Tag Archive | "overspending"

My relationship with food

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My relationship with food


As a young child, I was a bit of a runt. Short, but very thin. Then that whole puberty thing happened and I started to put on weight. I never got that big, but I never thinned out again.

As mothers always do, mine reassured me that my weight gain as an early teen was just part of growing up and I would thin out.

I think it’s just my genetics.

I was always self-aware of being sturdy – that’s what my mom called it. Fortunately, my Type Red personality overpowered the self-conscious part of me and didn’t allow me to miss out on too many opportunities.

However, I know I held back some times.

(Especially when it came to girls)

I had the privilege of serving a full-time service mission in Mexico City. When I left, I weighed just over 200 pounds (I’m 5’10”). By the end, I was down to 175 and feeling pretty confident.

Within a year of returning home to Utah, I was back up around 200 pounds.

Since then, I have dropped back down to 167, then up to 210, then down to 175, then up to 195 and I’m currently weighing in at 188. I’m on the HCG diet hoping to drop down to 175, which I believe is a healthy and attractive weight.

If you add that all up, I’ve lost 100 pounds in my life. That’s more than half of my current weight.

I’ve never regained the thin waistline of my childhood always having at least a spare tire.

Weight Loss

I’ve tried working out.

That’s how I dropped down to 167. I went to the gym three times a week for 1 1/2 hours each time. I felt great and was confident in my appearance.

But life happens and that stopped.

Part of my reason of losing 35 pounds last year was because I was applying to some top tier MBA programs. I didn’t want my physical appearance to taint any opinion of me.

This post may sound as if I am ranting and complaining.

I’m not. I’m giving the back story to a realization that I had today.

I was recently asked on Facebook why I would use such an extreme diet, such as HCG, to lose weight. I’ve always given two reasons. First, it’s fast. Second, it cleanses my body of toxins and shrinks my appetite.

However, I think there’s a bigger reason. The reason I put weight on so easily is because I am slave to my hunger. When I want to eat, my body and desires take over. I just eat. I lose control. Fortunately, I’ve never allowed myself to gain considerable weight. Or maybe my wife didn’t.

Today, as I was thinking about my hunger and great desire to break down and just eat, the thought occurred to me. “Maybe, I’m teaching my body to shut-up and listen to me. I’m teaching myself to control my appetite.”

The application of appetite control is far more reaching than just hunger.

We can describe many desires and wants in life as appetites: overspending, alcohol, adultery, cruelty, selfishness, greed, pornography, etc.

Any addiction is the indulgence of an appetite.

Through spending three weeks starving just about every moment that I am awake, I am learning to control my appetites. I’m learning that I am Master and Commander.

I once heard a story about a man who decided to quit using chewing tobacco. For many years, he carried a tin of tobacco in his pocket. Several times a day, he pulled it out, looked at it and then said, “Who is master here, you or me?”

How often do we carry our appetites in our pockets – tempting, reminding and calling to us? This man was fortunate enough to win every battle and eventually the war. But it’s a dangerous path.

I want to enjoy life, which means also enjoying food.

But I need to change the nature of my relationship with food. My appetites do not control me. None of them.

So yes, my diet is extreme and it’s not enjoyable. But I’m walking away with more than a slimmer silhouette. I’m walking away with self-mastery.

What appetites do you plan to control today, this week, month or year?

Posted in FamilyComments (4)

Are Social Media IPOs and the American Dollar the next bubbles that will burst?

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Are Social Media IPOs and the American Dollar the next bubbles that will burst?


For some reason, we humans seem to repeat some mistakes over and over again. From the sensational growth in the price of tulip bulbs in the 17th century to the dot com boom, we get caught up in the prospect of big returns and forget that the underlying asset hasn’t changed in value, or at least not by that much.

To help explain why you should care about this, I need to provide some foundational information.

Valuing Assets

For the purpose of our discussion, there are two ways to value an asset

  1. Economic Value – The price corresponds to or is correlated to the economic value that the asset provides. For example, a stock price of $100 is based on financial analysis that says earnings are sustainable and warrant such a price.
  2. Emotional Value – The price is a result of what we believe the asset is worth. Basically, I’m willing to pay $100 for a Tickle Me Elmo because we shoppers decided that it’s a must have item.

The Emotional Investment Cycle

I once saw an illustration depicting how many common investors operate. Basically, as a stock price rises, research heavy investors such as large banks invest. The price continues to rise. Common investors then begin to hear about it and jump on the bandwagon. The majority of common investors hear about the now “hot stock” as it is reaching its peak (inflated from everyone jumping on board). You then invest, watch the stock rise momentarily, and then see it fall. You either break-even or take a loss. The reason you made the investment was because of the emotion that surges around a hot stock tip and the hope that you can cash in.

