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This article is by staff writer Adam Baker. Baker is a founding member of, a new multi-author blog focusing on personal finance, entrepreneurship, and life design for people in their 20’s and 30’s.
Americans have been fairly resistant to the introduction of a coin form of our dollar currency. We have them in circulation, of course: The Presidential Series and the Sacagawea gold
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coins are both currently being minted. You can also occasionally bump into a Susan B. Anthony silver dollar or, if you’re really lucky, an Eisenhower Dollar. (For some reason, it seems like this rare sighting almost always occurs in small-town gas stations and grocery stores. Don’t ask me why.)
Despite several attempts to introduce a popular dollar coin, the dollar bill continues to enjoy its position as the dominant $1 currency.
Since traveling overseas, I’ve realized the story is a little different elsewhere. Both New Zealand and Australia have not only $1 coins, but $2 coins as well. And the dollar bill? Well it’s non-existent. The smallest paper note is the $5 bill.
Coins are just dying to be spent
At first, the difference seemed negligible. Who cares if it’s a coin, a paper bill, or a credit card?  Ignoring exchange rates, a dollar should be spent the same regardless of material, right?
Sounds good in theory (at least in my head), but after several months of purchasing tram tickets, bottles of water, and Mrs Higgins cookies with small bills and coins, I noticed a difference. Magically, it seemed like I had a much easier time spending a handful of coins than I did a small wad of bills.
In the States, Courtney and I generally ignored change altogether. In fact, when we had something like a $3.79 charge, we’d simply record it as $4 spent to help simplify our tracking. This meant that in rare cases where we paid for a small purchase with only pocket change, we usually didn’t track it at all.
However, we found the system we’d grown accustomed to in the States was a little more expensive to operate overseas. A small handful of change could easily be six or seven bucks!
Ditching the penny once and for all
The Australian and New Zealand currencies are also void of any pennies (although the New Zealand ten-cent piece looks like a penny). Electronic payments, including credit and debit, and still processed down to the penny in most cases; however, when paying in cash, they round the transaction to the nearest $.05 (or $.10 in New Zealand).
It wasn’t until experiencing a penniless system that I realized how pointless (and annoying) the one-cent coin can be. Ironically, a 2008 New Yorker article points out that “primarily because zinc…has soared in value, producing a penny now costs about 1.7 cents.” Yikes!
You don’t have to travel across an ocean to realize that fighting to keep the penny in circulation is a losing battle. And in my opinion, the widely-popular dollar bill won’t outlast the penny very long at all.
And you know awhat? Although Courtney and I found ourselves much more willing to splurge with the increased coinage, I still favor the system from a  usability standpoint. The question left to ask is:
Why are we fighting so hard to resist this change?
It seems like a logical shift. I don’t get it! Are you ready to ditch the dollar bill and the penny?
Sacagawea coin photo by flower beauty.
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This post comes from partner blog The Dough Roller.
A co-worker recently sent me an article written by Helaine Olen entitled, "The end of personal finance -- Decades of advice turn out to be so much garbage." Published at Slate's
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The article begins with Olen recounting how, in 1997, a financial adviser she was working with to write a financial-makeover feature dismissed the notion that gold was a good investment. Gold was trading at $300 an ounce and now trades at about $900. As a result, she views her decision to leave gold off the table as a mistake. (It wasn't, but we'll come back to that in a moment.)
Olen than proceeds to argue that personal finance is, or at least should be, dead. She attacks stocks and the "efficacy" of the market because it was down 40% last year. She describes the personal-finance industry as a "self-help complex," and argues that the idea that people can manage their money on their own is a lie because prolonged unemployment can burn through six months of emergency savings.
Olen then quotes Nan Mooney, author of "(Not) Keeping Up With Our Parents: The Decline of the Professional Middle Class," as saying that "personal finance has come to substitute for the role government should play for people." Substitute the word "neighbor" for the word "government" in that sentence, and its absurdity stands out like a fart in church.
And then the article turns really dark:

