Tuesday, September 18, 2012

I'm Alive

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I'm sure a lot of you have been worried about my well-being. I am, in fact, alive and well...and I guess being too. This week is going to be a mental health vacation week. Just to give me time to catch up on things. By next week the health of my ment should be back in order. See why I needed this week off? Until next week, cheers!

Friday, September 14, 2012

Financial Fact Friday #2

Well, it's finally Friday and you know what that means, it's time for the second weekual Financial Fact Friday. Or for those of you that like saying part deux, Financial Fact Friday Part Deux. I found today's financial fact while checking into SaveUp to see if I could get a bonus free play for the day. I'm still winless by the way.

Anyway, now to the fact. Ireland has the highest savings rate by its citizens with 19.3% of income saved. The SaveUp article looks at a comparison by 24/7wallstreet of the top ten countries with the highest savings rate by its citizens. Here's the top ten...


Where does the U.S. fit in? Well, the article didn't specify the ranking, but we save 5.8%. I'm guessing that's quite a ways down the list.

Which country does your savings rate line up with?

Thursday, September 13, 2012

What To Know Before Buying A Small Business

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Strawberry Ice Cream ConePhoto by TheCulinaryGeek
No, seriously, what should I know?

Today I'm going to be meeting with a realtor to get information about the local ice cream shop that is for sale. Why? Because it's an ice cream shop, duh, and who wouldn't want to own an ice cream shop? Well, maybe someone in a town of only 1,000 people. Or maybe someone who already has a full-time job and can't run the day-to-day operation themselves. Or maybe someone who knows nothing about the ice cream business, at least from the selling side. Anyone else beginning to think this might be a bad idea?

To see how bad exactly, I compiled just a few of the questions I thought I should be asking myself.

1. Is now the right time to start a business?
   - Um, sure, why not? Although Mrs. K and I both have full-time jobs that we aren't planning on leaving anytime soon. So probably more towards the not side of things, but is there ever really a right time? Hm, ending a question with a question probably isn't good.

2. Do you know anything about running your own business?
   - No, but I would say that having one would make me very motivated to learn quickly.

3. Who is going to run the business?
   - We're eyeing up a family member as our source of cheap, yet awesome management.

4. Why is the seller selling and do the numbers add up?
   - Hopefully going to find this out later today. I'm guessing that one of these is probably going to answer the other.

5. Who buys ice cream in the winter?
   - Probably only the crazies, but that's why we're already thinking we should expand into the coffee arena.

It appears that I have no business buying a business, see what I did there? However, I can't help but be curious as to what potential is there. Hopefully, after the meeting I will have some real numbers to determine just how unrealistic this purchase would be.

Any thoughts on other questions to ask the realtor? Anyone out there purchased a small business before?

Wednesday, September 12, 2012

Free Money...For A Limited Time Only

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I know I've covered how to use credit cards to make money in the form of cash rewards. Now I'd like to cover how to use credit cards to assist in eliminating credit card debt. Fighting fire with fire, if you will.

The way to do this is with a balance transfer credit card, essentially just a new credit card account to which all existing balances could be transferred. One immediate gain is getting all your debt in to one easily managed place, assuming it fits within the credit limit of that new card. Lately, there have been some even greater benefits to these balance transfer cards like 0% APR for a promotional period and no balance transfer fees.

The Chase Slate is one such card. Right now there is no balance transfer fee for any transfers made within the first 60 days and 0% APR for the first 15 billing cycles which works out to be Novemberish 2013. Meaning you could consolidate your debt into one card and owe no interest for a little over a year. Giving you lots of time to combine the interest savings with other savings to pay off the balance transfer card before the promotional period ends.

Which makes you wonder, why do so many people still have credit card debt at such high interest rates? Well, turns out it's not all ponies and sunshine. To qualify for a balance transfer credit card you need to have a decent credit rating. According to Credit Karma, the average approved credit rating for the Chase Slate is 714 with the lowest approved rating at 674. Also, you have to be careful not to miss a payment. With most balance transfer cards, once you miss a payment you can kiss the 0% APR goodbye. Last, but not least, you should be sure you can pay off the balance by the end of the promotional period. If not, odds are you'll be paying a much higher APR than what you currently have.

Having said all that, I think that a 0% APR with no balance transfer fee is a great way to start getting out of credit card debt. I would transfer whatever debt possible and not put any additional purchases on the card. Then start saving at whatever rate is required to pay off that card by the end of the promotional period. If that means Ramen and no cable, then you eat Ramen and stare at the wall. Easy for me to say. In the end, once you are done with credit card debt, it will all have been worth it.

What has your experience been with balance transfer credit cards?

Tuesday, September 11, 2012

Budgeting And Dieting

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When you think about it there really are a lot of ways that budgeting and dieting are similar. To start with, you can only make so much money in a day just like you can only burn so many calories in a day. Then on the other end you have the amount of money you spend and the amount of calories you consume. There are some items that you have to spend money on, taxes, insurance, the wife and some things you buy just for fun. The same goes with eating, breakfast, lunch, dinner versus Oreos, chips, and ice cream. In the end, eat way more calories than you burn and you get fat, spend more money than you earn and you get poor. Pretty simple stuff.

Back in the day when weight was becoming an issue, the first thing we did (after vowing not to let it happen again) was start tracking our calorie consumption. Thanks to the LoseIt app, we were able to see what areas were having the biggest impact on our...personal inflation (fat finance humor, is anything funnier?). After making some adjustments, we're now leaner and meaner (at least I'm meaner, probably shouldn't say that about the Mrs.). It isn't really dieting anymore, it's just being a frugal eater.

I figure if something so simple was so effective with eating why not try it with spending. Determine what we are "snacking" on that is costing us the most and do a little cutting. Turns out there's this thing called budgeting. Who knew?

Well, we did actually. We tried recording purchases for awhile, but I guess we must spend more than we eat because we always would forget to enter things in.

Now I'm trying a new approach of breaking things down by the month. As you can see by the image above, it's a work in progress. I'm pretty sure that most proper budgets don't have a randomness category. Or at least they don't have a randomness category the same size as the mortgage. Groceries and gas, among other things, are buried in there. Hopefully, I'll have an updated version to share with this divvied up a bit more. Stay tuned!

How does your monthly spending compare? Does any of our spending stand out as being too high? Any categories that I overlooked?