Friday, January 16, 2015

Frugality Sucks and Its Really Hard to Keep To The Plan

As I've posted in recent weeks, I've been trying to find ways to lower expenses and save money in a financial situation where I am not making as much as I have been in the past few years. A couple of nights ago, the weight of my goal hit me squarely in the face when I found myself re-routed due to train construction. 

Fast track was happening on the 6-train and the re-routing would have consisted on taking an express bus from 125th Street to Hunts Point Avenue, just to get off the bus to take the train to my stop to HOPEFULLY catch my bus before it stops running for the night. Yes, it is just as convoluted as it sounds. And time consuming to boot especially since I was working an opening shift the next morning after a closing shift. The other option is to take the express bus that leaves me four blocks from my house. Now here is where I realize what I am trying to accomplish with my frugality and how my life has truly changed since my bar days.

In years past I wouldn't have even given a second thought of catching a cab home from 125th Street, or dropping the $6 bucks for the express bus. Hell, I would have sat at the Live Bait Bar on 23rd Street and had a couple of cocktails while waiting for the scheduled bus to arrive. Instead I stood at the bus stop 20 minutes dreading having to spend 2+ rides worth of Metrocard rides on one ride. That's to the degree that I am trying to maintain a budget. Unfortunately, the unlimited ride Metrocards don't work on the express buses. Now, luckily I got home no later that I would have if the train and bus were working normally. But I guess after a busy shift at work, walking to the express bus from Union Square and walking the four blocks home from the stop on Bruckner Boulevard, I was much more tired than I thought. To the degree that I woke up the next morning feeling like a truck hit me and I felt as if I was hungover at work without having done any drinking. So what keeps me from coming off the rails and spending money in ways I shouldn't? Routine.

I stick to the plan by maintaining a strict routine. I don't carry any of my credit cards to avoid the temptation of sitting in a bar (I'll go into this in a later post), spending money while waiting for the bus or using them to shell out for a cab ride. I don't carry any cash so that I don't spend any money frivolous manner. What I do maintain as a part of the routine is a journal. I have one journal that keeps track of earnings and spending. I have a second one called Building the Best You: A Two-Year Discovery Journal by Caroline Harper. Here is how the journal is described:
How can you become the person you’ve always dreamt of being? Personal transformation begins when you take stock of where you are and what you’re doing right now…and work to change it. And with this two-year self-discovery journal, based on the tenets of Positive Psychology, you’ll not only see results from year-to-year or even month-to-month; an amazing difference is visible day-to-day. All you have to do is answer some basic questions and take five minutes of “focus time” daily to get there. Best of all, charting your entries is an affirmative experience, because you’re responding to queries like “What am I grateful for today?”, “What challenged me?”, and “How can I overcome that challenge?” It highlights the courage, joy, hope, forgiveness, and love that live inside you.
The unique and attractive design places year one and year two questions in two side-by-side columns, so you can easily compare answers, notice patterns, and celebrate how far you’ve come in only 12 months.   
The questions are very repetitive but the idea for me is to create my routine by maintaining my journal and putting what I feel to paper to avoid taking it with me to bed and carrying it over into the next day. My maintaining of a routine journal certainly helps with the budget aspect since I keep both journals together and if I update one, the other one reminds me to update the other. It also helps me realize that this journey isn't easy and many a sacrifice has to be made to reach the level where I want to be both financially and spiritually.

So I take the good days with the bad and keep rolling with the punches. It sucks but so can life sometimes. No? Ok, enough of the complaining. LOL. I go back to my efforts to save money in my next post in the form of using store circulars to save money on items that we need on a daily basis and to try and stock the pantry for a later date.

Until next time,
FH

Sunday, January 11, 2015

Living Within Your Means Part I

In my quest to create financial freedom for myself, I've relied on a series of books for advice and ideas. I previously mentioned that I have been referring to Nancy Dunnan's How to Invest $50-$5000. The Small Investor's Step-by-Step Plan for Low Risk Investing in Today's Economy. Tenth Edition.