Upon hearing the hot tip, you should have spent time investigating the underlying value of the asset (in this example, the company).

I personally have fallen into this trap, ignored the red flags telling me to dig deeper, and ended up losing money.

Examples of Bubbles

The Housing Bubble: I listened once as a banker described how the housing market grew and crashed. Banks believed that (1) housing prices always rise and (2) Americans will never default on the American dream – owning a home. So banks knowingly overvalued homes and over-lent. Consumers were all too happy to accept the overvaluations and extra cash. There was nothing to indicate that homes were actually worth that much other than the fact that we said so. The result – economic meltdown.

The Dot Com Era: Small Internet start-ups launched websites that began to generate traffic, though not necessarily revenue. Angel investors funded the start-ups until they were taken public through an IPO. Often, the IPO happened only a short time after the company began (meaning, no proven track record of earnings). Seeing easy money, many Internet companies rushed to the feeding trough. Amazingly, investors bought shares of companies that had no economic model or revenue history. The result – economic meltdown.

Is Social Media the Next Bubble?

A recent article on MediaPost.com related statements from Warren Buffett and Barry Diller warning that social media may become another bubble with many losers.

Buffett said, “Most of them will be overpriced… It’s extremely difficult to value social-networking-site companies.” Diller described the huge valuations of companies like Groupon as, “mathematically insane.”

I’m not an expert. But I do understand that a price based on an emotional valuation will fail. I also take great comfort in the fact that the Oracle of Omaha seems to agree with me. Or maybe it’s me agreeing with him (I don’t want to take too much credit).

As social media companies begin to go public, I can see the headlines alone driving an investment frenzy that will cost many common investors dearly. That is not to say that social media companies can’t or won’t make money for them and investors. My point is that you need to consider the financials of the company and environmental factors (or factors outside of the company) to determine whether or not the investment is a good prospect for inclusion in your portfolio or just another bubble that will burst your nest egg.

Currency ExchangeIs the American Dollar the Next Bubble?

Maybe you wouldn’t typically consider the US dollar a bubble. But it’s certainly traded like any other asset, so why not? Right now, our government is printing dollars at an alarming rate. What’s holding up the value of each one of those dollars? The belief that the government can back it.

So going back to the two valuation models above, is the value of a dollar based on the economic value or the emotional value? Well, Gross Domestic Product (GDP) fell from 2008 to 2009 and yet we added approx. $3.1 trillion in debt over those same two years. So we are printing more and turning out less. That relationship may be manifesting itself in the poor exchange rate between the dollar and other currencies such as the euro.

Basically, the dollar and everything tied to it (e.g. inflation, exchange rates) is subject to the same risks as any other investment if it rides up too high based on emotional value (e.g. exorbitant healthcare bills).

In fact, Standard & Poor’s issued a warning to the U.S. government just yesterday that the government’s triple A rating may be downgraded if the government deficit is not addressed quickly.

If you are concerned about the underlying value of the dollar, then write your representative or just vote a new one into office. Political change is like rebalancing an unbalanced investment portfolio.

Before jumping on the next hot trend…

Stop and ask yourself, “What economic or financial value does this asset create? And will it continue to create that value while I have it or invest in it?”

Posted in Investing, FeaturedComments (0)

Have you ever bought the Ziffer-Zoof Seeds that Dr. Seuss writes about?

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Have you ever bought the Ziffer-Zoof Seeds that Dr. Seuss writes about?


If you have kids and are much of a Dr. Seuss fan, then you’ve probably read Dr. Seuss’s Sleep Book. We were reading it to our two little girls a few nights ago when a part of it caught my attention. I suddenly realized that Dr. Seuss was financially savvy too.

Here’s the excerpt:

“At the fork of the road in the Vale of Va-Vode, five foot-weary salesmen have laid down their load. All day they’ve raced round in the heat, at top speeds, unsuccessfully trying to sell Ziffer-Zoot Seeds which nobody wants because nobody needs.”

What’s interesting is that I feel that I’ve bought these same seeds before. Now granted, they weren’t called Ziffer-Zoof seeds. Rather, I purchased fancy argyle socks, a new laptop even though the old one still worked, and a deal on Groupon that was great but not within my budget.

The point is that I bought products or services that I did not need. I just wanted them.

Dr. Seuss's Sleep BookDr. Seuss, though, teaches a very interesting lesson. The Ziffer-Zoof Seed salesmen aren’t having any success because the people of Whoville, or whatever realm they are in, don’t want what they don’t need. To help explain, I’m going to talk a little bit about the good ol’ days.

