repair specialist population; that's the crisis awaiting tomorrow's robot-run world. Become a certified robot fixer-upper (better yet, start a training school with multi-million dollar tuition) and you will be making more than an eight-armed lawyer ... in fifty years or so.

LoooOOOooong-distance telecommunications. Forget 35 cents a minute for a call from Pittsburgh to Pakistan; your phone bill in 2050 may include two-hour subspace transmissions with loved ones on the Moon or Mars. The fact that my cell phone won't get a signal in the bathroom makes me wonder if we'll have a cheap way of providing common folks like you and me with instantaneous, interstellar communication lines. While I'd love to see us run a few million miles of Cat-5 cable from Earth to Earth: The Sequel, it'll probably be less expensive to develop and implement something a little more advanced. Come on, Verizon, open our hailing frequencies already!

Universal translation. No, I'm not talking about human-to-Klingon translations. By mid-century, the concept of "national languages" may be defunct as people of different cultural origins spread all over the planet. Nowhere else will this be more true than the United States where the present minority is expected to become the majority. I doubt the average person will want to learn multiple languages, but being able to understand them may prove vital to large international businesses or small, culturally-diverse neighborhoods. Research and development of tools to aid us in understanding those around us will be critical to all facets of life in the future.

Alternative fuel. Forget oil, coal, or electricity. There might not be enough of any of these by 2050 to help power man's lofty endeavors while still keeping the lights on in your garage. You probably can't go to the store or service station to pick up a gallon of the fuels we'll most likely be using in the future: fusion, hydrogen, solar power, and even everyone's favorite fictional-but-not energy form: antimatter. Whatever its form, the power of the future will need specialists to help harvest it, contain it, and dispense it. The real question: do you trust your local gas station attendant to pump your car full of a fuel that could vaporize the entire planet in seconds?

Nanotechnology. While most of the world will be thinking big, some scientists are working as we speak to make sure we'll all soon have little machines floating around our bodies keeping our organs working optimally. You can actually find plenty of nanotechnology investment opportunities now, though most of them are research-oriented. In fifty years, getting your yearly shot of microbots will be as commonplace as getting a flu shot is today.

Leisure, mid-21st-century style. Hopefully the year 2050 will bring entertainment options more exciting than drinking moon beer from a rocket keg. Whether it's honeymooning on the International Space Station, spending the day at the local holographic recreational center, or taking the kids to Epcot Center (which will be converted to an antique museum), people will need a place to unwind after a grueling 140-hour work week. Having fun five decades from now may be more expensive, and operating those high-tech entertainment venues may not be within the skill range of any high school drop-out satisfied with making minimum wage.

Super-duper internet. I'm hoping that will be the official name for it, but whatever you call it, our world will be so full of information in fifty years that you'll be able to feel it in the air. Who knows what form the information super-highway of the future may take? Will we have vast fields of servers as big as Rhode Island? Or will data just exist in a virtual aether all around us? I'm sure if you can come up with the answer to these questions (before a certain other company does), you may very well own the world of the future ... or at least all of its information.

Of course, these are just my guesses. Sorry, but I was just kidding about my alcohol-induced fortune-telling abilities. Drinking will not improve your economic forecasting skills, so please keep your imbibing to a minimum ... at least until they come out with a robotic liver.

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business

Destined to Disappear: What Businesses Might Not Be Around in Ten Years?

2006-01-06T22:58:00.000-05:00

Even at the age of 23, I've already seen my fair share of big companies go bankrupt, merge with other companies, or otherwise disappear from the landscape of my life. When I was 14, the F.W. Woolworth store at the local shopping mall closed. I missed it so much. Much of my childhood toy and videogame collection came from its five-and-dimey goodness, and its disappearance marked the beginning of a mass exodus of all the best stores in the mall.

It was an even darker day when Montgomery Ward went belly up. Half my childhood clothes and my Nintendo Entertainment System came from there. And who could forget Monkey Ward's Electric Avenue??? It was an avenue ... of electric stuff! There's a Wal-Mart in its former location.

Chuck Saletta over at The Motley Fool wrote an article discussing the inevitable mortality of most businesses along with some he predicts won't be around a decade from today. His two predictions for companies that may soon buy the farm: the behind-the-times Cincinnati Bell and Blockbuster Video. While both companies are struggling to keep up with advancements in their industries, Blockbuster is losing major ground in the DVD rental world to Netflix, and Cincinnati Bell seems to have just discovered the touch-tone telephone.

Around here, Bell Atlantic evaporated into Verizon a while ago, so there's no equivalent company in my state. Blockbuster, on the other hand, has a store next to every other Starbucks, so I can definitely see a lot of them closing up shop in the next few years (gotta put more Starbucks somewhere, ya know?). I've got a few predictions of my own for companies that won't be joining us in the year 2016. Just remember, these are wild speculations; please don't go dumping your stock in them or running up to their employees just to laugh and point at them.

Are these companies heading for that great stock ticker in the sky?

Krispy Kreme Doughnuts (NYSE: KKD) You know a company is in trouble when its own franchisees start to sue it. Sure, it's coming out of a major restructuring, and it's made some smart decisions by closing a bunch of those extra stores from the big "Doughnut Boom" a few years ago. And yes, I'm betting against the company that currently employs my very own wife. But if people's changing diets and unending lawsuits don't deflate these doughnuts, then the federal investigations just might.

Martha Stewart Living Omnimedia (NYSE: MSO) Who knows; ten years from now, maybe most companies will be founded by, named after, and operated by convicted felons. Prisons will all be equipped with executive conference rooms from which inmates can operate their businesses. Maybe orange jumpsuits will replace shirts and ties as the standard office outfit. While it seems most people have "forgiven" Martha Stewart for her horrible crimes against humanity, Wall Street is still seeing red. But wait, they've got a plan to restore the company to its former glory! Apparently Martha Stewart Omnimedia will be riding the scrapbooking wave to financial prosperity. I wish I could make $962,000 a year to come up with ideas like that.

