Tag Archive | "budget"

The financial challenges of a full-time freelancer

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The financial challenges of a full-time freelancer


Freelancer

With the decision to give up summer sales, I became a full time freelancer. Rather, a part time freelancer because the goal is to limit how much time I spend working until I begin MBA school in the Fall.

Although I don’t have much time under my belt being completely self-employed, I have discovered a couple of financial challenges.

Health Insurance

One of the top concerns that I have is health insurance. We lost our health insurance when I quit full time employment in April. If any of you have ever looked at COBRA, it’s cost prohibitive for most people because your employer paid most of the cost for you.

I investigated health insurance alternatives through a broker as well as some price comparison I did myself online. I could easily find insurance that was half the price of COBRA but even then, it was too expensive for us.

We are fortunate in that we’ll have health insurance when I begin school in the Fall.

Expect your health insurance costs to at least double when you become self-employed – especially if your family has a history of medical issues.

Budgeting

I’m a lists guy. I like constancy. I like stability. I like predictability.

You lose all of that when you first become a freelancer. Before, my budget worked on a set, fixed amount coming in every month. So determining how much I could spend was very straightforward.

Now that my income is variable (and frankly less), I’m struggling with how to best budget. We have some expenses that are set and happen at the same time every month – cell phone bill, car payment, etc.

But our other budget accounts, such as food, are now also variable depending on how much money is in the bank.

Honestly, it’s a disconcerting feeling.

I’ve found that I have to budget for a minimum. What’s the minimum that I expect to earn each month? What’s the minimum that I can spend on pretty much everything?

Consequently, I’m learning that our budget has to be very fluid. I can’t always use in this month’s budget what worked in last month’s budget. I have to be flexible. I have to readily change our allocations based on my expectations for the next several weeks.

Credit Cards

I’ve made some strong arguments against credit cards and a few arguments for credit cards.

I’ve spent the last few years transitioning all recurring bills to auto-withdrawal from our checking account. But since I don’t know, like I did before, that I’ll always have the right amount of money in my checking account at the right times during the month, I find myself moving everything to a credit card so that I can make one convenient monthly payment.

Let me be clear. I’m not suggesting that you live off of credit cards. But they can be helpful if you pay them off every month and don’t incur interest charges.

Your Own Space

I half jokingly told my wife this morning, “You don’t seem to understand the working part of working from home.” To which she just grinned.

With three kids and a wife who want my attention, it’s very easy to be distracted.

There are several options on where to work:

  • Working out of a coffee shop – There is just something romantic about this thought. Sitting at some cafe with a laptop in front of you where the people know your name (think Cheers but without Ted Danson’s hair or ego). Of course, drinking premium coffee, or hot chocolate in my case, can be an expensive habit.
  • Coworking or renting space – I also love the idea of coworking. Basically, you pay daily, weekly or monthly for access to a shared work environment. The idea is that by working around others like yourself, you can bounce ideas off of each other. Cheaper than renting an office, but far from free and only in select cities.
  • Home office – Probably the most economical, but you may face interruptions…lots of tiny little interruptions like, “Daddy, can I do your hair?” or “Here’s the baby.” Time away from work can be just as costly as either of the two options above because you aren’t bringing in money. Also, you may have some outlay if you need to setup an office in your home.

Marketing

This goes without saying but I’m going to say it anyways – you have to spend time every week or day acquiring new customers.

Depending on your craft, the best methods can vary.

For example, I have a friend who is breaking into the real estate market. More specifically, he has opened a Title business to close on homes. He spends a lot of time at networking events. Most of which have a cost to join.

I recommend looking at sites like Meetup.com and LinkedIn to see if there are groups in your area that you can attend for free.

Some other marketing costs you should consider:

What financial challenges have you found as a freelancer?

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3 Guides to better personal financial success

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3 Guides to better personal financial success


My wife and I have been teaching a Family Relations class at church that includes a section on money management. Writing all of these posts on finances has come in handy as I have a lot of material on the topic of money.

I want to share some of the principles and take-aways from our last lesson which focused on the basics or foundation to good money management.

Live on less than you earn

If you aren’t familiar with it already, that video clip is a duplication of an old Saturday Night Live sketch with Steve Martin.

Hopefully, you already know that you should live on less than you earn. But actually doing it can be pretty hard sometimes.

“I have discovered that there is no way that you can ever earn more than you can spend. I am convinced that it is not the amount of money an individual earns that brings peace of mind as much as it is having control of his money.”

N. Eldon Tanner

Read the first line of that quote again if you need to – I did. The message is simple – there are always things to buy and ways to spend money regardless of how much money you make.

The key to happiness is to avoid the bondage that comes with debt. Money and interest can be a very cruel taskmaster when used improperly.

Owe no man anything

A hundred years ago, having a mortgage would have been considered filthy or immoral. If you wanted to own land or a home, then you worked and saved for it.

Most families built their own home.