Life in the 1800s – A simpler time

But definitely a harder time by several standards. Due to a number of factors, such as a lack of refrigeration for most of the century, families spent most of their time working to support themselves (whether it be in or out of the home). Many families had to churn their own butter. Money was carefully saved in order to buy land or a home, rather than debt financing one. Clothes were mended and mended and then turned into rags once they could not be mended anymore.

Americans had wants, but their time, money, and energy were spent on satisfying needs and often foregoing wants.

Life in 2011 – Luxury after luxury

For most Americans, we have more luxuries than any other people in any other time has ever had or even dreamed of having. The modern grocery store is a logistical miracle. As a result, we have learned to rely less on ourselves. We spend more time and money pursuing our wants because our needs are so readily met. Everything is $0 Down OAC.

Americans spend their time, money, and energy satisfying our wants and foregoing our needs, which are often future needs such as retirement.

Satisfying wants is not a bad thing

But it can have bad side effects. Since we don’t have to focus on meeting our needs, we can easily become consumed with meeting our wants. So rather than spending our time being productive and bringing home the bacon, we are off spending the bacon on Ziffer-Zoof Seeds, which no one should want because nobody needs.

Late night infomercials have a PhD in selling Ziffer-Zoof Seeds. “Not only does this knife slice-n-dice and clean up after itself, but you’ll receive a second set completely free if you Act Now!” Why do I need or want two sets of the same knives? Why do I even need new knives? I should just sharpen the ones I have.

We simply need a fundamental shift in attitudes. We need to stop masking wants as needs and learning to forego now so we don’t have to forego later.

From now on, call it what it is

The next time you hear the siren call of the Ziffer-Zoof Seeds salesman, which may come in the mall, online, on TV or as the little devil on your shoulder, have the control to call what it is – Seeds of Destruction that Nobody Wants Because Nobody Needs.

What Ziffer-Zoof Seeds have you bought lately?

Posted in Budgeting, Saving MoneyComments (0)

Hey Tubs, overeating and not exercising is costing you money

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Hey Tubs, overeating and not exercising is costing you money


I mentioned a few weeks ago that, as with many others, my New Year’s Resolution was to lose weight. I am happy to say that I have lost 22 pounds since the beginning of the year. Between the HCG diet and now P90X (which is brutal), I feel better and my waistline is down several inches.

Mr. Potato Head & a DonutUnfortunately, we as Americans decided some time ago that instead of taste, nutrition, and health we wanted cheap food, a long shelf life, and fast preparation. Each time that I travel abroad, or even just to Canada, I am astounded by how good the food is, how much smaller the portions are, and the fact that I don’t feel like garbage after eating.

What many Americans don’t realize, or choose to ignore, is that fact that your eating and exercising decisions have long-lasting implications on aspects of your life outside of just health. Let me give you some examples.

Better looking people are hired and promoted more quickly

Historically, the taller and better looking Presidential candidate wins. Why? Because appearance affects our decisions. A recent study even showed that basketball referees call fewer fouls on players of their same race. Inappropriate? Yes. Human nature to judge a book by its cover? Yes

By having poor health, being overweight, and having more personal hygiene, you are negatively affecting your ability to increase your income. But there are fat millionaires you say. Of course there, but don’t plan on being one. If you want to improve your position or pay, then work out. As an example, women weighing 25 pounds more than the average woman earns $13,847 less. Whereas women weighing 25 pounds less than average earn $15,572 more. You may chalk that statistic up to the short skirt effect, but I bet the number for men are comparable (and I look terrible in a short skirt).

I’ll be perfectly honest. I will be applying to MBA school this Fall. One of the reasons that I want to be in better shape is so that I appear more physically appealing in the interview. I’m only 5’10” so I need the rest of my to be proportionate to my height.

Better health leads to fewer trips to the doctor and dentist

When I lived in Mexico City, we would use Coca-Cola to clean the grime off of the tiles in the shower. I have also used Coke and a toothbrush on several occasions to clean leaked battery acid off my car battery. If I can use soda to clean battery acid, you better believe it is destroying your insides. In fact, you have to drink 70 cans worth of water to clean 1 can of soda and its toxins out of your body.

Deals.com released an infographic at the beginning of the year outlining how much money you can save by controlling your diet. Obesity, or even just being chubby, adds a host of health risks and problems. Most overweight people I know suffer from heart disease, diabetes, respiratory complications, low energy levels, etc.

Also, consuming sodas and other sugary foods will leave you in the dentist’s chair more often.

Watching TV makes you fat

Another fascinating statistic from the Deals.com infographic is that for every two additional hours of TV watching, you are 23% more likely to be obese, which makes sense. If you are sitting, then you aren’t moving around and you are probably munching on snack foods loaded with preservatives and carbohydrates.

