Saving and Going Green: My Office is Moving

I spent most of today working on packing and tearing down shelves in my office at work. We are moving from a warehouse-style building to a high rise in downtown Atlanta. By doing so we are getting a much nicer office space, a lot of food options in the building, a better neighborhood, and best of all I can take mass transit to and from work!

This will prove to save a lot of money for me since the company will pay for my transit card. Not only will I have unlimited access to the MARTA system but I will also not be spending $4 per gallon on gas for my car (plus wear and tear). I also don't have to worry about paying for parking downtown. This will add at least another $100 per month to my budget. I look forward to banking that money!

It is going to be a lot of work to get us moved in 3 weeks and still operate a company. It is well worth it since the train station is IN our building! It will take me roughly 15-20 minutes by train to get to work and I get to play on my iPhone while I wait. I am excited! An added bonus is that is helps the environment a little too.

More Work Travel!

We just got more projects in. Looks like I will be going to Maine again and finally a fun place: The Florida panhandle. We have a new client there and I will be in the area for at least a couple of days to get them up and running.

I am glad travel is starting to pick up again. It keeps life a little more interesting and the miles never hurt!

So far my travel dates look like May and June but nothing set in stone yet.

Ramping up savings: A change in direction!

I am finally to the point now where at the end of the month I have decide which goal to add my leftover money too. I call this a good "problem". This will soon increase a little since my company is moving to an office where I can use mass transit and get it reimbursed. Not only will I get a free metro pass but I will also be down to driving 1 mile (total) per work day.

With gas prices approaching $4 per gallon in the Atlanta area (I filled up today for $38.00 for 10 gallons!) I really like this idea. That doesn't even factor in the wear and tear, tires, brakes, oil changes, etc. that will all be delayed due to less driving. I also like being able to get things done on the train in.

My office will be moving next month. That means a lot of work in the meantime but well worth it in the long run. We will be in a large building with a mall in the basement with lots of great lunch options and in downtown Atlanta with plenty of nice places around us too. I will have a view of the city from my office. All pluses!

For my budget this should free up around $100 per month. That means I will have that much to add to savings month-to-month barring any extra spending or minor expenses that can pop up. I am considering getting more aggressive with my emergency fund to hit the magic $10,000 mark then switch to Roth IRA funding and a couple of other smaller goals. If all goes well I should have a raise in July too!

I finally feel as if I am starting to gain ground on getting to the life I want. I am able to travel a little bit more thanks to airline miles, great deals online, and more free cash flow. I am coming out of the rut of debt and stress and moving towards a little more freedom. It is very refreshing and I want more!

Why Emergency Funds Work: My Car Repair

I have been having some minor car trouble with it running a little hot. It wasn't as much of an issue over the winter with colder weather. Spring is now here and I am noticing the problem more and more. Now is the time to take care of it before more major issues come.

Today I did some shopping around. I need a new readiator (it leaks coolant). I found one online from an auto parts chain that had the part in stock locally and I got and extra 15% off with the online coupon. Now I just have to pick it up and take it over to my mechanic friend to have it installed.

I am not in any financial panic as I have money in my emergency fund earmarked for car repairs. The parts and accessories I need for the job were about $140 total. This comes out of my emergency fund and my normal monthly deposits to the emergency fund will replenish it over time. Luckily for me my friend accepts beer as payment for labor.

Without that money set aside I would be in a bit of a bind. Maybe I would have eaten a lot cheaper and stayed in more to make up for the cost. It could also have gone on a credit card where I would pay interested until it was paid off. Fortunately this is not the case as I planned ahead.

Thanks to the emergency fund a potential financial panic was curbed. Stories like this happen all the time. Be ready!

April 2011 Prosper Lending Update

It is the middle of the month again and it is time for my update on prosper.com lending. It has been another quiet month with business as usual. I have 1 slightly late, 1 very late loan and 6 more have paid off completely.

I have decided to completely abandon Prosper. They have gone to a fixed rate system and that does not appeal to me at all. My ability to earn extra interest (arbitrage) has been eliminated. I will continue reporting on my experience until I have emptied the account.

I "write off" all loans in collections as a loss.