And yet, debt financing a home today is the standard. Saving enough money to buy a home seems unfathomable to so many.

Banks and lenders have done a great job teaching us that we need their money. It’s a lie. A complete and total lie.

That lie created the collapse in the housing market over the last several years. Consumers believed that we had to won a home – it’s the American dream. Banks believed that we’d never foreclose on the American dream and that home prices would always go up.

Unfortunately, inflated home prices caught up with too many and the bottom fell out.

So how do you avoid having a mortgage?

Dave Ramsey tells a story that I love. He describes a young couple that make a combined $80k a year. They rented a small place and lived on $30k and saved $50k every year. After four years, they had $200k in the bank. They found a modest home for $150k and then spent the other $50k furnishing it however they wanted to.

Awesome!

I’m sure you are thinking, “Yeah, well, I don’t make $80k a year,” or, “I have more expenses and kids and blah blah blah.”

If you are thinking anything like that then you need to change your paradigm. You need to change how you think about money.

It might take you longer than four years but you can do it. You can own a home without a mortgage. You can own a car without a car payment. You can have what you want..in time.

Learn to be patient.

If decide that you just have to get a mortgage, then at least save enough to secure a 15 year mortgage. You will pay substantially less.

Tips for spending less than you make

Saving that much money takes a lot of discipline and time. Let me give you some pointers.

  • Setup auto-savings – Determine how much you are going to save each paycheck – let’s say 20%. Use direct deposit or automatic transfers to put that money into a separate account that is not easily accessed or spent. Basically, make the money disappear and forget it’s even there. Don’t rely on yourself to make the decision every paycheck to save the money.
  • Develop and live within a budget – One of the most crucial factors in your success will be how well you live by a budget. Just to be clear, budgeting is not tracking how much you spend. Budgeting is setting limits to how much you spend and then living by those budgets. Some more bugeting tips.
  • Cut up your credit cards – Just be done with them. If you have an issue with overspending, then take away your ability to overspend. I don’t care about the rewards – they are just gimmicks designed to take your money. Studies have shown that people who use credit cards spend more than those without. Fact.
  • Use cash only – If you find that even with just a debit card you find yourself racking up overage charges or going onto an overdraft credit line, then move to a cash only system. Only use cash. If the cash is gone, then you are done spending. That simple.

 I may not have said too much in this post that you haven’t already heard or read. However, I do hope that you’ll walk away better motivated to make needed changes.

Take a look at your life today, target some specific areas for improvement and then go for it. But go all out and make it happen!

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Timebox your way to better financial health

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Timebox your way to better financial health


Timeboxing is a concept normally used in project management, especially software development. Don’t worry though. This post is not about software or coding. Rather, this post is about breaking down a large task into smaller tasks and giving each one a due date.

Usually, a schedule is broken into various timeboxes, or chunks of time. Each timebox can be days, weeks or even months. The point is to find a way to create manageable tasks or projects, prioritize them and then execute.

Timebox Example

Timeboxing and your finances

So let’s talk about how this relates to financial planning. For our example, let’s say that you have debt. A lot of debt. Something in the ballpark of $20,000 across three credit cards. You also have a goal to save money for retirement. Eliminating debt and saving for retirement can feel like conflicting or daunting tasks. That’s when timeboxing comes into play. Break it down and make it specific and manageable.

Eliminating debt is a series of steps.

  1. Create a budget
  2. Eliminate excess spending
  3. Pay more towards your debt
  4. Use the snowball method

Saving for retirement is also a series of steps.

  1. Create a budget
  2. Create an investment plan
  3. Eliminate excess spending
  4. Eliminate debt
  5. Put money into retirement accounts
  6. Put more money into retirement accounts

You’ll notice that some of the steps for both goals are the same. And eliminating debt is really a step towards the larger goal of saving for retirement. So let’s put timeboxing to work for you. Get out a piece of paper (or do this in Word, Excel, etc) and create a series of boxes.