What if you turned off the TV? Or even threw it out? We sold our TV two years ago this Fall and we love it. We have no cable bill (cha-ching!), we spend more time working on side income (cha-ching!), we are more active and healthy (cha-ching!). You may call us radical, but I call us happy.

Eat better, be healthy and save money

Basically, that’s all I’m trying to say.  I agree that life is too short to miss out on. But a life of medical bills, missed income (think fewer vacations), and being a walking TV guide is not much of a life. So resolve to eat better, get some exercise and save money in the process.

What are your thoughts? Agree or disagree?

Posted in Saving Money, FeaturedComments (7)

Use Groupon and reap the benefits of social group buying

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Use Groupon and reap the benefits of social group buying


For the uninitiated, Groupon, along with a host of other recent start-ups, offers fantastic deals on local fare, services, accommodations, etc. All you have to do is sign-up for the daily emails or download the app. You will then receive daily deals in your inbox or on your phone.

Basically, each deal is at least 50% off. They are able to secure that price through the power of group buying. So many people have to buy the deal in order for it to be valid or offered. Once that threshold is met, everyone receives a fantastic deal!

To try to convince you to stop overspending and save money, I’ll outline just how much I saved recently.

How I saved $148 celebrating my wife’s birthday

My wife and my mother share the same birthday. No man should have to endure such a trial. The first year that we were married, we ended up celebrating my mother’s birthday on said day. Obviously, my wife wasn’t too keen on the idea. So I created a national holiday in her honor that we celebrated the next day.

National Erina Day, my wife’s birthday celebration, has grown each year since then. Friends and family no longer wish her a Happy Birthday. Rather, they all wish her a Happy National Erina Day. Due to a number of circumstances, we ended up celebrating National Erina day a month and a half late this year. I’m kind of a failure at life.

Knowing that I had to make the day memorable, I searched for just the right activity, gift, etc. The problem was that I had a very limited budget. Enter group buying power. I subscribe to both Groupon and LivingSocial.

Social BuyingAnniversary Inn – LivingSocial

We stayed at Anniversary Inn our wedding night and haven’t been back since. So I was ecstatic to see a great deal show up in my inbox.

Normal Price – $199

Paid – $69 + $25 upgrade = $94

Total Savings – $105

Wabi Sabi Sushi – LivingSocial

We love sushi and are always looking for a new place to go. So again, I was happy to see a deal on a new sushi joint not far from where we were headed that evening.

Normal Price – $30

Paid – $15

Total Savings – $15

DF Dance Studio – Groupon

With our special evenings, I try to do something new or different from the usual. We can always do dinner and a movie, but birthdays deserve something better. So I treated us to dancing lessons. Please promise not to tell the guys at the shooting range that I went salsa dancing. I just can’t take that much ridicule or laughter.

Normal Price – $56

Paid – $28

Total Savings – $28

So instead of spending $285, I spent $137! And all I had to do was subscribe to a couple of emails.

Where to find more information on group buying

The most well-known daily deals site is Groupon. Google recently tried to buy them for $6 billion and they said, “Yeah right! We are worth like a bajillion dollars.” FYI, watch for that IPO in the coming months.

I also mentioned LivingSocial, which is a large competitor to Groupon.

Wanting to cash in on all the fun, Google Offers will be available sometime in the next several months. This service is meant to complement Google Places, but will still offer some great discounts. You can read more about it and get some screenshots over at Mashable.com.

Local.com just debuted a new social buying business unit. You’ll be able to search for coupons in your area. As it just launched, you may not find much in your area just yet.

Your local newspaper or news site. Many local newspapers and news sites are launching their own version of daily deals. So visit your favorite local news source and see what they have to offer.

And of course, you can always just search “daily deals” using your favorite search engine.

Do you have a great story or example of saving money through Groupon or a like service? Please share below.

Posted in Saving Money, FeaturedComments (1)

Rabbit Funds: The Best of 2010 and What it Says About Readers

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Rabbit Funds: The Best of 2010 and What it Says About Readers


As we begin 2011, I find myself still reflecting on 2010 and what I’ve accomplished. Seth Godin recommends making a list of what we’ve “shipped” or completed this year. As part of my reflection, I’ve analyzed the traffic to Rabbit Funds to see what you, the reader, like.

Rabbit Funds LogoFirst, thank you. Without you and your readership, this site would not exist.

As I looked at the stats, I was a little surprised to be honest. Some posts that I took great pride in faired okay while other posts that I thought were average were really well received. Apparently, my crystal ball is broken.

I thought you might like to see some of the stats. So I’ve outlined below the 10 Most Viewed Posts and the 3 Most Commented Posts and added some thoughts from me about the stats indicate about readers. Let me know what you think in the comments.