Here are my stats as of today:

Outstanding Loans:

Late: 1 (< 30 days)
In Collections: 1 (written off)
Current: 25

Closed Loans:

Charged Off: 10
Paid Off: 31

Open Bids: 0

Total currently invested: $502.52 (Principal Value)
Cash in Account: $33.63

Total Principal: $536.15

Frugal Tip: Cell Phone Data Plans

More and more people are getting "smart" phones these days. I personally have the iPhone. I have lots of friends who have Androids and iPhones too. The internet data plans that these types of phones require can be pricey. They don't have to be if you apply some of my tips!

First track your usage. Look at 6 or so months of data usage and come up with an average. For me I use less than 200MB in a given month. AT&T has a 200MB monthly plan. This works for me and is the cheapest option! I switched over to this plan and save $15 per month! I have since never gone over the limit.

Second get a free WiFi locator app. Most smart phones work with WiFi. My office has WiFi. I have WiFi at home. A lot of places I frequent also have it. By putting my phone on the WiFi I am off the data plan. It is also faster and uses less battery! If I am in an unfamiliar place I fire up the app and see if there is free WiFi around.

Lastly I turn my data off on my phone unless I need to use it. It only takes a few seconds to switch back on. A bonus is my battery lasts a lot longer by having it off. Setting your email accounts to manually check instead of on a set schedule cut my data usage in half. I am on WiFi most of the time anyway so no need to have both running at once.

I find that the majority of the users don't need the bigger data plans. The reason most people have the bigger plan is due to laziness. They don't want to have to "worry" about how much data they use so they just pay through the nose. Jumping on WiFi is an easy habit to form. We all do it for our laptops so why not do it for your phone too. Save some money while you are at it!

Using a Home Loan for College is a BAD idea!

I see a lot of advertisements from banks that encourage people to use a second home loan or HELOC (Home Equity Line of Credit) to pay for their children's tuition. To me this is a bit predatory and is a financially bad idea. I see many problems with this:

• You are borrowing against your home to finance a piece of paper
• You are responsible for the payments--not the child
• You jeopardize your savings and retirement
• HELOC's have a variable rate
• The interest is usually higher than a student loan

To borrow against your house to pay for education is a bad move. If the child does not complete college then it is wasted money you are stuck paying. If you suddenly can't afford to pay you could eventually lose your home.  At the very least you could wreck your credit for a few years by being late.

Secondly you are stuck with the payments. Regardless of what the child does in life you have to pay for it. Doing this means that you also have less money to save towards retirement and other goals since you have that extra payment each month. This is even worse with a variable interest rate that will eventually rise over time.

The bottom line: DON'T DO IT! 

I can completely understand that parents want to help pay for the child's college education. There is nothing wrong with that. By doing so you need to be smart about it. It is more than just money. Legal liabilities, consequences of it going wrong, and relationship with the child have to be considered when making this decision.

My solution: Use student loans in the child's name.

Who says you can't make payments on those loans instead? You can also make an agreement that you will pay the loans only if he/she completes their degree. If they drop out the foot the bill (or whatever other arrangement you want to make).

Advantages of using student loans:

• Once graduated they can consolidate to one payment and a fixed interest rate
• They get a tax write off for the interest on the loan
• They can be deferred during financial hardship
• If they pass away the student loans are forgiven (the home loan is not!)
• No payments are needed during school. You can save more for retirement during those years.
• The child gets a good credit from the loans.
• You only borrow what you need. Amounts available fluctuate with tuition costs. Home loans fluctuate with home values (and can be a problem!)

This need not only apply to children. You can do the exact same thing for yourself too. Making the smart financial choice makes life easier in the long run. I have student loans myself and don't regret it. They allow me to make a lot more money than I would otherwise and have a very low fixed interest rate. Make the savvy choice!

Everyday I am working toward living a different life

I live my life largely "against the grain." I do things a lot differently than most people, I take different risks, and have very different goals. I am making slow, gradual changes in my habits, spending, and even my own thought processes to stay the course. In short I am hell-bent on getting what I want.

What do I want?: I want to stop working and travel, volunteer, and be free.