  • Box 1: Create a Budget 
    I’m not going to cover how to create a budget in this post (though you can read this post on how to budget to learn). Creating a good, realistic budget should take 1-3 weeks depending on how complex your finances are. So write “Create a budget” in the first box and give it a due date of 1-3 weeks from today.
  • Box 2: Create an Investment Plan
    You can work on goals concurrently or at the same time. For example, you can work on creating an investment plan at the same time as you are working on creating a budget. But a good investment strategy may take longer to develop. So we’ll write “Create an Investment Plan” in this box and put a due date of 1 month on it. For overlapping goals or tasks, you can put the goals on top of each other to visually show that you have multiple things you are working on. A word of caution though – do not give yourself too many tasks to work on at the same time. That will in part defeat the purpose of timeboxing. Don’t overwhelm yourself. Make things simple and manageable.
  • Box 3: Eliminate Excess Spending 
    As you create your budget, you’ll find areas where you are either overspending or you just don’t need to be spending. For example, Dining Out could be reduced from $200 to $100 a month. You can cancel monthly subscriptions to magazines, newspapers or other media. Canceling and making final payments may take 1 month. So write “Eliminate excess spending” in the second box and give it a due date of 1 month after the Create a Budget due date. You can later add to the box, as a checklist of sorts, the specific expenditures you are going to eliminate.
  • Box 4: Pay More Towards Your Debt 
    With the additional money that you are able to save from eliminating excess spending, start paying as much towards the debt with the highest interest rate. In our example, let’s say that one of the credit cards, a Capital One card, has a balance of $2,000 and an interest rate of 24.99%, and you can now pay $400 towards that balance. So in this box, write “Pay Down Capital One” and give it a due date of 5 months (assuming you can pay $400 a month towards it). Though, please don’t forget to keep paying the minimum on the other cards.
  • Box 5: Use the Snowball Method 
    Once you have the first card paid off, you can take that $400 and put it towards another credit card (learn more about the snowball method). So write “Pay Down Credit Card #2” and its due date in the next box. Hopefully you are getting the point. Make as many boxes as you need for each debt that you plan to pay off.
  • Box 6: Put Money into Retirement Accounts 
    With the dent eliminated, you’ll be able to put all of that money towards your retirement accounts. For our example, let’s assume that it will take 18 months to complete the first four boxes. So in this box, write “Contribute to 401k” or “Contribute to Roth IRA”. You’ll probably not have a due date in this box since you should be saving until the day you retire.
  • Box 7: Put More Money into Retirement Accounts 
    Rinse and repeat. Once you’ve reached this point in your life, you’ll want to re-evaluate your budget and look for all new ways to save money or make more money. Actually, you should be doing this all along the way. So write in this box “Find New Ways to Save”.

Nothing that I’ve presented above is new or revolutionary. Rather, timeboxing is just a way of making a plan. It’s about taking the big task of saving for retirement and breaking it into specific, actionable goals with due dates.

Benefits of timeboxing

The immediate benefit is the value of having a plan. Instead of feeling frustrated or powerless, you’ll feel empowered by your plan to reach your goals.

The bigger benefit, in my opinion, is what I’m calling the halo effect or the rush of excitement you get when you successfully finish a task or goal. Crossing a finish line gives you energy to continue towards the next finish line. So with each box that you complete, you can pat yourself on the back and feel good about what you’ve accomplished.

What other planning techniques have you tried and found successful? And for more money saving ideas, follow Rabbit Funds on Twitter.

Also, this post was featured in the Carnival of Personal Finance #329.

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4 Tips to good (or better) budgeting

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4 Tips to good (or better) budgeting


True story: On graduation day, Alice tells her dad that they need to quickly stop by the Tuition Office before going to the graduation ceremony. Once they arrive at the office, her unsuspecting father is told that Alice has an outstanding balance of over $2000 and won’t be allowed to graduate unless it’s paid in full on the spot.

Man FrowningBegrudgingly, her dad pays the bill. Frustrated, he asks her why she hadn’t managed her money better and paid the bill.

Alice remarks, “I don’t know how this happend. I kept a perfect budget all four years and I can tell you where every penny went.”

Her dad responds, “That’s not budgeting. That’s accounting.”

So what’s the difference between accounting and budgeting?

The distinction may be subtle, but is very important.

  • Accounting is keeping a record of everything you’ve earned and spent.
  • Budgeting is setting limits and keeping to those limits.

Budgeting is a very proactive activity. Budgeting is taking the time to decide in advance how you are going to spend your money and how you are not going to spend your money. A good budgeter will rarely end up in bankruptcy. A good accountant can still end up in bankruptcy because accounting focuses on the past instead of the future. Accounting just tells you what you did instead of planning for what you are going to do.

Have I made my point clear? I hope so.

Now, let’s talk about a couple of basic tips for good budgeting.

#1: Start with a budget of how you are currently spending money, then tweak

A common pitfall is to create a budget that is completely unrealistic. So your first draft should just document how much money you currently earn and where you are spending your money. With that outline as a base, start making changes and tweaks. For example, here’s a real basic first draft just writing down what I’m currently spending:

  • Income after taxes: $2500
  • Mortgage: $900
  • Groceries: $700
  • Gas: $100
  • Cable/Internet: $100
  • Utilities: $125
  • Credit Card Payment: $75
  • Dining Out: $200
  • Cell Phone: $150
  • Clothing: $200
  • Other: $50

If you add all of that up, you’ll find that I’m spending $100 more each month than I bring home. No wonder, my credit card balance keeps climbing. Now, here’s a revised budget based on that first draft (with the changes highlighted).