I've also been reading two very different books in terms of tone with each other. One is You're Broke Because You Want to Be: How to Stop Getting By and Start Getting Ahead by Larry Winget. Winget's tome is very much in your face from the start with a very honest, tough love kind of financial advice that some might not find comforting in the least. Personally, I find it amusing and quite appreciate the forthright tone of Winget's words. This is a man who reached financial success, lost it and climbed the mountain anew learning and using the lessons of his failure.


The second book Frugal Isn't Cheap: Spend Less, Save More, and Live Better by Clare Levinson. Levinson's book takes a more friendlier tone using personal anecdotes to relay her message that being frugal isn't being cheap. It just means that you are aware of your financial situation and not only respect where you want to be financially but that you care about where you want to be.

Now while both authors have different ways to bring about their message, one of their common threads is living within your means. Now this sounds like a simple concept, but you'd be amazed at how many people fail to live within their means. The over-reliance on credit to pay for virtually everything leads people to live a life way beyond that they can afford. This leads to massive credit debt that takes forever to pay off, leading to big profits to the credit card companies. Now my case is a little different.

Before I was fired from my job at the end of June, I was living within my means. Doing so, I was able to put away a decent little nest egg and was able to live comfortably. My mistake during unemployment was that I didn't "cut the fat" fast enough. What do I mean by that?

I made the assumption that I would find a job soon after my time off to enjoy the summer with the kids. I mean, why wouldn't I. I had 12-years of experience at one bar and a total of 20-years experience in the bar business. Lo and behold, I was in for a big and humbling surprise. Nary any interest in my resume led me to realize that my days in the bar business were over and I had to look in another direction for employment. Now I don't want to harp on ancient history, but what I should have done was cut my expenses from the beginning, instead of doing so when I saw that I would eventually take a considerable pay cut.

I tried to keep life as it was before I was fired and that was my mistake. I couldn't live life as before because I was only getting a fraction of what I was making, first from unemployment and then from my current job. So what I, and many of us need to do is this: LIVE WITHIN OUR MEANS. So what does that exactly mean.

I'll put it this way. If what you pay out in bills and expenses in a month is less that your income then you are living within your means. If you borrow from Peter to pay Paul on a monthly basis to help pay off what you spend in a month then you aren't. Now in my experience, its a matter of looking at your expenses and finding out what isn't needed and "cutting the fat away."  One of the things that Larry Winget suggests is taking an account of what you spend in the form of a budget sheet. Here is the sheet he has listed in both his book and on his website (You can download it in PDF format):


If what you make is less than what your number is on the Total Debts and Expenses line then you need to lower your expenses.

Two recent examples of expenses that I lowered was my Cable and Netflix. My cable consists of cable, internet and phone and I was paying close to 220.00 a month. This is an obscene account. If it was up to me it would all go with the exception of the internet and the phone. Since my wife and I both work similar daytime schedules, the kids come home alone after school. Since they don't have cell phones (no need to additional expenses), the house phone is our link to the kids. I was able to lower the cable bill by almost $60 dollars by lowering my plan from the Gold plan to the Value plan. Now this eliminates all our premium channels and other channels.

In terms of Netflix, I've always had the movie rental plan. When Blu-Ray movies became available I upgraded the plan. At most I used the 5-movie at a time plan which caused me to pay almost $50 a month. Now I could afford that plan because we really don't go out to the movies. That in itself is a BIG expense, especially if you have kids. Since July, I downgraded from the 5-movie plan to the 3-movie plan to the Streaming only plan. I went from paying close to $50 a month to less than $7.99 a month. As per the post A Quick Update On Our Streaming Plans And Prices from Netflix blog page dated May 9, 2014:
To continue adding more movies and TV shows, we are increasing the price of our $7.99 a month streaming plan by one dollar to $8.99 for new members. Current Netflix members get to keep their current price for two years, enjoying HD-quality movies and TV shows on any two screens at the same time.
With the channels we do have, plus Netflix and Hulu there is enough to watch. I should see a savings of close to $80 a month with the reduction in Cable and Netflix services. If I could find these layers of expenses to cut, I'm sure you can to. You just have to evaluate what you need and what you don't.