Best Buy (NYSE: BBY) Yeah, this one's a stretch, and it could very well outlive all of us. I mean, Best Buy's not in any financial trouble or anything, and they're coming off a strong holiday sales season. So what earned Best Buy a spot on my death watch? Quite simply, they're about as greedy and evil as a company can get. Some of you may recall Best Buy's revelation from 2004 that some of its customers are devils who only show up in store for loss leader and rebate-bearing items. Most recently, Best Buy was forced into apologizing for bundling many of its already expensive Xbox 360s with even more expensive extras. Some may call this a smart business tactic, but the day will come when nobody has been untouched by Best Buy's excessive avarice. So yes, I hereby predict the demise of Best Buy solely based on the fact that it's operated by meanie poopie heads.

Kmart, and probably Sears (NYSE: SHLD), too. What's that? No fair picking on companies that just emerged from bankruptcy? My apologies, but Kmart's troubles seem to be far from over. As Wal-Mart's steamrolling across America continues with no end in sight, Kmart has decided that the key to its future success is to emulate its biggest competitor as closely as possible. Maybe this strategy will buy Kmart a few years, but in a fight between Wal-Mart and Kmart (heck, between Wal-Mart and anything), the odds just don't look good for the Big K. As for Sears (which exists under the same holding company as Kmart following last year's acquisition), I just can't help but get the Montgomery Ward vibe every time I set foot in one of its stores.

Yahoo! (NASDAQ: YHOO) I sure hope nothing happens to these guys because then I'll have a bunch of broken links in this article! And I'm sure Yahoo! won't just curl up and die as long as the internet is still around. Rather, I think Yahoo! will end the second decade of the 21st century with something like "Time Warner" or "Microsoft" prefixed to its name. It's a strong company, no doubt, but all the exclamation points in the world won't help Yahoo! survive alone in the battle with Google. Someone with a few billion dollars to spare will snatch this one up and then the real fight for the internet will begin.

kweee.blogspot.com (NYSE: WTF?) Why is such an awesome business on this list? While I could easily stand on my own for a good five hundred years, I predict that Google will buy me out for one BILLION dollars by the end of the year. If not, then maybe Martha Stewart will slip me ten bucks to take her company off this list.

I asked Tegan what company she thinks won't be around in a decade. She said Wendy's because it doesn't have Dave Thomas to do its commercials anymore. Hey, her guess is as good as any of ours!

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Flexible Spending Accounts Strategies... Other Than Buying Tylenol and Cough Syrup By the Truckload

2006-01-05T18:51:00.000-05:00

The United States is a great place to live. We've got foot-long hot dogs, demolition derbies, twenty-lane interstate highways, and more ways to gyp the government out of income taxes than I could ever write about. While I'm still young and haven't yet had the chance to experience the full range of tax credits, deductions, and incentives, there's one option currently available to me that's looking more and more appealing every day: the Flexible Spending Account (FSA).

For those people reading that are fresh out of the womb and don't know what an FSA is, here is a simple explanation. FSA is a magical land where you can send some of your before-tax paycheck dollars. Once in the magical land of FSA, that untaxed money can then be withdrawn to cover certain expenses. Sounds fantastic, right? Time to start shoveling every penny into FSA Land, right? Well, the government's not that dumb; there are some limitations that prevent you from using that money to buy, say, 100 Ferraris with untaxed income. For starters, FSA money can only be spent on two main categories of expenses: medical and dependent care. Eligible medical expenses include things you might expect--doctor bills, copays, prescriptions, and many other common health care expenses that might not be covered by your insurance--along with a bunch of items that might not immediately occur to you are qualified medical expenses--over-the-counter drugs, medical hypnosis, and weight loss programs to name a few. Eligible dependent care expenses are a bit harder to list, but they generally cover assorted costs associated with caring for a child younger than 13 or an elderly relative or disabled child of any age. Whereas health care spending accounts have a pretty well-defined list of qualifying expenses, dependent care FSAs seem to take more of a "not these items" approach.

The other big gotcha of Flexible Spending Accounts is their "use it or lose it" clause. Any money you put into FSA Land during a particular year must be used before the end of that year or else it disappears into another magical land: The Land of Ha Ha, Your Money's Gone and You Ain't Gettin' It Back. Starting in 2006, employers now have the option of extending the deadline to use FSA funds to the middle of March the following year.

Deciding whether or not to use an FSA and how much of your paycheck to set aside can either be really simple or somewhat difficult. If you know you're going to spend $5,000 a year on, say, your child's day care, just max out your dependent care spending account since the IRS says $5,000 is the maximum anyone can put into a dependent care FSA per year. Of course, if you don't have kids or other qualifying dependents, it's an easy choice to leave the dependent care FSA empty. Except for unexpected situations that I hope no one ever experiences, dependent care expenses are easy enough to estimate a year in advance, so some careful planning and smart calculations should help everyone make the most of this flavor of FSA without ending up wasting those wonderful pre-tax dollars.

Medical FSAs, in my opinion, are much harder to use "perfectly." Unless you're going to use the maximum allowable annual benefit (which is set by individual employers, not the IRS, though many companies I've seen stick with the $5,000 value), you're either going to lose the leftover money in your FSA at the end of the year or you'll have more expenses than you have pre-tax dollars set aside to cover. The second outcome seems more difficult to avoid since planning for big, uninsured medical expenses from year to year is much harder than anticipating dependent care expenses. Avoiding wasted FSA dollars can also be tricky, and it's the main reason I haven't put a dime into one since I started working. Apparently three percent of FSA dollars are wasted each year, but your employer thanks you since they can use that money to cover the costs of operating FSAs. Since my wife and I are generally healthy and have insurance, our FSA-eligible medical expenses per year come down to a couple of doctor copays and maybe some Tylenol and cough syrup. In a good year, we'll spend under $100 on eligible medical costs, and my employer won't let us put any less than $100 in an FSA annually. Now if you consider the tax savings on $100, we'd actually break even as long as we spent at least $75 of that money.