  • Income after taxes: $2500
  • Mortgage: $900
  • Groceries: $500
  • Gas: $100
  • Cable/Internet: $100
  • Utilities: $125
  • Credit Card Payment: $375
  • Dining Out: $100
  • Cell Phone: $150
  • Clothing: $100
  • Other: $50

Just by controlling how much I’m spending on food and clothes, I am able to put another $300 each month towards paying off the credit card! What’s really cool is that as soon as the credit card is paid off, that’s $375 a month ($4500 a year) towards savings. That’s almost a fully funded Roth IRA.

#2: Simplify your budgeting by using a tool (I like online tools)

Creating a budget and then tracking just how well you keep to your budget can be a time consuming task. So make your life easier by using some type of tool. Here’s a list of options.

  • Microsoft Excel provides a real basic way of tracking your spending. But requires you to enter all of your transactions and can be very manual. If you are interested in Excel, you can download some budget templates on Microsoft’s website.
  • Intuit’s Mint.com is probably the most popular online tool. You can create budgets and sync your bank accounts so that Mint automatically updates your budget. You will have to “teach” Mint how to categorize your spending. But that’s pretty simple. For more info, check out this review of Mint.com. Or visit Mint.com, which is free.
  • PocketSmith is another online tool that features cash flow forecasting. Basically, they guess how much money you’ll have for the next 6-12 months based on your budgets. PocketSmith’s big thing is that they are calendar based. The basic plan is free with options to upgrade for either $5 or $12 a month. Visit PocketSmith.com.
  • Your bank may have a budgeting tool. For example, USAA.com offers budgeting for its members through its online site.

I’ve outlined just four options. Though, there are lots of tools out there. So do some research and find a solution that works for you.

#3: Only use cash if you need extra control

Okay, so this tip really could go on the prior point of using a tool, but I think it warrants its very own section. There is a very old school method of budgeting, that Dave Ramsey advocates, called envelopes. Basically, after each paycheck, you divide your money up into envelopes marked Groceries, Mortgage, Clothes, Gas, etc. You then carry those envelopes around and only spend the money in the envelopes.

For example, if I have $50 in my Dining Out envelope, then I can’t spend more than $50. Once the money is gone, I’m done spending money. The concept of not spending money that you already have is becoming, unfortunately, a foreign concept in today’s world of easy consumer credit.

So if you know that you have a problem with overspending, then use this simple system to get it under control.

#4: Have a Blow Money category

Let’s all just be honest and acknowledge that you are not perfect and will probably buy something you shouldn’t have. The thing is, it’s not a mistake if you plan for it. Give yourself a small allowance of discretionary money. Meaning, money that you can just blow on whatever you want.

If you are just starting out, then your Blow Money category may only be $20. As you remove debt and increase your savings, then you can increase your discretionary or blow money.

If you have any tips that have helped you budget, then please let us know in the comments. Also, follow Rabbit Funds on Twitter if you haven’t already.

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Summer Utility Bills Got You Down? Find Another Way to Chill!

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Summer Utility Bills Got You Down? Find Another Way to Chill!


You probably already pay a lot for your utilities.  With electronics galore cluttering up your house, old appliances draining precious energy, and summer temperatures soaring (necessitating the dreaded switch to AC), you’re beginning to feel the crunch on your finances from summer utility bills.

However, there are a few simple tricks you can try to cut down on your utility bills through the hot summer months.

  1. ThermometerUpgrade to energy star. Trade in your old appliances for new energy-efficient models.  True, there is a hefty initial cost, but between government tax credits, rebates or cash back from utility companies, and a reduction of 25-30% in your monthly bill, they practically pay for themselves.  Along these lines, you can also consider low-flow toilets, tankless water heaters, and a more efficient AC unit and furnace.  Bonus: you’re making the planet a little greener.
  2. Stop leakage. Nobody likes a leaky…well, anything.  You certainly don’t want to let out the “bought air”, so think about hiring an auditor to come out and assess areas that may be leaking.  If an audit is out of your price range, you can try it on your own by running your hands along the edges of doors, windows, baseboards, outlets, etc. to determine potential problem areas.  Then you can simply fill them in with foam weather stripping or caulk (both can be obtained pretty cheaply at your local hardware store).
  3. Get smart strips. These work in much the same way as the sleep mode on your computer.  When electronics are not in use, the smart strip cuts off power to the devices plugged into it, relieving you of the burden of paying for idle current or alternately, the constant annoyance of unplugging everything in your house.  Most of these strips claim to pay for themselves within six weeks of usage.  Not too shabby.
  4. Use a grill. Summer cooking can overheat your house and put your AC on high alert.  So get outside and enjoy those nice evening breezes.  In addition to keeping your temperature cool and controlled indoors, cooking outside cuts down on electricity or gas needed to run your stove.  And BBQ is delicious!
  5. Plant a tree. Yeah, it’s for your tomorrow, but that doesn’t mean you shouldn’t think about it today.  Having leafy trees that soar above your rooftop will help keep your house cool throughout the summer, so even if it doesn’t get tall enough for a few years, it’s an inexpensive way to make your house more efficient in the long run and add a little natural beauty.