The Top 10 Most Viewed Posts

  1. Money Hacks Carnival #104: Have you ever? – A lot of traffic actually comes from searches for Jack Nicholson as the Joker, which was featured in this post. I should therefore devote more time to celebrity gossip ;)
  2. 3 Reasons Dave Ramsey is wrong about Credit Cards – Not everyone thinks that every word that drips from Dave’s mouth is manna from heaven.
  3. 49 Expenses that are not emergencies – People like lists.
  4. 6 More ways to stop overspending and save money – With tough economic times, you are looking to change or improve your financial situation. Keep it up!
  5. REVIEW: Mint.com and the new Goals feature – If you are still looking for reviews on Mint.com, then stop it and sign-up today.
  6. HOW TO: Dejunk your home, sell stuff, and be happier – Wanting extra cash, you are looking for tips/advice on selling stuff in your home.
  7. Why Hubspot fails at social marketing –  Ranting and raving usually seems to get some attention.
  8. Dave Ramsey said to sell my stuff and payoff debt – Some more Dave love.
  9. 5 Ways too stop overspending – Debt isn’t fun and you are looking for ways to rid yourself of spending habits.
  10. INTERVIEW: Seth Risenmay, Founder of MoneyDesktop.com –  You are looking for and researching budgeting tools. Yeah!

The Top 3 Most Commented Posts

  1. Money Hacks Carnival #104: Have you ever? – Most of the comments are from other bloggers. So this post almost doesn’t count. But it does show that finance bloggers are grateful.
  2. 3 Reasons Dave Ramsey is wrong about Credit Cards – Again, it seems that folks want to have their say if it’s a controversial topic.
  3. 6 More ways to stop overspending and save money – It’s interesting that the top commented posts are also three of the most visited posts. I’m happy to see that you are looking at and engaging in discussions about saving money.

The Coming Year

Thank you again for helping to make 2010 a great year for Rabbit Funds and the personal finance community in general. As for 2011, I will work hard to continue providing great content and look forward to interacting with you. As always, your comments, suggestions, and feedback are always welcome.

To stay up-to-date with the coming posts about saving money, budgeting, and financial planning in general, subscribe to the Rabbit Funds RSS Feed or Follow us on Twitter. Good luck and good investing!

P.S. Rabbit Funds was recently selected as an Editor’s Pick in the 288th Carnival of Personal Finance hosted at  DollarMatters.com. If you are looking for some great articles to read, then go check out the line-up.

Posted in Weekly RecapComments (0)

Why eating out gives us buyer’s remorse

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Why eating out gives us buyer’s remorse


Why do we feel the need to eat out?

I mean really. Of course there are the advantages like no preparation or clean up. But is it worth the extra expense?

For example. I called my wife about 5:30PM yesterday to let her know that I’d be coming home from work in about 30 minutes. She then mentioned that we didn’t have a meal readily available in-house and that she wanted to take her younger sister who’s staying with us out for a meal. Being in a good mood, I said, “No problem. You girls decide where you want to go and I’ll be home shortly.”

Red Lobster

Due to health conditions, my sister-in-law has a very strict diet that excludes many types of food. So they decided on seafood and off to Red Lobster we went. Since crabfest is going on, my wife and I both ordered a pound of succulent snow crab with about a dozen shrimp scampi. The food was enjoyable. My 10 month old loved the crab.

But then the bill came. Seventy-three dollars later, I’m sitting there thinking, “Why did we do this?” The effects of cognitive dissonance were beginning to set in.

Cognitive disso-what?!

Better known as “buyer’s remorse”, cognitive dissonance is what we experience when our actions don’t fall in line with our beliefs. Our brain raises a red flag saying, “Why are you doing this? This action goes against what we believe about the world or ourself.”

And yet, we as consumers are so well trained to ignore that mental alarm and act in contrary to our beliefs and desires. I believe that fundamental to the issue is the habit of instant gratification that has been nurtured by the “me” or “now” generation. Our grandparents, the people who survived the Great Depression, are skilled ninjas in the art of waiting. And yet, that crucial skill seems lost on many Americans.

What are your beliefs about spending, budgeting, and frugality?

I propose a simple, yet potentially life changing exercise. Sit down this afternoon with a pad of paper and answer three questions.

  1. What did your parents teach you about money?
  2. How do you currently view money and its affects on your lifestyle, goals and dreams?
  3. What actions, such as eating out, are currently in contrast to your views?

From this simple task, you may discover that your attitudes are what they should be. Or that your behavior does not reflect your beliefs. Also, you may discover the root of the issue – your childhood (said slow and deep).

So how bad is eating out and what can you do to change your habits?

