What’s your favorite dumb but fun expense?

If you tell me yours, I’ll tell you mine ūüôā Three years ago I was entering my senior year of college and was in need of a car to begin my adult life. I ended up getting a brand spankin’ new Scion tC. I was set on buying a used car, but with some funding from the parental units, the Scion tC was my destiny. It was love at first drive. Knowing what I do now about the¬†depreciation¬†of new vehicles, I probably wouldn’t have purchased brand new and would have stuck to a gently used car instead, but at the time I didn’t know any better.

By now you might be thinkin’ that the new ride is my¬†“dumb but fun” expense…you’re wrong. As stupid as it was to buy a new car, the first thing I did when I drove it off the lot was cruise on over to the local Best Buy and got two 10″ Infinity subwoofers installed in the back. It set me back a cool 500 bucks (paid in cash) and made my car go boom boom boom. I thought I was sooooo tight because my speakers hit sooooo low.

Fast forward to today, I rarely use the things ’cause they are so dang overwhelming. Although, I do still love my¬†occasional¬†thump session, I wish I went with one 10″ sub instead, or possibly even no subs at all. I could use that extra cash flow for my student loan debt. Thinking about my dumb and fun speakers got me wondering what you PFers have dropped some dollars on that you only kind of regret….like a guilty pleasure if you will.

I posted a short video below of my subs doing their business to my PF Rap for those interested….

*if the video doesn’t work, go here*

¬†¬†Hittin’ hard,

Travel Fund before Emergency Fund…what?!

I’ll be the first to admit it, I’m kind of a blog whore and if your reading this, then chances are, you’re equally whorish. One of the things I find myself particularly drawn to on other PF blogs is the progress bar, much like the one on the upper right corner of this page. It’s a tiny snapshot of that bloggers financial soul. It’s always interesting to see how much debt someone is working to pay off or how much cash they have in their savings account. I like making goals for myself and progress bars allow me the opportunity to see what my fellow bloggers goals are. Progress bars are legit, what’s not so legit is the breakdown of some of these bloggers priorities, especially considering they are personal finance bloggers.

I’m perplexed as to how PF bloggers can have their “fun” progress bars (ie travel fund or new car fund), contain substantially more money than their debt payoff, emergency fund, and savings account bars. I don’t know what to do when I see a PFers travel fund have $3,500 in it and their emergency fund have$30.50 in it. It makes me wonder if their financial priorities are in order. Is it not hypocritical to write about the importance of fundamental financial knowledge, only to have your own website display such a large gap between the necessities (emergency fund) and extras (travel)? Maybe having an emergency fund doesn’t qualify as a fundamental financial principal and is more of a best practice? No wait, that’s ridiculous! Having some kind of emergency fund should be one of the first things we do as we fight to gain our financial freedom.

So to all you PF bloggers who have skewed priorities I’m challenging you to a blogging duel. Please explain or justify the logic behind your actions. Am I crazy? (don’t answer that)

*p.s. this tif is only towards those whose blogs contain financial advice for their readers, if your blog is not about money or only about your life than this is not directed towards you :)*

Emergency $100 in your wallet….no thank you!

I was given a piece of advice when I was in college… “Always keep a $100 bill in your wallet because you never know when you might need it.” I took the recommendation to heart and decided I would give it a shot.

Let’s just say that bill turned in to ice cream, a hoodie, and dinner out real quick. I didn’t then, and still don’t think, I have the discipline to keep a benjamin on me without being tempted to spend it.

I understand the principal behind having a mini emergency fund on ya at all times, but honestly how often do you find yourself in an emergency that 10,000 pennies is gonna solve (that’s $100 for those that aren’t quick with math)? I am sitting here thinking “When have I been somewhere and there either a) not been an ATM machine within a mile of where I was or b) not been able to use my ATM or credit card?” I can honestly sit here and say I can’t think of one time that either “a” or “b” was not an option. I guess one could wind up low on gas in the middle of Gay Head, MA (no really it’s a real city, check it out here) and find a gas station that doesn’t accept any type of plastic (if cash only gas stations still exist?), but I’m of the mindset “You shouldn’t drive in Gay Head, Mass without cash on you anyways.”

It’s logical to keep cash on you if you plan on visiting a small town that hasn’t caught up with the 21st century, but is it really necessary to keep it in there at all times? I mean it’s not even earning interest in there…RIGHT?…haha. “Keep $100 in your wallet for an emergency” is advice this young lad is gonna have to pass up.

Wells Fargo or Redneck Bank…Do you know which bank is backed by the FDIC??

The answer to this question… BOTH.
I got my blogs first question from a pretty cool dude named Jeremy.

He asks….

I read your post about getting a better rate on my savings account . Makes sense, but how can one verify that the bank is legitimate? I’d rather not just throw money at somewhere I’m not sure of.


PS Wachovia has really been making me angry with their tiny savings rates. Before I started to be so disgusted with them I had quite a bit of money in their bank. Makes me wonder how much money you have to have in there to get some respect.

A valid question for sure, and one I didn’t address is my previous post about online savings accounts. So how can one go about making sure their hard earned cash is safe?

The most important thing to look at, when selecting what bank you want to hold your savings account with, is verification that “bank x” is backed by the FDIC (Federal Deposit Insurance Corporation). Essentially, being backed by the FDIC means if bank x sucks at doing their job and they can’t afford to give you back your money, Uncle Sam will pay you back instead. If you put $10K in the bank and six months later they pull a WaMu, you will get all $10K back from the fed. I can’t stress this enough, being backed my the FDIC is uber important!