I think I'll be able to talk myself into going with a health care spending account either this year or next, even if it's just at the minimum amount. If you're in a similar situation, or you already have an FSA and need to find ways to spend your FSA balance before year end (or March 15th of the following year if your employer allows), consider the items below on which you can spend those precious before-tax funds.

Some Items Covered By Medical Flexible Spending Accounts

Over-the-counter drugs. Thank you, IRS, for deciding back in 2003 that allergy medicine, pain relievers, antacids, and a host of other medical goods available without a prescription are eligible for FSA spending. If your FSA year is coming to a close, check the dates on everything in your medicine cabinet and make a trip to the drug store to replace the expired ones. Also, anti-fungal creams make great Christmas gifts for the entire family, so stock up! Unfortunately. there's one item that's "missing" from the list of covered medications: vitamins. That said...

Vitamins ... if your doctor says so. We've been told for years that a multi-vitamin as part of a balanced diet is good for us, and so millions of us take those vitamins without so much as a suggestion from a physician to do so. Instead, talk about vitamins with your doctor and convince him to give you a letter of medical necessity that will make those vitamins eligible for FSA coverage.

Baby factories. If you're trying to crank out the kids and you find that you might need a little help from modern medicine, these expenses can be covered by your FSA. All the bases from extraction to injection are eligible: embryo and sperm storage, in-vitro fertilization, and even sperm washing! (I don't think I want to know what that last one is.) Of course, if you've got all the children you want, or you're happy keeping the kid count at zero, there's also...

Condoms. While being a good Catholic boy keeps these out of my medicine cabinet, condoms and various other birth control implements are just screaming for your FSA dollars. Heck, I know a few people who could hit their employer's FSA maximum every year with just this category! You can even get more permanent methods of birth control performed with FSA money.

Contact lenses and eyeglasses. Tired of running into walls and the wrong bathroom at work? It might be time for a new pair of prescription glasses or some contact lenses. They're fully eligible, and they can even be used to start fires if you're ever stranded on a desert island. Me, I'd like to be stranded on a dessert island, so I might need the next item when I make it back to civilization...

Weight loss programs. If your doctor tells you it's time to lose that extra 600 pounds, you may be eligible to put FSA money toward the various costs associated with doing so.

Counseling. Depressed? Insane? Underperforming in the bedroom? Many types of licensed counselors are FSA-eligible and waiting to talk to you about your childhood or your obsession with sniffing women's shoes.

Dancing lessons. Some doctors think dancing will help you recover from injuries faster, and they'll sometimes even prescribe it! If they do, you're in luck because you can use your FSA to pay for the lessons. Just please, don't break a leg on purpose so you can learn to tango.

Flu shots. The best tax-free dollars you'll ever spend on your health.

Laser eye surgery. I really wish this meant that you could get attachments to make lasers shoot out of your eyes, but being able to see better is nice, too. This can be pretty pricey and many insurance companies won't foot the bill for it. Using your pre-tax FSA dollars is like a 10-30% discount for expensive elective procedures like this one.

Transferring medical records. Sometimes you'll have to pay a small fee to have your old doctor send medical records to your new one. It's probably just a few bucks, but why not use your FSA dollars instead of the ones in your wallet?

Orthodontia. If you've got four kids with crooked teeth and a big chunk of your weekly paycheck is going to paying for their braces or other orthodontia, use FSA dollars that might be forfeited at the end of the year on any such items you may have on an installment payment plan. Or just use FSA cash to pay for them in full at the time of purchase.

Alcohol treatment. Give the gift that keeps on giving: send your drunken spouse to a rehab clinic, and pay for it with his or her FSA dollars.

Swimming pool/spa. Remember how vitamins are eligible if your doctor gives you a note? So are swimming pools and spas! If you can convince your doctor (or your doctor convinces you) that a swimming pool or spa would be of benefit to your health, your FSA dollars can be used to pay for its installation and maintenance. I don't think there's a person alive who wouldn't experience some health benefits from a swimming pool... well, maybe people with hydrophobia. Unfortunately, any "The government helped me pay for this pool" signs will have to come out of your own after-tax pocket.

There are many other eligible costs not on this list. And before you start calling your local ballroom dancing school or spa supplier, please talk to your doctor and human resources department to make sure that you will receive reimbursement for these expenses.

One bonus tip: if your annual FSA is funded by payroll deductions over the course of the year, you can "borrow" against money you have not yet made using your FSA. Say you put $100 a week into your FSA. Untouched, your FSA will have about $5,200 in it by the end of December. But then your doctor says, "Sorry, Bob, but you medically need that Olympic-sized swimming pool right now," and it's only April! You can take out all of the $5,200 you pledged to put into you FSA at any time during the year, even if you haven't had the full amount deducted from your paychecks yet.

Sources:
Wikipedia, Bankrate.com, USA TODAY

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Wallet-Friendly Entertainment Options: Don't Be Bored Out of Your Gourd When There's Fun You Can Afford

2006-01-04T20:02:00.000-05:00

They say that the best things in life are free, right? I don't know about you, but I can think of some really great things that cost a helluva lot of money. Once ocean cruises, fast cars, and big houses cost zero dollars, then maybe we'll believe what "they" have to say. (Or maybe they were talking in a metaphorical sense about love, family, friendship, and the feeling of happiness within oneself. If so, awww.)

There seems to be a general understanding in today's society that having fun goes hand in hand with spending money. Trip to the ballpark? That's fifty bucks a person right there. A movie and popcorn? Eight hundred dollars! Not ending this with a corny MasterCard reference? Priceless. Er, wait...

Just because it can cost a hundred bucks or more for four hours of entertainment doesn't mean it has to. My wife and I have found plenty of ways to have fun for little or no money. Now before you go getting your head in the gutter over that last statement, here are a few things we enjoy doing that don't cost much and can even be enjoyed with friends...