I'll continue to revisit my attempts to live within my means in future posts. Feel free and comment to let me know what tips and tricks you have utilized to live within your means. I'd appreciate hearing what you've done.

Until next time,
FH

For Further Reading:
- Larry Winget's official website
- Clare Levinson's official website
- Nancy Dunnan's column Dunnan on Dollars from the Online Investor website

Monday, January 5, 2015

Bagging Your Lunch To Save Money

I originally wrote this post in November but decided to hold it over until the New Year. Maybe those of you who are feeling "New Year's Resolution Fever" will take heed of the message that I am putting out in this post. I'm sure food is expensive in most major urban centers but eating in New York City is expensive, especially if you work on the island of Manhattan (yes folks, NYC is more than just Manhattan).

Now I guess you can eat off the value menu of places such as McDonalds and Wendy's or have street meat on a daily basis. But why would you do that to yourself and your stomach. Even pizza, which used to be an economical way to have something to eat has gotten ridiculously overpriced. So I calculated the amounts that I would have spent on lunch and decided that it was easier and cheaper to just bag my lunch.

The calculations are based on estimates on what I used to spend on lunch/dinner when I bartended. We would order wings from a local wing spot and between the wings, tax and tip, we'd drop $20 each for the bill. That was roughly the same when ordering from the diner or any other take out spot. Spending that much on just food adds up. Not to mention that we would spend extra getting something from the local deli whenever someone did a run to the store. I am not in the position to spend that kind of money on a daily basis and I'd rather utilize those funds to buy food that I can make at home at a considerable savings AND make to satisfy more than just one meal. So for the purpose of this exercise, I'm dealing with round numbers so your estimates might be less than mine.

So let's say you work a five-day week and let's say your daily expenditure for lunch rounds out to $10 a day. Multiply that by 5 and you spend $50 a week on lunch. Multiply that same $50 by 52 weeks and you find that you spend $2600 a year on lunch.
  • $10 x 5 days = $50
  • $50 x 52 weeks = $2600
That's a pretty hefty amount and I'm not even taking into account the money that is spent on your morning coffee, donut, roll and danish.

Now who are you kidding, we busy New Yorkers don't have time to have breakfast at home. Many New Yorkers are so busy that they would rather spend the money to buy their breakfast on the street rather than waking up early and having breakfast at home. Again, as with the lunch estimate, I round out the amount to $5 a day though if you use a street cart it might be cheaper and if you go to Dunkin Donuts, Tim Horton's or Starbucks it might be more expensive.

Based on a five-day work week multiple it by $5 dollars for a total of $25 a week. Multiply the $25 by 52 weeks and that's a total of $1300 a year for breakfast.
  • $5 x 5 days = $25
  • $25 x 52 weeks = $1300
So here is what we are looking at so far:
  • $2600 Estimated Lunch a Year 
  • $1300 Estimated Breakfast a Year 
  • $3900 Estimated Expenditures on Lunch and Breakfast a Year 
So we are looking at an estimated total of $3900 in meals a year and that doesn't include the afternoon coffee you sneak out to buy, the candy bar or bag of chips at the office vending machine, the fruit you buy from the street fruit vendor and so on. Multiply that by two if your spouse or partner spent the same estimated amount and you are look at close to $8000 spent on what you and your spouse spend to eat during the day while at work. I don't know about you but that is a little over five months worth of rent for me. That kind of money can be better served in other areas. So bagging lunch it is. Now am I saying that you shouldn't treat yourself? Absolutely not.

You work hard so you should treat yourself occasionally. Just do it in moderation so you can save some of that hard earned money. If you have to buy coffee while out on the streets, look into ways that you can save money to do so. Some small coffee shops have rewards programs such as if you buy a certain amount of cups, you get a free cup of coffee. Dunkin Donuts for the holidays sells a Holiday gift card (like the one shown to the right) which for $15 you would get 10-large sized cups of coffee. Normally a large cup of coffee would cost you roughly $2.50 so for 10-large sized ups you would save $10. The card doesn't expire and they cards are still being sold. This is something that would work perfectly in terms of both budget and satisfying the craving for a cup of joe.