What else hav you tried in order to save money during the summer months? For more money saving tips, sign-up for Rabbit Funds’ RSS Feed!

Author Info: Thomas Warren is a content writer for Go College, one of the oldest and most trusted resources to guide students on how to finance and succeed in college.

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REVIEW: Mint.com and the new Goals feature

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REVIEW: Mint.com and the new Goals feature


For the purpose of this post, I am assuming that you already believe in budgeting. Meaning, I intend to review Mint.com as a budgeting software solution and not attempt to persuade you that you should be budgeting (though you should be).

Before detailing my experiences, let me start by saying that I love Mint.com. I had been a hardcore Microsoft Money user for years and was devastated to find out that they were discontinuing the product. Looking for a cheap, straightforward alternative, I decided to attempt Mint.com.

Here’s a brief outline of what I like and don’t like.

Likes

  1. Free – If you are just starting to budget, then Mint is a good way to get your feet wet with a strong tool that is user friendly and free.
  2. Auto-updates my accounts – This feature is fairly standard to most budgeting software but still worth mentioning. You use an obscure bank or credit union, then auto-updating may not be possible.
  3. Offers – Mint.com makes money through third party offers such as credit card companies and brokerage firms. First, the “advertising” is not obtrusive to the user experience and you usually have to go looking for the offers (“Ways to Save” tab). Second, although I am opposed to credit cards and the like, I believe that consumers with credit card debt may benefit from lower interest rates or better terms. So I believe there is value in helping compare offers.

Dislikes

  1. Only simple reports – Having used Microsoft Money for years, I had fallen in love with being able to quickly and easily create custom reports to analyze just about any part of my financial house. With Mint, you are restricted to a small set of non-customizable reports.
  2. No debt management tool – Ok, so that statement is a little misleading. Until the recent addition of Goals, Mint offered no way to systematically eliminate your debt using techniques such as the debt snowball. Though, I outline my experience with the tool below.
  3. Mint.com Budget Left OverDoes not take into account savings – I really like the Budgeting feature. It is straightforward and easily accommodates custom budgets and helps you save for non-monthly expenditures (i.e. it tells me how much to save each month in order to pay for my wife’s salon trip every 4 months that always costs more than she says it will). However, I tried to add a budget for what I stick into my Roth IRA account, which is tracked by Mint, and the budget disappeared. Meaning, that investment amount isn’t subtracted from my spending and it appears that I have more money to spend than I actually do (see image to the right). I tried adding a ‘dummy’ Savings budget so I’d know not to spend the money, but then the investment isn’t tracked correctly.

The new Goals feature

Let me start by saying that it’s about time!

I’m honestly a little surprised that it has taken the team at Mint.com this long to add a goals feature. Either way, we have it now. When you click on the Goals tab, you are presented with a number of “off the shelf” options or a create your own goal option.

Mint.com Goals Feature

“Get out of Debt” goal

Excited to see how the debt elimination feature worked, I decided to see how I could payoff my mortgage sooner. To my surprise, the only debt I was allowed to eliminate was my one credit card (which has a balance of $176). Dismayed, I selected my credit card and hit Next. Mint then analyzed my discretionary income (or extra income after expenses), the minimum due on my credit card, and the interest rate. Mint’s advice was to pay the minimum, only $15, for one year despite sufficient discretionary income to pay it off much sooner. Like now. Simply put – Mint’s debt management program failed.

“Take a Trip” goal

Though, I believe everyone deserves a fair chance. So I attempted to create a different goal. My little family will be headed out to Washington D.C. next Spring to see her family. Below is what I entered. This time, I felt everything worked very well. We were able to give the goal our own name and upload a pic to motivate ourselves – very cool.

Mint.com Trip Planning

Despite the drawbacks of the debt reduction goal, I definitely give the Goals feature two thumbs up.

Last question, is it safe?

Let’s be honest. If I am sharing my account information with a site, I want to know that it’s safe. In a video posted to YouTube, Mint’s CEO Aaron Patzer explains how Mint approaches security. I’m pretty paranoid about my identity being stolen and take a good number of precautions. So far though, I have felt completely safe using Mint.

My recommendation is that if you are not currently using any budget software or if you are unsatisfied with the one you are using (this includes Microsoft Excel), then check out Mint.com.

For more tips and reviews, subscribe to Rabbit Fund’s RSS Feed!

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Budget-Friendly Remodeling Tips [guest post]

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Budget-Friendly Remodeling Tips [guest post]


If you’ve been plagued by an ugly kitchen since the day you moved into your new home (the ’70s called and they want their ochre tile and avocado wallpaper back) or you’re disappointed with the limited or largely unusable storage space provided (not even a lazy susan can help those deep corner cabinets), then maybe it’s time to think about a remodel.

Old Home“But wait!” you may say, “We’re in a recession!  How can I possibly consider a remodel right now?”  There are several good reasons why now is the perfect time to remodel.