Have fun for free or cheap

Board games do not necessarily mean "bored" games. You can find all of the classics--Monopoly, Scrabble, Twister, and countless others--for cheap in most toy stores and online. If you're worried about the games getting old quickly, or if you've already exhausted your massive game closet, try some of the new variations on older games like Triopoly and Super Scrabble or try any of the dozens of excellent games geared toward gatherings of friends. Some games can be a little pricey, but they're something you can hang on to and play again and again for years to come, so the cost quickly amortizes.

Good movies at public libraries. They might not have the mind-boggling selection of your local Blockbuster, but your nearby public library may carry new release videos for a small fee or possibly even free. Many libraries also lend the latest music CDs. While you're there, you can even pick up some books to read. Remember books? Those things that we used for information before the internet? They're not just for kindling!

Look for free things to do in your town. Chances are your taxes are paying for them already, so get out there and enjoy them! Just down the road from here in Washington, D.C., there are tons of free places to visit.

Go to the mall, but leave your wallet at home. Tegan and I love doing this since there are several large malls in the area. The bad thing about shopping malls is that they're concentrated money-suckers. It can be extremely difficult for someone (like, say, a husband who loves seeing his wife wear cute outfits) to keep a closed wallet when there are so many shiny things leaping out at you saying "Buy me! I'll make your body look gorgeous or your room look psychedelic." If you make the trip without the cash or credit cards in your wallet, you can feel free to try on adorable clothes (bring a camera and take shots of you and your friends in thousand-dollar outfits!), picture that seven-foot flamingo statue in your living room, or gawk at a thirty-carat diamond necklace without having to worry about busting your bank account.

A walk in the park or any of the other million things you can do with a wide-open space. Grab a ball, frisbee, or gigantic tub of water balloons and spend the day with friends at a park. Chase the kids off the playground and relive your childhood monkey bar and sand castle memories. Bring a picnic basket full of food you put together yourself and avoid the high prices of eating out. Or take your special someone on a private walk and ... get to know each other better. Just be sure you're really alone if things get exciting. Yes, I'm talking to you, crazy couple from that park a decade ago who didn't realize I was fifty feet away hiding in the jungle gym.

Volunteer your time. While this one is probably obvious, there are many people out there who are willing to volunteer their time, but they associate volunteering with work and no fun, or they don't really know how to go about volunteering in the first place. Sure, if you volunteer for something that you have no interest in, it can be tedious and scare you away from volunteering in the future. I highly recommend the free online volunteer opportunity matching service VolunteerMatch. You can locate a variety of service opportunities in your area, and you can even select from different categories that will help you find a volunteer position you'll actually enjoy. Volunteering is a great thing and helps make this country a wonderful place, but why shouldn't volunteers actually like what they're giving their time to do?

Read this blog! Okay, so maybe the best thing in life is free since it doesn't cost you anything to partake of my wisdom and wit. How lucky you are!

These are just a few of the ways you can keep the entertainment in your life while omitting the wallet-sucking action. If you still don't believe me that spending and having fun can be mutually exclusive, just lock your pocket book in a safe for a few days and try out some of the items on this list. Better yet, send your money to me and I'll hold on to it for you!

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Cash or Carry? Bank Comp Time Or Pay Out Weekly

2006-01-01T21:15:00.000-05:00

I've briefly touched on how my job pays before, but going into 2006, a few things are changing at work that could have a big effect on what my money does after I make it. The biggest change is that we now receive our annual merit-based salary increases in February instead of October. The best part about this deal is that we received raises in October of last year and will get them again next month. Of course, my company was sneaky and reduced the amount of these raises so that they don't lose any money on the deal. Pfft to that, but yay to another raise in February!

The problem I have now deals with overtime pay. Unlike many software engineers who get zero overtime even if they work a zillion hours in a week, I get half-time for every hour after 45 each week. We have two options when it comes to receiving overtime pay. We can either receive it in our paycheck for the week we earn it, or we can put it in a compensatory time bank. Hours accumulated in that bank can then be used just like vacation time, and hours unused at the end of the year are paid out in the last paycheck of December. An obvious advantage to banking hours and letting them be cashed out is that they are paid out at an employee's current pay rate taking into account any raises and promotions the employee may have received earlier in the year.

In previous years, it's usually been of benefit to bank any overtime hours earned before October because they would pay out in late December at the higher rate reflecting our usual October merit-based raises. With a raise of just four percent, that's an extra $40 earned for every banked $1,000 worth of overtime. Of course, that money could earn that much in interest in a high-yield savings account or CD, but that's assuming I receive it all at the start of the year. Sadly, my employer doesn't like paying me months in advance for work I haven't done, so banking any overtime earned before October and immmediately cashing out any after was the way to go. In addition, should I have expected to receive a promotion later in the year, banking the hours until after that point would also be the smartest move.

Now that merit raises come in February, I'm not sure what to do with the overtime I'm sure to earn in the six to eight opening weeks of the year. I don't yet know what my raise percentage will be, though I received a higher performance ranking this past evaluation, so hopefully that will translate to a bigger pay hike. Still, it's a gamble, so let's weigh the pros and cons of banking the hours versus getting paid for them immediately.

Pros and cons of banking overtime

Pros

Potentially earn higher "interest" than any high-yield savings account or one-year CD since it will pay out at my year-end pay rate including any raises I receive during the year.

Employer takes out taxes on "interest" so that I wouldn't have to worry about falling short of my tax liability at the end of the year.

"Interest" rate fixed in that, once I know my raise percentage, I'm guaranteed to get that rate on any overtime paid out at year-end. This protects my money from the possibility of interest rates fluctuating in the bad direction.

Hours usable as vacation should I decide to take off more than three weeks a year. I'm not one to take much of any vacation, so this probably doesn't concern me.

Cons

Potentially earn lower interest if my raise doesn't beat my savings rates.

...or even lower interest if you take into account riskier investments like stocks, bonds, and the like.

Banked overtime isn't liquid like a high-yield savings account. I don't have the option of redeeming the hours at any time unless I add them to a weekly paycheck as overtime, and that would result in the hours being paid out at half their worth.