Another option is to do what I do: Bring your own coffee to work. Luckily for me, my darling wife Momma-San listens to me and heard that I wanted to buy a Thermos to bring my coffee to work. So for Christmas, I found a Thermos sitting under the tree. Now, if you are thinking that I got an old school tan colored Thermos with the plastic lid that doubles as a cup you are mistaken.

What I got was a sleek looking container that according to the product description for the Thermos® Stainless King™ 24-Ounce Beverage Bottle from the Bed Bath and Beyond website:
It features TherMax® double-wall vacuum insulation for maximum temperature retention that keeps cold beverages cold for up to 24 hours and hot liquids hot for up to 18 hours...Holds a generous 24 ounces
If 24-ounces isn't enough, they sell a 40-ounce Thermos: the Thermos® Stainless King™ 40-Ounce Beverage Bottle, which is the same price as the 24-ounce Thermos.

This Thermos has already paid for itself. I take roughly 20-ounces of coffee with me everyday to work. It stays hot during my entire shift and now I don't need to purchase coffee during the day or even after work AND I'm not tempted to buy a donut or two which helps keep my big gut in check.

I'm currently trying to see how many days of coffee I'm getting out of a 12oz bag of ground Dunkin Donuts medium roast coffee. I just bought four bags at CVS at $5.99 a bag using their Rewards Card. I'll go into using those cards in a later post.

Basically the only daily expenditure I have is my transportation. Its gotten to the point that I don't even carry cash with me. Not carrying cash takes away the temptation of spending money. And since I hate swiping my debit card for small amounts I don't have to worry about using that either.

Times are tough. We all need to find ways to save some money. I hope this helps.

Until next time,
FH

Saturday, January 3, 2015

Update on the 60-Week Challenge

Happy New Year to you all. Just wanted to give you all a brief update my progress on the 60-Week challenge. As I described in my last post, I am adjusting the 52-week savings challenge for 60-weeks taking advantage of the seven weeks that I was working before the new year plus one week in advance. Why one week? I figure that there will be a week where I won't be able to put into the pot so I would be ahead of the game if I did hit that point.

So far I am 12.5% into the challenge. Now I am doing one challenge at intervals of a dollar and one challenge at an interval of a quarter. So far in week 8 for the dollar challenge, I am at $36 dollars saved. For the quarter challenge I have $9 dollars saved. Now I know the amounts don't seem like much, but the savings start slow and accumulate during the year. The big challenge for me is trying to stay on mark during the weeks where the amounts to be deposited go into the double digits. Hopefully my budgeting will free up enough money that I can continue with the challenge. I guess I'll worry about that when I get to it. For now, here is how the coffee cans look like:


For my next post, I look at ways that we can save money from the perspective as New Yorkers who work in the big city by looking at the amounts of money that we spend on breakfast and lunch. Also, let me know how you are doing with your money challenge. Any suggestions and ideas?

Until next time,
FH

Sunday, November 23, 2014

The 60-Week Challenge

I recently post to my Instagram a chart for the 52-week challenge. Now if you haven't seen it before, the 52-week challenge is a way to put money away every week, in increments until you reach the end of the year. The goal is to take $1 dollar in week one and put it away. $2 dollars in week two, $3 in week three and so forth. By the chart on the right, you should reach the desired goal of $1,378 at the end of the next calendar year.

In my case, I'm doing a 60-week challenge. Why? I don't want to wait until January to start my savings program. The final amount for the 60-week challenge will be $1,830. Here's a word of warning. Keep in mind that as you progress in the weekly interval, you will be taking out amounts in the $40, and $50 dollar range from your check on a weekly basis. That might be something that is very prohibitive depending on your expenses. Another way to do the 52-week challenge is to do so in reverse. Carrie Rocha in her article Don’t Do the 52-Week Money Challenge (At Least Not Their Way) from the Pocket Your Dollars website dated January 8, 2014 describes how you can do it in reverse by taking out the bigger amounts in the beginning when you are motivated and have the smaller amounts taken out in December when you're main expenditures for Christmas happens.