Here’s what a few of my colleagues have to say on the topic:

Lunch Savings Calculator provided by Mortgage-calc.com allows you to input what you’d spend making a homemade lunch versus eating out, for how many years, and the investment rate you could yield with the savings.

Saving Money Not Eating Out by Me Financially Free outlines how he estimates an annual savings of $2,340 by not eating out for lunch.

How Much Money Can You Save by NOT Eating Out over at OutOfYourRut.com not only addresses the potential savings, but gives you eight suggestions for spicing things up in the kitchen.

Save Money by Not Eating Out for an Entire Month presented by Les O’dell at Good Financial Cents talks about some of the non-financial benefits in addition to the financial benefits from not eating out.

What tricks or tips have you used to avoid eating out? For more information and commentary, fan us on Facebook!

Posted in Saving Money, FeaturedComments (5)

Freedom Week: Financial Emancipation Proclamation

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Freedom Week: Financial Emancipation Proclamation


To celebrate the birth of our nation and the freedoms that we are afforded, I am writing three posts this week with a twist. Each post is based on an influential document which has given us rights.

So far this week, I have posted the Financial Declaration of Independence and Financial Bill of Rights. Today’s post, adapted from President Lincoln’s declaration which challenged slavery head-on, is the Financial Emancipation Proclamation. Without further ado:

Financial Emancipation Proclamation

Financial Emancipation Proclamation

On this second day of July, in the year of our Lord two thousand and ten, all persons held as slaves within any State of Debt or living without the benefit of a Budget shall now be in rebellion against Credit Cards, Living Paycheck to Paycheck, and Overspending, and shall be now and henceforward, and forever frugal; and the people of the Unites States, banded together, will recognize and maintain our own freedom, and will do no act or acts to enslave ourselves, regardless of marketing schemes and any efforts creditors and stores may make to entice us to empty our wallets and bank accounts.

That the people will, on this second day of July, by proclamation, designate the debts, if any, in which we the people shall use the Debt Snowball Method to speedily eliminate said debts; and heeding the call by Dave Ramsey, and other financial experts, shall on this day cut, melt, or in other words destroy by any means the credit cards by which we have amassed the greatest consumer debt on record; in the absence of credit cards, we will institute budgets based on our available cash, after fair taxes, charitable donations, and savings contributions, that will allow us to control overspending and live without fear of eminent bankruptcy.

Now, therefore we, the People of the United States, by virtue of the power vested in us as citizens of a free nation and granted by Nature’s God, do, on this second day of July, in the year of our Lord two thousand and ten, and in accordance with our money saving purposes do publicly proclaim, from this day forward, to commit to solemnly live by, resulting in peace of mind and financial independence, the following, to wit:

Refined Budgets, Sound Cash Management, Adequate Life Insurance, Sufficient Auto and Home Insurance, Debt Avoidance, Frugality, Bargain Hunting, Retirement Account Funding, College Savings, Stock Speculation Avoidance, Affordable Home Owning, Index Mutual Funds, Estate Planning, and Tax Planning.

Signed this 30th day of June, 2010,

Adam Williams and the Rabbit Funds team

Sign the Financial Emancipation Proclamation by leaving a comment in the comments section below and follow Rabbit Funds on Facebook for more great financial planning info.

Posted in Debt, FeaturedComments (0)

6 More ways to stop overspending and save money

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6 More ways to stop overspending and save money


Last summer, I wrote a post titled, “Stop lying, 5 ways to stop overspending.” It has been one of my most popular posts. So I’ve decided to revisit the topic and expand the list.

Big SpenderSo here are 6 more suggestions to help stop you from overspending from some of the top financial planning bloggers on the web.

#1 Get rid of disposable money

Financial Samurai say, “The very best way to stop overspending is to “go broke” by always flushing absolutely all disposable income after expenses out of your checking account and into a different bank.  The money must be flushed out in the first several days once the money is deposited, preferably automatically.  Clearly you must figure out your expenses beforehand.  Once you do, and go broke every paycheck, you’ll be controlling your spending and saving in no time!”

#2 Challenge yourself to reduce spending in specific areas

Sit down with your spouse and list the top three categories where you overspend. Then create a list of ideas on how you can reduce spending. For example, if you find yourself dining out too often, then create a list of inexpensive or free date night activities (e.g. picnic at the park and a free museum). Over the next month, work on changing your habits in those three areas. The next month, rinse and repeat.

#3 Surround yourself with frugal-minded people

Phil at PTMoney.com suggests, “Surround yourself with frugal-minded people. It’s easy to avoid having to keep up with the Joneses if you aren’t spending your time with them. Hang out with people who inspire you to be efficient with your money, and who know you don’t need to spend a ton to have a good time. It also doesn’t hurt to have a thrifty spouse. I’m lucky in that my wife is much cheaper than I am. She motivates me to spend less. My advice to the single people out there is to look for a spouse who knows how to spend wisely.”