This list might not be applicable to everyone including those whose year-end comp bank payout does not reflect mid-year raises or anyone whose raises take effect at the start of the year. If you are faced with a similar situation, choosing to bank is the best option if you're inclined to stick with safer investments or if you're looking to take more time off than your vacation allotment allows. But if you're more of the high-risk, high-reward type, you're not sure you'll have a big enough salary increase, or you just like putting your cash in a pool and swimming around in it, it'll be to your benefit to take the money when earned.

Since I am expecting at least another 4% pay jump in February (maybe even higher), I will bank any overtime earned between now and my raise.

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Saving on Groceries: Defeat Your Receipt And Still Eat Your Meat

2005-12-29T17:55:00.000-05:00

One place I'm looking to save money in the coming year is on groceries. You might be thinking, "Dude, you only spend $300 a month on groceries as it is! How are you going to save more?"

You'd be quite right to question my ability to save us any more on our monthly food bill, but I've found a few tips that will definitely help us extend that $300 to make our meals more delicious and filling. I'm sure you're all familiar with the standard grocery tips like buying in bulk (or not!), not shopping while hungry, and looking to top and bottom shelves for deals, but here are a few I hadn't considered before and that I plan to implement immediately.

Plan out the week's meals in advance as much as humanly possible. This one's going to be tough, but for the most part we know exactly when we'll be at home and what meals we'll need to eat while there. At present, our list-making regimen is terrible and consists solely of adding to a list on the fridge whenever we see that we need something. Instead, we're going to try to plan meals for Sunday through Saturday on the previous Saturday and do the shopping on Sunday morning. If at all possible, we'll try to incorporate whatever existing food is in the house into these meals, and when we need something in particular for a recipe or meal, we'll add it to the list. We'll study flyers for the nearest grocery stores to ensure we're getting good prices while leaving room for alternatives in case there are some better deals in store.

I'm hoping that by planning grocery trips better, we'll avoid one of our biggest grocery problems: buying stuff, forgetting it's in the cupboard, and never using it. While getting ready for our move a few months ago, we found some things in the cupboard made by companies that I don't think are around anymore! No more of that! I want to know what's in our kitchen from now on!

Chart grocery prices. Is 47 cents for a can of fruit cocktail a good deal? How about a pork loin for $2.99 a pound? Or a bag of apples for four bucks? Since Tegan and I have been doing the shopping together for a long time, I'm usually pretty good at distinguishing between real grocery bargains and fake ones that make you think you're saving money when you're really not. Still, even I sometimes forget what the normal going price is for a ham butt (79 cents a pound? Ten dollars a butt?). To help with this, I'm going to monitor grocery prices very closely for a little while and keep track of them by date and store. Maybe I'll be able to spot a pattern in how often pasta goes on sale at Giant or when Safeway does its crazy soup deals. At the very least, I'll have data for future grocery trips so that I'll see if the price I'm paying for kiwi fruit is good compared to its regular and typical sale prices.

Making ends meat. Hahaha, what a witty pun. Looking at just about any grocery receipt of ours will reveal that we spend anywhere from 30-40% of our entire grocery budget on meats--poultry, beef, fish, and even Mr. Oink-Oink. Plenty of people get by without eating meat (or anything else that was, is, or might possibly evolve into something living), and while we're not about to jump on that bandwagon, we definitely both agree that cutting back on the roast beast is something we can handle. At least once or twice a week, we'll try to have a meatless dinner--spaghetti without meatballs, a nice big salad, or maybe a hefty stir-fry--and another day or two we'll have a reduced-meat dinner consisting of dishes where meat is more of a secondary ingredient than the main dish. I expect this measure to have the biggest impact on our grocery spending, assuming we stick to it and don't become meat zombies. NEED BRAAAAAAINS OR MAAAAYBE THIIIIGHS AND WIIIIIINGS.

Break out the cookbooks. This one won't save us any money really, but it should help us make better use of the food we do buy. While Tegan and I could both stand to take a few cooking lessons, we can do just about anything a simple recipe tells us to as long as it has lots of pictures and uses small words (i.e. chop, not julienne or emulsify). We need to be careful about this, because whenever we do try out a new recipe, it usually calls for a lot of ingredients and a trip to the grocery store for a bunch of items sold by the gallon when we only need a teaspoon. I'll try to locate a cheap but tasty cookbook of just three- and four-ingredient recipes.

Cook less often. If I can make a lasagna that lasts us two meals, then by golly I'm going to make one! Big recipes that serve six or eight will save just the two of us time and cooking fuel while also allowing us to make use of large quantities of ingredients bought on sale or in bulk. One dinner a week strictly made of leftovers would be ideal for us.

Don't forget the non-food groceries! Another bad habit of ours: automatically assuming that Walmart or Target is the best place to buy toilet paper, detergent, and aluminum foil. Nine times out of ten they are, but grocery store sales prices on these items can sometimes meet or beat those of the super-stores. This will be simple enough to integrate into our normal shopping trips.

So what do you think? Do you have any other unique grocery or cooking hints to share? Or is food one of those things that you just can't help but splurge on because you work hard to save money in all other facets of your budget?

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Goal #1 For 2006: Spend Less Time Thinking Up Witty Blog Post Titles

2005-12-28T23:27:00.000-05:00

Assuming the bird flu pandemic doesn't hit and force us to hide in the closet for six months, we've set a number of financial goals for the upcoming calendar year. If we succeed in meeting all of them, we're going to Vegas and putting it all on red! (Tegan, this is sane Nick. If you're reading this, please hide the checkbook if we meet all of our financial goals for the year.)

Goals for 2006

Stop spending $119 a year on calendars. Honestly, I never know what the date is anyway, so they're obviously not doing me any good. Those appointment book things are even worse because I usually have four or five of them and I never use them to record appointments! I actually already met this goal by getting a single calendar for 60 cents the other day. It's hanging on the fridge and has lots of nice pictures of cats. Of course, I don't like cats, so I won't go near the thing, but that doesn't matter because I never remember the date anyway. GOAL ACHIEVED 12/12/2005!