In the end, do what works for you. I'm starting now because I am not guaranteed a job after Christmas season. I was hired as a seasonal worker and I am trying to stay on permanently. So starting now helps me get a start for when I get hired on a permanent basis (hopefully). I'm doing a smaller one as well, starting with 25¢ and going up from there at 25¢ intervals. They key isn't the amount, its the dedication to stay on the path to savings. Just find what works for you. Here are a few more examples of savings plans.


If you rather do your own plan, print out this chart to keep track:


There's no right or worse way to do this plan. Just find what works for you and ride it out until the end. I'll post on how I'm doing in the near future. Let me know what you think.

Until next time,
FH

Wednesday, November 19, 2014

No More $20 Dollar Cocktails For Me

I have to admit that I never thought that I would be where I am at the age of 42. Now I never particularly planned specific end goals for the age of 42. But I never thought that I would have been without a job and surviving on unemployment benefits and a dwindling nest-egg when I turned 42.

It really is a humbling situation to be in. Even more so, since working in the bar business offered me the opportunity to make good money, albeit off the illness and addictive habits of many a customer. That in itself formed a type of moral issue for me. But I digress.

Fast forward about a month and a half and I'm employed in the retail sector. Why? Because the bar business well dried up. In almost four months I had three interviews for a person with almost 20 years in the bar business. 3!!!!! When I interviewed for the Olive Garden and I couldn't get a second interview or a call back of any type, I knew at that point it was clear as day that I was done in the bar business. You know what? It was a good thing.

I was downright miserable. I really dreaded going to work to deal with the constant bullshit that came from both within and without. If you've never worked in the service industry, you really wouldn't understand. A five night work week in the bar feels like a seven day or more work week at a day job. Trust me, I've been on both sides of the workforce. Not to mention, you see people at their worse and they treat you like you're shit. As if you're job in dealing with their drunk and belligerent asses isn't a "Real Job." Don't let me get started on the internal issues.

So you may ask "Why do it". Plain and simple" The money is good. Back to working the proverbial 9-5 40-hour work week as a daywalker, I can tell you that on a bad night, I could make almost the entire amount that I would now make in a week. Talk about sobering. But again, it was a good thing that I was knocked back down to square one. I probably would be miserable and working at the bar. It took getting kicked in the balls and going through my savings to realize that it was a blessing in disguise. I might be cash-strapped but I have my peace of mind. The money issues have created another stress but it has allowed me to refocus and re-learn the idea of living a simpler existence. In trying to cut the fat from my expenses, it has allowed me to better manage the little funds I have available. I can no longer live by the idea of "I'll have a kick ass night that will cover the bills and what not." As I mentioned to my sister the other day: No More $20 Dollar Cocktails For Me.

So where do I stand. I'm back at square one after taking my lumps and ready to dish out some punishment and take my next steps. I'm going to try and rebuild my savings and then some. The original amount that I had saved and subsequently went through is irrelevant but I will attempt to use tried and true methods of saving money and share my successes and failures here through periodic posts.

The first recommendation that I have is that if you can, pick up this book: How to Invest $50-$5,000: The Small Investor's Step-By-Step Plan for Low-Risk, High-Value Investing by Nancy Dunnan. Now in its 10th edition, the book is a great resource in educating people on what resources are available out there for investment written in plain English. It won't make you rich with a turn of the page, but it will allow you to learn the foundations of investing and give you ideas on what services might be ideal for you. I'm sure you can find it in the public library if you don't want to buy it. That's how I got a hold of it. Let me know what you think.

Until next time.
FH

Friday, February 7, 2014

Yet Again Another African Email Scam

It's been a while since I've posted anything here and decided to do so with one of my favorite kinds of scam emails. I find it amazing that people actually fall for some of these. The thought of having millions deposited to your account at a time of desperation must be hard to dispel. Though for this one I have to admit that the person writing it is actually doing some research though their lack of grammar is a dead give away. The insertion of the link to the CNN article from 2008 about plane crash that took the lives of four people including a member of the Cabinet of the President of Kenya and his assistant is a nice touch in an attempt to lend some credibility to the scam. Here is the text of the email I received:
Dear,

