Search Results for: budget

Are You a Financial Olympian?

August 8, 2012 By Shane Ede 9 Comments

What is a Financial Olympian? It might first help if we briefly look at what it means to be an Olympian in the more popular sense. Unless you’ve been under a rock these last few weeks, you can’t help but have heard about the Olympic games going on in London right now. Athletes from all over the world have converged on London to compete against one another in their sport. Getting so far as the Olympic games requires a few things. You’ve got to have some talent, sure, but all the talent in the world won’t get you there by itself. You’ve got to have dedication, perseverance, and a no-quit attitude.

Financial Olympic Events — img credit: Accounting by 401(k) 2012 on Flickr

Being an Financial Olympian isn’t much different. Once again, talent only plays a very small part. You don’t need to know numbers inside and out, but merely how to add, subtract, and maybe multiply and divide. O.K., that might be an oversimplification, but you really can get away with just those skills, so long as you add in the others to top it off.

Financial Dedication

Like an Olympic athlete, a Financial Olympian must be dedicated to the performing at their peak ability. Neither takes a day off. Neither takes it easy. Each pushes themselves to be the best at their event as they possibly can be. It’s their dedication that gets them up in the morning to train, and it’s the Financial Olympian’s dedication that gets them to the table to do their budget, pay their bills, and to manage their money as best as they can.

Financial Perseverance

When an Olympic athlete fails, do you know what they do? They redouble their efforts, get up a bit earlier the next day, and train harder and longer than they have before. They are driven to continually improve their performance so that they don’t fail again. When a Financial Olympian fails, they do the same. They work harder at maintaining their finances. They get up a bit earlier, find new ways to increase their income through second jobs, better jobs, better positions, and even passive income sources, and they work hard to improve their knowledge of personal finance.

Financial No-Quit Attitude

If you want to be an Olympian, whether it be in the 100m Freestyle or in the realm of number-crunching personal finance, quitting is never an option. Any Olympian will fail. Just in the last week, I’ve seen Michael Phelps, the Olympian with the most medals in the history of the Olympics, lose several times. Does he quit and leave the next race to the other Olympians? Not a chance. He has a no-quit attitude. A Financial Olympian does too! If you break your budget or save less then you intended, you don’t throw your hands up and go on a spending spree. No, you figure out why you failed, you pull out a little of that dedication, add a bit of perseverance, and move on to the next month’s budget!

Are you a Financial Olympian? Do you have the dedication, perseverance, and no-quit attitude to make your personal finances the best they can be?

Spend Less with this Unique Money Advice

August 2, 2012 By Shane Ede 3 Comments

To save money, people usually get the ball rolling by creating budgets. It’s true that a budget is an indispensable part of being fiscally responsible, but it’s generally not enough. To spend less and save a lot more, it’s important to implement as many money-saving techniques into day-to-day life as possible. The good news is that those techniques are typically quite simple. A selection of especially unique tips for saving cash is highlighted below.

Unique Ways to Save Money

Pay Bills Online – Between online bank accounts and bill pay services, there’s no reason to mail a check again. Many major companies accept payments through their websites. That’s especially true about credit card companies. Even if a company doesn’t accept online payments through its website, most banks offer online bill paying services that can be used to sidestep the problem. Postage isn’t necessarily expensive, but it can add up over time. It’s also easier to pay bills on time through the Internet because the check doesn’t have to arrive in the mail.
Get Rid of the Land Line – It’s wasteful to pay for a cell phone and a land line. The majority of people have cell phones and smartphones these days, and most of them can do without traditional land lines. Even if a monthly land line bill is low, it’s still money that can be set aside for something else.
img credit: deborahdegolyer on Flickr
Stop Using Kitty Litter – Pet lovers can save huge amounts of money by potty training their cats. It sounds silly, but this trend is rapidly growing in popularity, and it’s a legitimate way to spend less on pet expenses. There are even products out there that make it easy to teach cats how to use regular toilets. The average cost to supply litter to one cat for one year is $100, so it’s possible to save a lot of cash by putting this tip to use.
Be Strict about Grocery Shopping – In addition to creating a strict grocery list and sticking to it, shoppers should give themselves specific time limits as well. When the clock is ticking, a shopper is less likely to dawdle around and be tempted to make random purchases. One good option is to set an alarm on a cell phone and to be in line by the time it rings. We go grocery shopping directly after Church while our oldest child is in Sunday school. It gives us exactly 45 minutes to get all the shopping done and get back to pick him up.
Paint the Roof – Buying a new roof is a major expense, but painting one isn’t so costly. By painting a roof white, it’s possible to slash energy bills. Air conditioning results in extremely high electricity bills. White paint deflects the rays of the sun, which keeps a home much cooler. In turn, summer energy bills tend to be a lot lower.
Periodically Shop for New Vehicle Insurance – Instead of assuming that their vehicle insurance rates are fine, people should get into the habit of shopping around regularly for vehicle insurance. Rates often drop, but auto insurance companies don’t always pass those savings on to their customers voluntarily. It only takes a few minutes to get free online quotes for car insurance.
Turn Trash into Treasure – Garage sales are fine, but it’s possible to make even more money on used items by selling them online. Posting items for sale on auction sites like eBay is easy. They are exposed to a much larger audience, so it’s often possible to rake in a surprising amount of money. In some cases, this can even turn into a nice way to earn extra money on the side.
Get Discount Haircuts and Dental Work – While they are in training, fledgling dentists and hair stylists often provide their services for free or for drastically reduced prices. This is an excellent way to spend less on cleanings, haircuts and many other services.