In order for this to happen I have to achieve quite a few goals that are going to take a long time. I have to remain focused and not sway off course with all the curve-balls that life loves to throw at us. I have to be stubborn almost to the point of tunnel vision to get there. Most of the time I am doing this and sometimes I falter. It's just part of being human. We make mistakes. All the time.

As it stands today what do I need in order to meet this goal?

• 100% Debt free. I need to have $0 monthly loan payments of any kind. I have come a long way here by getting down to my very low interest student loan and mortgage.
• I need passive income. I estimate that I need enough income to cover at least 75-80% of my financial needs each year. Today I estimate I am under 5%. 
• With the above two achieved I have freedom. I don't have to work full time (or even at all for a good stint) in order to live. I am free to roam the globe, work on projects, and do as I please for the majority of the time. I will probably still have money-making projects but they won't be as vital. 
• I need to button down more. I admit that I am spending more than I should on certain things such as going out, food, and a couple others. I am slowly paring this down so I don't feel like I cut cold turkey and then feel trapped. I need to pair this with increasing my income and savings rates. This is the most important. If I can nail this the other requirements of this goal will fall into place!

This is my roadmap that I follow each day. I constantly remind myself that every dollar I save instead of spend I get $1 closer to being truly free. All of those baby steps add up to big steps and big gains for the future me where I can do as I please most of the time. I now have this top priority goal and nothing nor no one will get in my way. You only get one life!

Back on the road: A few little travel tips!

I am in the Baltimore/DC area today and tomorrow for work. I flew up this morning and will be meeting with a client tomorrow before heading back home tomorrow night. Luckily this is work travel so I get to earn miles, per diem, hotel points, and other little benefits. It is also a nice change from the office for 2 days.

When I am on the road, especially for work, I find little ways to save money. Since I have to eat out almost 100% of the time while on the road I have gotten creative. Here are a few ideas that I use regularly:

• Hotel bar/restaurant: Sometimes pricey, sometimes not. Today my hotel is offering 50% off appetizers between 4 and 7PM. Not bad! Being solo I can get a meal for under $10 based on the menu prices. Bonus I don't even have to drive!
• Find a hotel with cheap restaurants nearby. Do a little searching on yelp and google to see what is close. I also use my phone when actually there to narrow down my options based on distance and price. Sometimes I find some great local places I would have missed otherwise.
• Carry coupons: I have a few that I keep in my bag for chains like Chipotle, Subway, Quiznos, etc. If I happen to be near one I can stop in with coupons and spend less. The less I spend the more of the per diem I get to keep!
• Grab snacks from the grocery store at home and bring with me in my carry on bag. I don't have to stop for expensive gas station snacks. I have them with me already! Worst case I eat them when back home. I like crackers, nuts, and candy bars as they take little space and don't weigh much.
• Hotel Room: I always try to get one with a fridge/microwave and free internet access. It is nice to have the option of going to a grocery store if I want. If I am gone for more than one night this is even more important. Free internet allows me to be entertained and get things done while away. 

Traveling for work doesn't have to drain the wallet. In my case I actually make money off the per diem and also earn extra miles for the business expenses that get reimbursed to me. All of this adds up over time and allows me to travel overseas for awesome vacations to Asia and beyond. Make the most of it!

Staying Ahead: Pay Retail Price as LAST resort

If someone says they can't stick to a budget then they simply are not trying. I used to think this too until I sat down and did a full evaluation of my finances and what is really important to me.

One of the methods I used to stay ahead is to shop around for what I need. For example: I need to buy some new clothes. My shorts and jeans are worn and have holes in them. I need replacements but don't have a lot money set aside to go buy all brand new stuff. Instead I look to other sources.

When I go clothes shopping (maybe once per year, I hate it!) I always start at Goodwill. They have a good selections and very affordable. I then look to my local thrift stores to fill any gaps. If I still cannot find what I need I look to closeout stores such as Ross and also check for coupons. Finally if the need is dire I will go to Old Navy (with coupons) and get what I need.

The main point of this, no matter what you are buying, is to buy retail as a last resort. Why pay full price if you don't have too? Use coupons, gift cards, sales, thrift stores, ebay, craigslist, and any other resource you can to get the costs down. Do otherwise is just plain lazy and irresponsible.

Shop smarter not harder!