#4 Go to bed already and stop buying stuff

Besides getting more sleep, you’ll avoid wasting electricity watching TV and you’ll avoid falling into infomercial traps. I sometimes can’t believe what they are selling on TV, but someone is buying. I can’t count how many times I’ve never called and ordered Ronco knives. Fortunately, I always realize at the last second that the knives I have work just fine.

#5 Two words: Duct tape

Len Penzo just posted a list of 4 Ways duct tape can fix your Personal Finances. Here’s an excerpt to make you salivate, “Believe it or not for the past ten years Duck Brand duct tape has held an annual contest known as Stuck at the Prom where they give away college scholarships to high school prom couples who are judged to have created the best prom attire made entirely of duct tape.  I’m not kidding.”

#6 Put a picture in your wallet over your debit or credit card

I sold security systems the summer before I married my sweetheart. To help push everyone through the last two months of the summer, we all listed how much we wanted to earn by the end of the summer and what we wanted to do or buy with that money. The next day, our manager’s wife had printed out our names, how much we wanted to earn, and a picture of our reward. We saw those images everyday before we began knocking doors.

Try putting a picture of what you are saving for in your wallet so each time you go to spend money, you have an image staring you in the face as a reminder to put your wallet or purse away and go home.

Conclusion: Try something

Each of the suggestions above has the potential to help you stop overspending. But none of them will work unless you try something. Don’t worry about getting it all right immediately. So pick a method from above and go at it with all the energy you can muster.

Also, let others know what has or hasn’t worked for you in the comments below. Thanks!

Posted in Saving Money, FeaturedComments (12)

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)

Are you taking advantage of free shipping this Christmas season?

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Are you taking advantage of free shipping this Christmas season?


A recent article in MediaPost Publications outlined that more marketers have been offering free shipping this holiday season as compared to last year. More and more consumers found themselves enticed with free shipping versus discounted pricing.

Online-ShoppingI personally love free shipping. I feel like I am receiving a great deal. In fact, I almost expect free shipping when shopping online anymore. But is free shipping really that great of a deal?

Free Shipping vs. Discounted Prices

Some of my favorite sites like Amazon.comand SwimOutlet.com offer free shipping once you reach a price threshold. I recall one occasion when my wife and I found an extra floaty toy on SwimOutlet.com in order to reach the$75 threshold for free shipping. We have yet to open the floaty toy.

Discounts, on the other hand, can be specific to an item/purchase or a price threshold. I recently purchased several gift baskets to send to clients on WineCountryGiftBaskets.com. The baskets that I purchased were on sale and did not require that I spend any additional money.

Are you spending more because of free shipping?

You are according to the same MediaPost article. Marketing intelligence firm ComScore reports that “the average order value” for offers including free shipping increases by “about 15%” as consumers feel that they are saving money. This statistical very similar to reports from Dave Ramsey that consumers spend on average 12-18% more when using a credit card. So I have to wonder if these two statistics are correlated at all.

For example, Suzy Q is shopping Amazon.com this season and finds that Amazon offers free shipping on many orders over $25. But, her basket total is only $20. So what does she do? She buys another book like any other red blooded American. And better yet, she knows that the extra $5 isn’t a problem since she won’t receive the credit card bill until January.

In this example, Suzy Q appears to have increased her order by 25%! But did she really? I created a basket of goods on Amazon.com totaling $20.27. With shipping, the total came to $25.25. Therefore, by increasing her order size and receiving free shipping, Suzy Q received more goods or value without increasing her spend (unless you count the $0.25).

Conclusion: Don’t spend more just to earn the reward

Do a few calculations. Verify that spending the extra money to earn a discount or promo, such as free shipping, saves you money or breaks even with the non-discounted price as was the case with my Amazon.com purchase.

Posted in Saving Money, FeaturedComments (4)

The Modern Marketing Machine: 6 reasons it’s Us vs. Them and how to win

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The Modern Marketing Machine: 6 reasons it’s Us vs. Them and how to win


I like marketing. I market my website. I market myself to potential employers. I marketed myself to my wife and she fortunately bought. I believe marketing helps us gain knowledge of products, services, and opportunities that we might not have otherwise known about.

Retro TV Commercial I believe marketers spend everyday trying to open our heads and rewire us to buy their stuff. I’m not cynical and I don’t think they are evil or bad people. However, as consumers we need to understand that they want our money and that it is Us vs. Them. My six reasons.