Increase value of savings and investments by $10,000. I haven't kept track of the value of our savings for more than a year now, mostly because I knew the wedding would take a massive bite out of it. This year, thanks to the wonderful Quicken folks, I'll be able to monitor the value of our savings and investments much more closely. About $6,000 of this is kind of given since it will automatically be deducted from my paycheck on a before-tax basis and put into the 401k, so I'll need to set aside at least another $350 a month to reach our goal. And then it's off to Vegas and I'm putting it all on blue! Wait, what do you mean there's no blue?

Stop paying so many damn taxes. A couple years ago, while I was free-riding my way through college, I had some part time jobs to help cover personal expenses, but I never made enough per year that I ended up owing taxes at the end of the year. Of course, I won't "owe" any this year, but that's because Uncle Sam's been keeping his dirty hands in my paycheck to the tune of a few hundred dollars a week all year. Even though I know we'll be making more money given my impending salary increase in February and Tegan's part-time job, I want to set a goal of paying less in income taxes next year than we did this year. Whether that means having more deducted pre-tax for my 401k or studying up on tax credits, the gubberment ain't gittin' none more o' ma munnies. *cocks shotgun*

Boost our credit ratings. This will probably be the easiest one since it just relies on us doing what we already do: use credit cards for everyday purchases and pay them off at the end of every month. Credit scores are kind of a flaky thing as they fluctuate depending on which finger you use to pick your nose, so I won't use them to set the measurable value for this goal. Instead, if we start getting more good pre-approved credit card offers in the mail (none of that Providian or Capital One nonsense), I'll take that as a sign that our goal has been achieved.

Explore alternate avenues of revenue. I've already started on this, and I hope to expand on it this coming year. Some of these alternate methods for making a few bucks may include finally doing a few eBay auctions for junk around the house (Nick's Dirty Little Secret #3: I have yet to sell anything in an online auction.), putting up a couple of ads on this here blog, and possibly signing up for various bank accounts and credit cards just for their bonuses. If time permits, I might try figuring out some sort of small home business opportunity like something with computers or hamster-powered electric generators. I'm setting a firm goal of making $1,000 before taxes in 2006 through these sort of tasks. And then it's off to Vegas to put it all on 53! Huh? I don't care if the wheel doesn't go that high; I'm putting it all on 53!

Get us both financially enlightened. Steps toward achieving this goal are already well under way. I'm loading more finance blogs in my feed reader all the time, I'm digesting investment web pages by the barrel, and I might even buy a book or two (gasp!) on various money-related subjects. Tegan's not one for the heavy math, so I'll try to pass on some more general pecuniary tidbits to her whenever I can. Maybe I'll add her as an author to this blog so she can keep you all updated on her funny hat collection budget.

Eventually I'll get around to dreaming up some long-term goals, but I'll need to do some more calculations to determine how much we want and/or need to save for the future. Right now, I'm thinking ten GAZILLION dollars by 2020 ought to be enough.

Tags:

goals

So We Give You Pictures of Presidents and You Let Us Live Here? Score!

2005-12-23T18:21:00.000-05:00

So far, it's looking like we live the high life: lots of savings, building credit nicely, planning for the future, and even a pretty little motor vehicle. Of course, you might also think we're homeless and starving because I haven't gone into all of our other monthly expenses. Fret not--we do have a roof over our head and food in our bellies, but those things don't come for free ... unless you live in your office and eat nothing but donuts, but I try to limit myself to doing that just twice a week. Anyway, here's a quick look at the red parts of our checkbook:

Expenses

Rent. Living in Montgomery County, Maryland is not cheap, but it's easily one of the best all-around counties in America. Great education system, solid public transportation, and more entertainment avenues than one could experience in a lifetime. We'll be waiting a few years to look into home-buying, so for now we rent a two-bedroom apartment with about 1000 square feet of space, nine foot ceilings, tons of amenities, and one of those gas fireplaces that I can't figure out how to work. The management here is highly competent and dependable; all I have to do is think about a problem and I come home that day to see it fixed. Our monthly rent is $1495 which is actually a pretty decent price compared to some of the other apartments in the area.

Utilities. We're good on conserving water and electricity, so our bills here are probably a lot less than our neighbors. We take relatively quick showers, turn the water off while brushing our teeth, keep the heat around 67 during the winter and the A/C around 77 in the summer, and perform all sorts of other little energy-saving tricks that would put a smile on Captain Planet's face. Our water bill's around $10 a month, and gas and electricity total $60-70 in spring and fall but usually never more than $130 in summer and winter. Our home and cell phone and DSL internet run another $80 a month.

Transportation. Back when we were living in Baltimore and I was commuting to Rockville on a daily basis, I went through a tank of premium gas every six days even with the 35 MPG the MINI provides. During the peak of gas prices this year, that amounted to about $160 of petrol a month. (I like saying "petrol." It's so British, like my car. Petrol petrol petrol.) Since we moved to Rockville, our gas usage has dropped to about $30 a month, and most of that is used in trips to see relatives on the other side of the state. The MINI is still under warranty for a couple of years, so gas is its only real expense for now. Of course, it's depreciating in value as I type, and it'll eventually need repairs after the warranty runs out, but that'll be long after the monthly car payments come to an end.

Food, or as Tegan calls it, yummies for the tummy. Tegan and I share the cooking responsibilities, though she always makes me a lunch to take to work with me. Between us, we know how to make enough different foods to keep life interesting, and we're ever-so-slowly learning how to make new dishes. We go out to eat once every week or so, but we usually bring along a coupon or two and save a lot of money. We also like recreating some of the dishes made in restaurants to see the difference between the menu price and how much it costs to make at home. Our most recent example is sushi. A sushi meal for two with a menu price of $10-12 (and that's not including drinks and tip) was easy enough to replicate with items purchased from the Safeway across the street; we spent about $5 and made enough sushi for roughly four meals for two. Of course, my sushi isn't quite as pretty as restaurant sushi, but it tastes about the same, and I know all of the bad words in Japanese for all the times when I accidentally cut myself while making it. Oh, our usual monthly food bill (including the trips out) doesn't exceed $300.