  1. We’re in a recession!  This is terrible news for most people, but not for those who are looking to re-design on a dime.  Businesses are hurting and as a result, you stand to take advantage of outrageously low prices.  Many stores are willing to price match or haggle just to get your business, so don’t be afraid to ask for concessions.
  2. Contractors need work, too.  Not the DIY type but you don’t think you can afford a contractor?  Not true.  Construction jobs are on the DL during any recession, so the market for contractors (and laborers) is flooded.  Now is the best time to capitalize on grade A services for way less money.
  3. The internet is a great resource.  It’s no surprise that you can find better prices by looking online, but ecommerce is booming right now and because many sites do not have the overhead of running a store-front, they can afford to give you the same merchandise for half the price.
  4. People are selling stuff.  If you need it, you can find it online for cheaper.  From eBay to Craig’s List, people are dumping all kinds of home items that you can pick up for a fraction of the retail cost.  Used flooring, cabinets, hardware, appliances, and even piping can be picked up and put into your home, saving you a ton of money if you’re willing to do a little leg work.  And the best part is, you’re doing your part to make your new home green by selecting recycled items.
  5. It pays to go green.  If you work a little green into your remodel, you stand to save a lot.  Replacing outdated appliances with energy-star compliant alternatives could equal cash back from the electric company (along with lower electric bills).  And tankless water heaters can also save you a ton of money because they only heat the water you use.  In some cases, there are even government incentives for using eco-friendly products.  So look into green options to keep saving even after your remodel is done.

The beautiful, new, workable space you’ve been dreaming of is not out of reach just because we’re in a recession.  If you shop smart, you can have it all for less and even continue to save after the fact.  But don’t forget that the best reason to remodel is a return on investment.  If you spend wisely, you stand to make all that money back (and possibly more) when it comes time to sell your house.  And in a market flooded with foreclosures, a newly remodeled space could mean the difference between a quick sale and no sale at all.

Let us know in the comments how you’ve saved money doing a remodel!

Written by Jennifer Kardish, who is a communications coordinator at Kitchen Cabinet Mart. Check out their free design tips for your kitchen and home.

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No Spend Month Recap: We blew it!

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No Spend Month Recap: We blew it!


Recap: My wife and I decided to take on J. Money’s No Spend Challenge he issued on Untemplater. We set specific guidelines and set out to save more money by spending less.

FailureThe Results

We were doing just fine and keeping our desires in check. Then the Gun Show happened. I’ve been wanting a handgun for some time now. We found just the piece I wanted at a decent price. With the money already in savings, we decided to make the purchase.

Well that opened the door. Once we had made one purchase, it’s like we felt liberated to make other purchases that we had been holding off on. By the end of the day, we had spent $841.72!

At that point we gave up on the No Spend month and decided to try again a different month. Fortunately, we had been very conservative the first 17 days of the month, so we couldn’t do as much damage in the remaining 14 days.

What we learned

First, just because you trip and fall doesn’t mean you have to hit your head against a rock too. Once we had made one purchase that we shouldn’t have made, then we should have been extra vigilant to stop there. Instead, we just let our guard down. So don’t let one mistake snowball into another.

Second, have a support group outside of just your spouse. My wife and I both made the decision to break our No Spend challenge. Had we been able to call on a third person, then we may have made different decisions. If it works for alcoholics (addiction) then it will work for spending (addiction).

Last, boy I was glad that we did have a savings account and we didn’t put anything on a credit card. Even though we spent a sizable amount of money in one day, not one penny was put on a credit card. It felt great to just buy want we wanted to (I claimed “needed to”) without incurring a single iota of debt. So save for big purchases and avoid debt.

Let’s try again

We are determined to have a No Spend month. So stay tuned for Round 2.

Posted in Cash Management, FeaturedComments (1)

I’m taking J. Money’s 30-day “No Spend” challenge

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I’m taking J. Money’s 30-day “No Spend” challenge


Over at Untemplater.com, J. Money issued a challenge to not spend any money outside of the necessary (e.g. groceries and utilities) for 30 days. Well, I’m taking him up on it.

J Money from Budgets are SexyLast year, my wife and I gave up TV and movies for 30 days. The result – we sold our TV afterwards and have loved being TV-free ever since.

So I’m anxious/curious to see what habits and mindsets change for us. This experiment could be a real paradigm shifter for us.

The Dates

We will begin on March 31st at midnight and end on April 30th at midnight.

The Guidelines

  1. The following expenses are acceptable: mortgage, HOA, utilities, cell phone bill, groceries (see Guideline #2), auto and home insurance, and gas.
  2. We have a $500 a month grocery allowance. Some of that $500 is on non-essential expenses. So, we are changing that budget to $450 for the month of April.
  3. Exceptions: A birthday gift for my father and tickets to the Man Expo (I’m just not missing that)

I will report back weekly in a post about how well we are doing and how we are overcoming temptations, which I know there will be many. Heck, I added three books to my Amazon wishlist today.