1) Discount pricing is a marketing ploy

I spent some time working at a major, national retailer. I’m not interested in pointing fingers, so let’s just call it Brand X. While working at Brand X, I was involved in many pricing conversations and observed the pricing process. We all know that stores use discount pricing as a means to incentivize you to buy now. I didn’t understand how deep that really runs though. For example, if a shirt or sweater costs the company $10 and they know from historical reports that consumers typically will only buy it at a price of $20, then they price it at $40. That way, they can discount it at 50% (oh my gosh! oh my gosh! oh my gosh!) and it will sell at the expected price of $20. Meaning, they don’t even expect you to pay $40! If you do buy it at $40, then you just lost. If you purchase at $20, not because you need the item but because you can’t pass up that great price, then you just lost.

2) They make us ask permission to buy from them

I’m borrowing this reason from Dave Ramsey and don’t take the credit myself. Banks, car dealerships, etc need us to buy from them in order for them to make money. And yet, we find ourselves asking them, and almost pleading at times, to take our business. They tell us that we’ve been “approved” so that we feel part of the club. “Honey, great news! The bank approved of us.” They put on a great dog and pony show to make us anxious that we might not get the “deal.” Stop and realize what is really being sold. Often, what’s being sold is enslaving amounts of debt. Liabilities, like cars, that masquerade as assets don’t make you happy. Money in the bank and peace of mind make you happy. Walk away next time someone tries to get you to say, “Please, can I have your stuff? Please, can I buy some debt?”

3) Research, research, research

Marketers spend a considerable amount of time learning their trade and then studying consumers’ behavior. Any good professional would. They track and analyze your buying and browsing behaviors, study psychology, and attempt to gain an intimate understanding of you. This is a double-edged sword. For example, Zappos.com is very customer centric. They are almost obsessively customer centric. They use an intimate knowledge of customers to better meet customers’ needs. But at the same time, these marketing departments use this knowledge to optimize the entire buying process to get you to buy. So what am I saying? Simply that marketers are constantly gaining new information about us and using that information to create extremely enticing advertisements. Just to put this effort into perspective, advertisers are expected to spend $242 BILLION on ads in 2009 alone. They have to recoup that investment and they expect to have us, the consumers, foot the bill. Don’t buy just because of the shiny ad.

4) They use fancy or technical names that confuse the issue

As the title suggests, a rowing machine is now a “1205 Precision Rower,” which sounds much cooler. Another example is the 12b-1 fee charged by some mutual fund companies. Rule 12b-1 was adopted by the Securities and Exchange Commission (SEC) in 1980 and allows fund companies to pay for sales and marketing activities by charging you a fee. This is in addition to the normal or stated expense ratio. It bothers me that fund companies charge consumers a marketing fee but don’t call it that. I understand that the name is derived from the SEC rule, but it is misleading to novice investors who are just starting out. Just call it a marketing fee so we can decide if we want to pay it.

5) “Where’s the pain?”

Target Prescription BottlesAnother double-edged sword. A good marketer asks and answers the question, “Where’s the pain?” If a marketer can understand the problem a consumer faces, then he or she can develop a campaign or product that addresses that problem. Target pharmacy bottles are an excellent example of a marketer adding value to a product. Several years ago, Target redesigned its pharmacy bottle to make it easier to open, identify the prescription, and know to which family member the prescription belongs using color coded cap rings. The added convenience is worthwhile. On the other end of the spectrum, think about all of those late night infomercials. They offer solutions to common problems via their products. But stop and think to yourself, “Yes the Magic Bullet makes life a little easier for me, but my blender works just fine. So I don’t really need it even though it is newer, nicer, faster, etc.” In other words, they may be offering something that solves a problem, but you just may not really need the problem solved (at least not at the expense of your retirement). So next time you go to buy a product that you really don’t need, decide to put the money into your retirement account instead.

6) Illegitimate or illegal marketing schemes

I don’t want to dwell much on this topic since my purpose with this post is to address legitimate marketing efforts. However, there are a lot of marketers of ill repute out there attempting to bypass the law and cause you to lose your money. If you suspect that an offer is too good or just doesn’t seem right, please avoid it. Also, you can check sites such as Scam.com, ScamBusters.org, Snopes.com, or the Better Business Bureau to see if others have reported the offer as a scam.

Conclusion

Let me reiterate an important point – I have nothing against marketers. I know a lot of them. They have families, homes, dogs, and probably some consumer debt themselves. But buyer beware. Every institution, firm, corporation, etc must maintain a healthy revenue stream and that revenue has to come from someone. See it as a game. You are allotted X number of dollars each month to support yourself and your lifestyle. Marketers setup storefronts where you can choose to spend your dollars. At the end of the game, the person or store with the most dollars wins. The more you keep to yourself, the greater your odds are of winning.

Let me know in the comments if you agree or disagree.

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