Entertainment. Nick's Dirty Little Secret #2: we don't have cable television. We also don't want it because we rarely watch TV as it is. There's plenty of free entertainment on the internet, and when we do plop ourselves in front of the tube, it's usually to play videogames or watch Japanese anime. Also keep in mind that we're married, and there are lots of ways a married couple can have fun that don't cost a whole lot. There's rarely a month when we spend more than $100 on having fun.

Tuition. I was fortunate enough to have a free ride through college thanks to the wonderful taxpayers of the state of Maryland, but Tegan's trodding through part time and we're paying her way ourselves. Figuring in some increases for Fall 2006, this will probably run us about $2,500 in 2006.

Miscellaneous. We have a few assorted expenses that fall through the cracks of the other categories--clothing, gifts, donations to the Church and other charities, and my collection of chewing gum wads that look like former U.S. presidents. These don't figure much into our budget, so you'll rarely hear me talking about these items.

I just started keeping track of these expenses by category in Quicken, so it'll be a while before I have any pertinent data to share. Once I do, you better believe I'll be feeding you more pie charts and bar graphs than a high-strung timeshare salesman with a quota to meet. I know some of you need diagrams on a daily basis to survive, so here's one about puppies:

Tags:

budget

Honey, What's This $184 Charge to "I Luv Midgets?"

2005-12-20T20:36:00.000-05:00

Your favorite doughnut-loving, personal finance blogger is back with more juicy details about our secret stash of limited edition Krispy Kreme Platinum Doughnuts. I mean, here's the scoop on all of those accounts bearing the names Nick and Tegan.

Assets and Liabilities

Checking. Bank of America has the honor of housing our only checking account. I use their billpay option to pay most of our bills (utilities, credit card, etc.). I never have and never will activate this check card they sent me with our account. Why not? Nick's Awesome Money Tip #1: Check and debit cards are garbage. If you're going to pay off your balance every month, it's far better to use a credit card so that you can earn rewards and have the protection that debit cards lack. If a thief gets your check card's number, he can wipe our your whole bank account, and you'll suddenly have lots of bouncing checks. Credit cards--you see a fradulent charge, call up customer service, charge is gone, back to sipping margaritas in the shade.

Savings. I've also got a savings account at Bank of America, but I have no idea why. I've got the minimum $300 sitting in it earning next to nothing in interest. Most of our savings are in a high-yield account at Emigrant Direct. If you haven't heard of them, you're not alone. They're the internet-only branch of Emigrant, a century old bank in New York. Emigrant Direct (ED) offers only one product: a savings account with an Annual Percentage Yield of 4.00%. The catch? None really. There's no minimum balance, and you can transfer money in and out of your ED account by linking it to another checking account. Our ED account is linked to our Bank of America checking. If I want to put money into ED, I initiate an Automated Clearing House (ACH) pull from the ED website and it yanks the money right out of Bank of America. We have a third savings account with ING Direct, another internet bank with an annual yield of only 3.75%. I opened this account less than a month ago with just a dollar purely for the $50 account opening bonus. It doesn't take a math major to figure that our ING Direct account only has $51.00 in it, and as soon as the bonus clears (after 30 days), it will go back to having just a dollar ... unless ING ever overtakes ED's rate. See this article over at the Bank Deals blog to learn why that will likely never happen.

401k. Try as I might, I cannot find any documentation that actually calls it a 401k, but I have the first 8% of my paycheck (pre-tax) put into an account held by CitiStreet. My employer matches 50% of that 8% with company common stock. I've got the money in various investment options, but the company common stock has been performing the best as of late. I think it jumped 2% just in the last 24 hours. Unfortunately, I only opened the 401k a month ago, so that 2% jump translated into about three dollars for me. Suffice it to say, anyone who is able to and doesn't contribute to at least their company's matching limit is missing out on lots of free money and should have to pay a dummy tax to those of us who do contribute.

Liabilities. Just one here: a car loan. That 2004 MINI Cooper doesn't pay for itself, and while I had the cash to pay for it in full, I decided to get the loan because my dad sells cars and got me one with a low rate and because I needed to start building some credit history. Right now, our savings is making more than enough in interest to make up for the interest payments on the loan. I've got about 18 months left on the 36-month loan and am paying $475 a month. Last time I checked, she has a Kelly Blue Book value of about $17,000, though I expect that to drop somewhat significantly in 2006 since most cars devalue quickly after they're two years old.

Credit Cards. Only two of these: a Citi Shell gas card and a Bank of America Power Rewards Visa. Not realizing the awesome power of credit cards until recently, I haven't yet had the chance to apply for a whole bunch. That's one of my goals for 2006--obtain lots of credit. I avoid going above 30% on my credit limits of $1,400 and $2,900 because credit scores start taking a hit above that level of usage. I also pay it off every month in full directly from my Bank of America checking (or, rather, the ED account connected to it).

And since this blog is operating on the basis of an open wallet, here are the current balances on all of the above:

The Power Rewards Visa isn't showing because it has no balance yet and the 401k isn't populated with delicious data because my employer hasn't yet enabled Quicken download support, so I'll have to do it manually sometime.

Come next entry I'll be covering the list of our regular expenses. Here's a sneak peek: 17% of our monthly expenses are for Tegan's midget porn habit. Uh-oh, she heard me type that...

Tags:

personal

This Looks Like a Job for Software Man and His Sidekick, Doughnut Girl!

2005-12-17T20:20:00.000-05:00

Now that you know the who, what, and where of this blog, it's time to get into the "how much." Fortunately for all of you, our financial situation is not that complicated ... yet. (Give us a year of intense financial activity and constant scrutiny from your watchful eyes and I'm sure we'll have money working for us in 48 states and Puerto Rico.)