So have you ever tried living off the bare minimum? Any advice? Let me know in the comments

Posted in Cash Management, FeaturedComments (3)

INTERVIEW: Seth Risenmay, Founder of MoneyDesktop.com

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INTERVIEW: Seth Risenmay, Founder of MoneyDesktop.com


I have a real treat today. Seth Risenmay, the founder of MoneyDesktop.com, answered some questions from me and also graciously offered a promo code for a free 3 month trial of his product.

Money DesktopAbout MoneyDesktop

For anyone unfamiliar with MoneyDesktop, it’s an online tool to track your finances, plan for the future, and most importantly get out of debt. What’s unique about MoneyDesktop in a world of sites like Mint.com of PocketSmith.com is that the software auto-generates a plan using a variety of methods to help you get out of debt the most efficient way.

So for example, the ever-popular debt snowball is built in. Also, the less well known mortgage checking account method is also available. You the user are able to select the method that you are comfortable with, tie it into your overall budgeting and finances, and get out of debt faster.

Essentially, it’s a one stop financial wizard.

The Interview

RabbitFunds: Why did you decide to start MoneyDesktop?

Seth Risenmay: I started MD because I wanted to get America out of debt. We look at debt as THE greatest threat to the future of our country. When you think about it, our country has been able to defeat Nazism, Communism etc… and the one enemy that actually has a shot at bringing down our country is debt.

RF: Where did you come up with the idea for the feature set included in MoneyDesktop?

Seth: We had a database of 39,000 customers that gave us feedback on our product. We asked all of them this question; “What does this product need to be to give you the best chance of success?” From this market research we learned that America needed a product that did not then exist and so we set out to build it. It took 4 years and about $5 million to build but we feel confident that MD is the greatest debt and personal financial management tool in existence.

RF: What is different about MoneyDesktop as compared to Mint or PocketSmith?

Seth: The greatest difference between MoneyDesktop and any of our competitors is that it is first and foremost a debt tool. Other PFM’s are typically tools that help you track where your money went, but if that is all you do that would be like driving your car down the road backwards, you’ve only seen where you’ve been, not where you’re going. Some products and companies help you project the future and your debt payoff but since they don’t track where your money is going the projections are inaccurate. MoneyDesktop is the only company that looks to the past by tracking your spending, to help you project an accurate future for debt elimination, with real time in the present instructions in the form of text messages and emails. We also have systems to help people make decisions with financial intelligence, which no one else has. We also help people increase their discretionary income to help them get out of debt even faster. We do this by actually increasing their cash flow while lowering their bills and payments. All of this is unheard of to most PFM’s. I would say that we are one of, if not the only DPFM (debt and personal financial management).

RF: Are there any plans to make the service free like Mint?

Seth: We have thought a lot about offering our services for free like Mint. The problem is that we have found that if a person is not paying for a service they do not value it enough to actually implement it into their life and become successful. We wanted people to actually commit to their financial wellness. However, we also understand that there are a lot of people who desperately need MoneyDesktop who may need our services for free. Because of this, we have created a promotion called 3 for Free. If a user of MoneyDesktop is willing to help us in our mission to get America out of debt then we feel they have shown the commitment necessary to succeed and deserve to receive our services for free. If they refer 3 other people to MoneyDesktop our system will automatically track that and when 3 others have signed up the referrer will receive MoneyDesktop free for life!

As mentioned above, Seth was kind enough to offer a free 3 month trial to any RabbitFunds readers with a special reduced price of $14.95 afterwards. Just use the promo code “Rabbit” when you sign-up.

RF: What do you hope that users will achieve by using your site?

Seth: Total financial wellness. We want our users to become debt free, achieve financial freedom, gain financial intelligence, and become wise stewards of their money and wealth. And hopefully by using the 3 for Free feature they can help start a community of people committed to getting out of debt which will help strengthen our country and in a lot of preserve what we know as America for generations to come.

RF: How has using the software helped your own family?

Seth: I know where every penny goes, I know when every debt will be eliminated and I have piece of mind knowing that I am being a wise steward of the things I’ve been blessed with. It has helped me eliminate all of my debt with a little left on my home still to go.

RF: What upgrades or changes can users expect to see in the coming 6-12 months?

Seth: With tax season upon us we are adding features that will allow a person to easily organize their finances for tax season with their CPA. We are also adding added benefits of ID protection and Credit Monitoring. Other companies like LifeLock will charge you upwards of $10 per month for each of those services, we are close to having those services provided to our subscribers at no additional fee as an added benefit of using MoneyDesktop. We are also redoing the set up wizard for a more simple and effective setup to get people using it more efficiently.

For More Info

Thank you Seth for your time. If you have any questions or would like to see more then visit MoneyDesktop.com or follow them on Twitter at @MoneyDesktop.