Do not sign up with a bank just because they have a phenomenal interest rate – chances are, if their interest is WAAAAY above competitors something fishy is going on -. If you put $10K in a bank that is not backed by the FDIC and that bank fails, then you are, how do we say… SCREWED! You probably will end up losing all of your hard earned money. Most banks advertise on their home page if they are FDIC insured (they know it is a huge selling point). If you have any doubts that the institution your looking in to may not be, you can always go here and verify.
As far as the interest rates go, I feel ya on getting some pretty crappy rates right now. When I opened my Countrywide Online Savings account I was earning a little over 3% on my money, less than a year later I’m earning a dismal 1.6%. I personally don’t chase interest rates. Sure there are banks out there that have better rates than mine, but it is hardly enough for me to go through the hassle of managing yet another account.

For example, say Joe Six Pack puts $20K in to a Countrywide account tomorrow and lets it sit for one year at 1.6%. At the end of the year Mr. Six Pack’s account balance would be $20,320. If you took that same $20K and put it Zions Bank (currently at 2.15% interest) and let it sit for one year, your balance would be $20,430. The Zions account earned you an extra $110 over the course of the year. For some, that extra $110 may be worth chasing, and if so good for them. Personally, I prefer picking a relatively solid performer and sticking with it (unless its rates are SEVERELY lower). I initially signed up with Zions Bank because they offered one of the highest interest rates in the country, but when I found out I had to physically mail in my deposits I quickly said “Peace Out Zions” (I prefer to do everything electronically).

As the title of this posts alludes, Redneck Bank is, as far as my research has shown, legitimately backed by the FDIC and a subsidiary of The Bank of the Witchitas. Although their 3.1% offer is enticing, I’ll stick to my countrywide account for now.

Anyone else have any interesting insight in to the online savings accounts?

Keep on saving!

Heck Yeah, I’m in the press….kinda!

I just found out I¬†had my first appearance in the press!!! I was checking out what web pages have referred people to this site and came across an article on MSN Money. I read through the article and found that Karen Datko, the author, had included a whole paragraph referencing one of my previous articles. The MSN article can be found here and my blog post about that topic can be found here¬†. I feel like I just won an Oscar or something… I would like to thank my mom, my friends, all the fellow bloggers that believed in me, and McDonalds… haha. Thanks again MSN Money!


"A dilemma"….follow up

About two weeks ago I posted about a dilemma I was having. For those unfamiliar, I was unsure of the amount of my disposable income I wanted to allocate to my “future house fund” and how much I wanted to throw at my student loan. That article has been my most read post and by far the most responded to. After mulling it over, running numbers, and deciding what I wanted my goals to be, I have reached a conclusion. I am committing to throw $1,000 each month towards that bad boy. That was the overwhelming recommendation from each reader that responded! I think in my head I was justifying the necessity to hoard my cash and put it all in my savings, when this clearly opposes mathematical reasoning.

Although I still believe personal finance needs to remain personal, I agree the numbers need to be strongly considered. I became focused on the desire to purchase a house (taking on more debt) when I should have been concerting my efforts towards breaking up with Sallie Mae.

This decision couldn’t have come at a better time! With a little over $12K in the bank, my Emergency Fund is fully funded (6 months pay) and allows me the freedom to throw as little or as much money as I’d like at my future house fund, or even better, towards my school loan.

So on this day, April 3rd 2009, I commit to putting a minimum of $1,000 to my school loans each month. Thank you fellow bloggers for whispering wisdom in my ear and opening my eyes… hey its like that Ace of Base Song… “I saw the sign, and it opened up my eyes, I saw the sign!Booya for Ace of Base, Booya for sweet advice from bloggers, and double Booya for paying down debt!

I am punching Sallie Mae in the face!

Would you pay $10MM for a Hanger?

Have you ever heard anyone say “There is no reason to reinvent the wheel.” or”If it’s not broken, don’t fix it”? Well if so go tell that person they owe you $10 million. I did a little google millionaire research and came across Devon Rifkin, a self made millionaire. I’ll give the gist of the article, but if you want the whole story or to look at other millionaires go here

Devon Rifkin,33
The Great American Hanger Company/Hangers.com, Miami
Projected 2007 Sales: $10 million-plus
Description: Manufacturer, wholesaler and retailer of clothes hangers

Frame of Reference: The fact that Devon Rifkin never attended college is just a tiny footnote in his success story. The fact that he has made millions selling hangers is slightly more unique. But for Rifkin, defying the standards means nothing if his business isn’t successful–or if his team isn’t sharing in the success. Says Rifkin, “To me, people have made the biggest difference because they’re the face of the business.”…

Essentially, homeboy was like “I don’t want to work for my dad so I guess I’m gonna make hangers and call my business The Great American Hanger Company. Oh and I’ll make millions doing it to.” That right their is ballerrific (combination of baller and terrific). It’s not like there was a world shortage of hangers and someone desperately needed to step up to the plate and provide, unless I missed something? But seriously, this guy took a simple, ordinary, everyday household item and reinvented the wheel. This got me thinking “What everyday necessity could I reinvent that will lead to my success?” I came up with two ideas….

…if I put “The Great American” before my product it will make me a millionaire right? Seriously though, it’s cool to see an average joe take a normal product and make it something that companies and people want. It should also serve as encouragement and remind us if 33 year old Hanger Guy can do it, so can we. You don’t have to invent something great, you just have to take something and make it better. Get out there and go reinvent the wheel.