To stay motivated about these unique money-saving tips, keep a running list of the amount that is saved every month. Then put that money towards your debt snowball, or split it between debt and a vacation fund! Most people are pleasantly surprised by how much less they spend after implementing just a few of these simple, offbeat techniques. Over the course of a year, these unusual tips can produce some truly incredible savings.

Why I Like Passive Income

July 11, 2012 By Shane Ede

When you’re in debt, and trying to escape from the cycle of debt, the one thing that seems to dominate your every thought is paying off that debt. Far too often, those of us who talk about debt and finances regularly tend to focus on debt as well. We focus on paying off debt, eliminating debt, and ways to spend less money so you free up more money in your budget to pay off that debt. What we don’t talk about often enough, in my opinon, is making more money. In many ways, increasing your income is just as important to your fight against debt as staying disciplined in paying your debt off.

I don’t know about you, but I often feel like my income is capped. In any job, you are either paid a yearly salary, or paid an hourly wage. In that way, you’re income is capped. If you’re paid on a salary, it doesn’t matter how much you work, you only get paid a certain amount every pay period. If you work hourly, there are only so many hours that you can work in any pay period. There are always ways to advance yourself through the workforce, and up the ladder at work, but your income is still capped.

Uncapped income.

Passive Income Cash Machine — img credit: Whatleydude on Flickr

One way to increase your income, that doesn’t require that you work all hours, and that doesn’t cap your income is through passive income. I’ve talked about it before here, and here, and here. The ideal definition of passive income is income you earn without putting in any work. And, maybe in an ideal world, that type of income would actually exist. In our less than ideal world, truly passive income is very hard to find.

How I define passive income

I like to define passive income in somewhat more liberal terms. To me, any income that I can earn with a minimal amount of work is passive income. If I can make income off of something that only takes me 30 minutes a month, I consider it passive income. Anything that continues to make me money long after I’ve put the work in counts too. It’s like Ronco income. “Just set it and forget it!”

For me, my blogs and websites are passive income. A majority of the income I make off of them is income from posts I’ve already written. The work has already been put in, and it would continue to pay me even if I quit writing. My traditional stock portfolio is a passive income. I did the work early on, earning the cash to buy the stocks, as well as doing the research to pick the stocks, and many of them pay me dividends on a regular basis. That dividend payment is a passive stream of income. Yet another stream that I take advantage of is my Lending Club portfolio of peer-to-peer loans. (See my latest report on LC)

Other forms of passive income can include things like royalties, patents, and rental properties. I’m sure if you think hard enough about it, you’ll find several other streams of potential income that would fit my definition of passivity. (Share them in the comments!)

Why do I like passive income?

Naturally, I like passive income because I’m lazy. 😉 After all, what could be lazier than earning money while you sit on your behind and watch soap operas on T.V.?

“Naturally, I like passive income because I’m lazy.” — @beatingbroke (Click to Tweet)

As much as I like that reason, the real reason is a bit more explanatory. I like paying off my debt. I like the ability to do that while still enjoying life. And, as many of you can attest, doing both of those things can sometimes be somewhat difficult. Balancing the expenditures that can come enjoying life (even a frugal one) with paying off your debt is troublesome. The best way that I’ve found to try and do both is to work hard at paying off debt, while working hard at increasing income at the same time. Without passive income, the only way to increase income is to work more hours at your hourly job or to negotiate regular raises at your salary job. Recently, it’s become even more difficult to do either of those. Passive income becomes the last, best way to increase your income with little to no continuing work output.

Why do you like passive income? What do you consider to be passive income? What are some of your passive income streams? What are some that you’d like to take advantage of?