Posted in Debt, Cash Management, FeaturedComments (2)

My car affects my self esteem, and other reasons I’m pathetic

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My car affects my self esteem, and other reasons I’m pathetic


I need therapy. Unfortunately, it’s not in my budget. So instead of sitting comfortably in a recliner pouring out my heart to a straight faced psychiatrist, I’m sitting on an exercise ball in an unfinished basement vigorously typing out my thoughts to you, the reader. Please be nice.

old-minivanReason #1 that I’m pathetic: My car

My wife and I are looking to sell my baby (Hyundai Santa Fe) and purchase a car outright with cash so that we remove all debt except for our mortgage (Dave Ramsey would be so proud of me). Though last week, I realized just how much my car affects my self esteem. I pulled into a parking stall at our local grocery store and noticed the older, worn car parked next to my white beauty. Suddenly, thoughts of driving an older mini-van with more miles, fewer features, and some strange color flashed before my horror filled eyes. Making those monthly payments no longer seemed so bad.

Reason #2 that I’m pathetic: My ties

I was once told by a psychic that I had been a female in a prior life (which is a whole other story for another day). Apparently the desire for nice clothing carried over into this life. I have a large collection of ties of various colors and styles. However, I have very strict guidelines for my ties:

  1. I do not wear prints or solid colors (Regis Philbin).
  2. I only wear 100% silk.
  3. I don’t like anything wider than 3.75 inches.
  4. I only shop for ties at certain stores. And I won’t buy a style that is common.
  5. Last, I know how to tie my tie using about five different knots, though I use a slight variation of the Prince Albert knot because I want my ties to appear different from other ties.

IKEA-bookshelvesReason #3 that I’m pathetic: My bookshelves

My wife and I decided some time ago that books and music would replace television in our home. We purchased a nice set of bookshelves from IKEA and put them in our living room which is adjacent to the foyer. We have filled the shelves with books, framed pictures, and a nice clock we received at our wedding. Occasionally when people visit, I honestly hope that they notice the absence of a TV and our bookshelves filled with classics as well as the artwork on the walls.

Why am I telling you all of this?

It’s all about Opportunity Cost or the cost of the next best thing for which you could have used your money.

With each material object above, I have two options: (1) purchase and satiate an emotional need or (2) not purchase and place the money in savings or pay off debt. If you choose Option #1, then you give up all of the future returns from investments or the interest saved by paying down debt. If you choose Option #2, then you receive an emotional spike but fore-go any future emotional satisfaction from investment returns.

The truth is that I find my self-esteem, satisfaction, or whatever you want to call it in part supported by both a solid investment strategy and certain material things. Though, I believe that through self-discipline we can reach a happy medium.

For example, my wife and I almost purchased a sewing machine on Black Friday. But we decided that we would postpone the purchase until we have no debt but our mortgage, which should only be a few months away. This way, we pay off debt (yeah!) and can still make the purchase we desire (double yeah!).

The key is to understand the opportunity cost of your decision and then make a plan that allows you to both accomplish your financial goals and live the life that you desire.

So I just listed my car on Craigslist. This ends my confession.

Posted in Budgeting, FeaturedComments (1)

Eat food in your pantry, you’ll save money. Really.

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Eat food in your pantry, you’ll save money. Really.


My wife and I recently made some changes to our budget and how we handle cash versus credit. The result is a stricter, more disciplined cash management system. As a result, we are having to rethink how we approach certain budgeted areas such as groceries.

As is probably the case with many of you, groceries are one of the largest bills we have. It’s amazing how many resources are consumed in sustaining the life of very tiny people.

I think we’ve all read articles talking about how we should make a shopping list before going to the store. That way, you avoid impulse purchasing or making several trips during the week. We almost always make a list. And yet, we still have what I’m going to call “unintentional food storage.” You know what I’m talking about. There is that can of tuna or box of pasta in your pantry that has been in there for ages. We never consume the food since it usually requires more ingredients which we don’t have on hand to make a meal.

Let me give you an example using that can of tuna. The reason my family usually doesn’t eat the tuna is because we often don’t have bread. My wife doesn’t like me eating a lot of breads (something about a low carb diet that I’m supposed to be on). But we have the tuna, some mix-ins like celery, nuts, and apples for flavor, and Vegenaise (I don’t like Mayo and don’t get me started on Miracle Whip). So all we need is bread and we’d have a sandwich. But go figure, we bought roast beef, provolone, and bread tonight so that we can make sandwiches. Now granted, I prefer roast beef over tuna. But, we could have saved money, or at least postponed the purchase until the next paycheck, had we just bought bread.

The point that I’m trying to make is that when planning a trip to the grocery store, dive into your unintentional food storage and see what you can use. One thing that you might try is eating through your freezer or pantry before making any large trips to the store. Make a list of only ingredients that are needed to finish off the half-meals already in your pantry. We recently tried this tip and found that we were able to spend much less money while we paid off some bills.

Posted in Saving Money, FeaturedComments (7)

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