Our primary source of income is my weekly paycheck from being the best darn software engineer this side of the pond behind our apartment. I started in this position right out of college a year and a half ago, and after an annual raise and promotion, I'm now bringing in regular pay of just over $60,000 a year. Even though I'm salaried, my employer also pays us some overtime--half time for every hour after the 45th each week. Our primary customer is the Federal Aviation Administration, and our product is a suite of air traffic control software that has been keeping planes in the sky for decades. Because my workload depends heavily on the performance of our software at the customer's sites (software works, quiet day; software breaks, OMGWTFLOL), I can have a 40-hour week with not a dime of overtime one week and an 80-hour week with gobs of extra cash the next.

This past week and the next, with most of my department off until the end of the year, I'm looking at 80 hours easy each week. Why am I not off with them? It's certainly not because I don't have vacation time coming. Here comes Nick's Dirty Little Secret #1: I don't know the meaning of the word "vacation." I can take off a hundred days and I will find something resembling work to occupy most of my waking hours. I guess you can call me a "workaholic," except I prefer the term "relaxation challenged."

Tegan, my loving, beautiful, and patient wife, is in college part-time studying to become a teacher. With the rest of her time, she takes care of her "child" (me) and puts in some hours working at the Krispy Kreme a five-minute walk from our apartment. She makes a respectable $7.00 an hour for hanging around the most delicious food in the world. Occasionally she'll break the 40-hour mark after which she starts making time-and-a-half. Since she's between semesters right now, she's been working full time, but that'll probably stop when school restarts in late January.

I feel I should mention that Tegan has the best benefit of any job in the world: free doughnuts. Surprisingly, I actually weigh less than I did when she started the job. I must metabolize torus-shaped foods well.

Tegan and I are newly wed, and since weddings in both our families are big events, our wedding carried quite the price tag--a price tag paid for 95% by yours truly. Even at the expense of half our savings, the wedding was amazing and totally worth every penny. One day I'll share some of our money-saving tips for those brides- and grooms-to-be out there.

That covers the vast majority of our income. We make some money from high-yield savings accounts and investments, but we're pretty new to both games, so those will come into play much more in 2006. I'll talk about those accounts as well as our costs of living in my next couple of entries.

Tegan says hi! Oooh, she has doughnuts! Sprinkled are my favorite...

Tags:

personal

Nick's Finance Blog Secret #1: U$e Lot$ of Dollar $ign$

2005-12-15T22:18:00.001-05:00

I swore it would be a cold day in Maryland before I ever started a blog with a real purpose. I poked my head outside this morning and saw penguins ice skating in the parking lot, so I think today qualifies.

Of course, the question poses itself: just what is a married software engineer with not much hobby-wise going to blog about that a lot of other people would want to read? I guess I could talk about computer stuff; after all, I do know how to build one out of things you can find in your kitchen cupboard. I'm just not so sure that my unconventional mishmash of technological know-how would prove useful for anyone except maybe some 40-year-olds who live in their parents' basements and perhaps a few mad scientists looking to conquer the world with robots made from a can of green beans and some zesty Italian spices.

Then I thought it would be a good idea to start learning more about a new subject area. That way, I can share what I learn with everyone else as I learn it. It didn't take long for me to figure out what I could start studying that would be of most benefit to myself and you wonderful readers. So welcome to Nick's Blog on Male Pole Dancing.

I mean, welcome to Funny Munny, a blog about my journey through the world of personal finance. My name is Nick, and we're going to learn together how to turn $ into $$$$$. (Answer: instead of pressing SHIFT+4 once, press it five times. Hahaha.)

First, a little about myself. I'm a 23-year-old software engineer living in Rockville, Maryland, a good-sized town about 20 miles north of Washington, D.C. Rockville is the area between the middle-of-nowhere western part of Maryland and the hustle and bustle of the nation's capital. We just moved to the area a few months ago from the Baltimore area to be closer to where I work. The other half of that "we" is my wonderful, loving, forgiving wife Tegan (which rhymes with "Megan" and sorta with "bagel"). She's a student in college and she brings in a few bucks working at the Krispy Kreme across the street.

We live in a two-bedroom apartment in a newly built planned community right in the heart of Rockville's technology sector. While the cost of living difference between the Baltimore suburbs and Rockville isn't much, it's still about 50% more expensive to rent an apartment in Rockville than it is to get one about five miles outside of Baltimore. I was commuting about 90 minutes each way for more than a year, so I'm saving a large part of that difference in gasoline. Now that I live 1.4 miles from where I work, my 2004 MINI Cooper uses a tank of gas once every month. Fortunately, that's about how often we visit friends and family in the Baltimore area because gas costs at least 30 cents a gallon less there than it does here. Why is that? I think it's because Rockville is further away from the Middle East, so the gas has to travel farther. Then again, by that thinking, gas in Kansas should be about $15 a gallon, so what do I know?

Dishing out a few hundred extra dollars a month in rent was enough to encourage me to take better care of our personal finances, so I've started taking steps to save more money and make smart investment decisions. While I'm just getting started, I'm hoping we'll save enough in the next couple of years to purchase one of the fantastically overpriced pieces of property somewhere around here. We'll definitely be keeping our fingers crossed for an end to soaring real estate prices and, if we're lucky, for a few "Free house for Nick and Tegan" signs.

The next few entries in this blog will go into some more details of our financial lives including the four "how much" questions (How much do we have? How much do we make? How much do we spend? How much do we save?), our short- and long-term goals, and our plans for meeting those goals. Starting January 1, 2006, I'll be keeping painful details about every dollar that enters and leaves our hands. I'll also be sharing some of the financial tips and strategies that I've been learning to help us save more and make the most of the money we do spend. Finally, and perhaps most importantly, I'll try to break the mold of personal finance blogs by injecting a little humor in my posts. While money is a very serious thing, it doesn't need to be boring, and having a laugh while you save just makes the experience all the more rewarding.

So grab your MasterCard, fire up Quicken, and point your RSS feeds this way for what's sure to be a voyage full of exciting financial discoveries, thrilling money-making enterprises, and more hyperbole than a million blogs!

Tags:

personal