My name is Cynthia Kipkalya Kones,
I am writing this mail to you with tears and sorrow from my heart. With due respect,trust and umanity, i appeal to you to exercise a little patience and read through my letter, I wish to contact you personally for a long term business relationship and investment assistance in your Country so i feel quite safe dealing with you in this important business having gone through your remarkable profile, honestly i am writing this email to you with pains, tears and sorrow from my heart, i will really like to have a good relationship with you and i have a special reason why i decided to contact you, i decided to contact you due to the urgency of my situation, My name is Miss.Cynthia Kipkalya Kones, 21yrs old female and I held from Kenya in East Africa. My father was the former Kenyan road Minister. He and Assistant Minister of Home Affairs Lorna Laboso had been on board the Cessna 210, which was headed to Kericho and crashed in a remote area called Kajong'a, in western Kenya. The plane crashed on the Tuesday 10th June 2008.

You can read more about the crash through the below site: http://edition.cnn.com/2008/WORLD/africa/06/10/kenya.crash/index.html

After the burial of my father, my stepmother and uncle conspired and sold my father's property to an Italian Expert rate which they shared the money among themselves and live nothing for me. I am constrained to contact you because of the abuse I am receiving from my wicked stepmother and uncle. They planned to take away all my late father's treasury and properties from me since the unexpected death of my beloved Father. Meanwhile i wanted to escape to the USA but they hide away my international passport and other valuable travelling documents. Luckily they did not discover where i kept my fathers File which contains important documents. So I decided to run to the refugee camp where i am presently seeking asylum under the United Nations High Commission for the Refugee here in Ouagadougou, Republic of Burkina Faso.

One faithful morning, I opened my father's briefcase and found out the documents which he has deposited huge amount of money in bank in Burkina Faso with my name as the next of kin. I travelled to Burkina Faso to withdraw the money for a better life so that I can take care of myself and start a new life, on my arrival, the Bank Director whom I met in person told me that my father's instruction/will to the bank is that the money would only be release to me when I am married or present a trustee who will help me and invest the money overseas. I am in search of an honest and reliable person who will help me and stand as my trustee so that I will present him to the Bank for transfer of the money to his bank account overseas. I have chosen to contact you after my prayers and I believe that you will not betray my trust. But rather take me as your own sister.

Although, you may wonder why I am so soon revealing myself to you without knowing you, well I will say that my mind convince me that you may be the true person to help me. More so, my father of blessed memory deposited the sum of ($8,500.000.00 USD) Dollars in Bank with my name as the next of kin. However, I shall forward you with the necessary documents on confirmation of your acceptance to assist me for the transfer and statement of the fund in your country. As you will help me in an investment, and i will like to complete my studies, as i was in my 1year in the university when my beloved father died. It is my intention to compensate you with 30% of the total money for your services and the balance shall be my capital in your establishment. As soon as I receive your positive response showing your interest I will put things into action immediately. In the light of the above. I shall appreciate an urgent message on (cKipkalya@yahoo.fr) indicating your ability and willingness to handle this transaction sincerely.

AWAITING YOUR URGENT AND POSITIVE RESPONSE, Please do keep this only to your self for now un till the bank will transfer the fund. I beg you not to disclose it till i come over because I am afraid of my wicked stepmother who has threatened to kill me and have the money alone. I thank God Today that am out from my country (KENYA) but now In (Burkina Faso) where my father deposited the money with my name as the next of Kin. I have the documents for the claim. Please contact me here (cKipkalya@yahoo.fr)

Yours Sincerely,
Miss.Cynthia Kipkalya Kones
cKipkalya@yahoo.fr
Alas my dear Cynthia, I cannot help you. I'm sure you'll find another patsy, umm, knight in shining armor that will ride on in on his trusty steed to help save the day for you. Au revoir.

On a side note, here is another little nugget I just received:
Hi Friend I am a banker in UBA BANK .I want to transfer an abandoned sum of 10.5 USD to your account.50% will be for you. No risk involved. Contact me for more details. Kindly reply me back to my alternative email address ( kasimmohamed712@yahoo.com )    Dr Kasim Mohamed.
Really now. To quote Ed Lover: Come on Son.

FH