Which leads to another question: What's next for personal finance? The past two years have demonstrated over and over again that bad things can happen to good savers and investors. Very few of us have the wherewithal to fund both retirement savings and a large enough emergency fund to sustain us through a bout of unemployment lasting, say, more than a year. No one, it turns out, really knows what an individual stock, mutual fund, or commodity like oil or precious resource like gold will be worth in six months, never mind six years.
Nonetheless, personal finance is unlikely to crawl away and die anytime soon for a simple reason: We think we need it. "We're kind of screwed but we don't have a choice but to take care of ourselves because no one else is helping," admits MSN's personal-finance columnist, Liz Weston.
And then Olen asks for an apology from personal-finance gurus (think Suze Orman or Dave Ramsey, but presumably not Liz):

Me, I'd settle for a few mea culpas from our finance gurus. After all, I am aware I owe my gold-loving dude an apology. Unfortunately, I know the planner assigned to the case won't be eating crow any time soon. I recently received a copy of his latest book in the mail. It's all about how if you can just identify your money archetype, financial success will be yours. Oh, and one other thing. The press release quotes him as advising, "Don't rush out to buy gold."
Here's a summary of Olen's article:

  • Personal-finance gurus advised us to eschew consumer debt, save an emergency fund, and invest in a diversified portfolio of low-cost mutual funds.

  • Americans followed this advice.

  • The advice was obviously wrong because over the last year or so the market is down, real estate is down, and unemployment is up.

  • Personal-finance gurus owe us an apology for the awful advice they gave us.

  • The government should step in and take care of us, because we are not capable of managing our own affairs.

Olen's article demands a response.
Gold is a crappy investment
Olen, you don't owe your "gold-loving dude" an apology. While it's easy to be swayed by the here and now, particularly when it comes to investing, the price of gold today does not make it a good investment. You've chosen to compare the price of gold in 2009 to its price in 1997. Why not pick 1980 when it was hovering at more than $600, which in inflation-adjusted terms exceeds the $900 price tag today. Remember, in hindsight we can pick dates to make any investment look good, even Enron.
And if you don't believe me, here is what Warren Buffett had to say about gold in 1998:

It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.
Will the price of gold enjoy a resurgence when investors are scared away from everything else? Sure. Does that make gold a good, long-term investment? Nope.
Personal finance is not God
In one sense, Olen's article hits on an important point. We shouldn't put our faith in money or personal finance. No amount of emergency fund can shield us from financial calamity with absolute certainty. A prolonged bout of unemployment will wreck just about everybody's finances. Add to that the falling stock market and housing market, and a lot of people are in real financial pain right now.
But just because sound money management is not a guarantee that life will go our way, does that mean it has no value and we should throw it away? If that's the standard, government would have been gone a long time ago.
Let's get real
Reading the article, one gets the sense that most Americans suffering financially had followed the advice of the personal-finance gurus Olen believes should apologize. But surely that's not true. Do most Americans have a six-month emergency fund and no consumer debt? How many followed Dave Ramsey's advice to buy a home only when they have a down payment of 20% or more, and can afford a 15-year fixed-rate mortgage that keeps monthly payments to 25% or less of monthly take-home pay?
There are undoubtedly examples of folks who did follow this advice, and are still suffering financially. But does that describe most of us? All the studies I've ever read say the answer is no. Americans are mired in consumer debt, studies show we overspend, and the recent housing bubble (fueled by the government) demonstrates our willingness to pay just about anything for a house in a hot market.
And it's here that we need to be honest with ourselves. We need to take an honest look at our finances and our money decisions. It may make some feel better to blame others, particularly personal-finance gurus, but is that the honest answer to the financial difficulties most of us now face?
Olen writes:

That our personal finances weren't fully ours to seize didn't seem to occur to many of us until recently, when the stock market plunged almost 40% in a mere year, housing went into free fall, and the unemployment rate began to climb perilously toward double digits.
But what exactly does this mean? If the point is that circumstances outside our control can affect our finances, certainly that's true. It's also true that when times are good, people tend to forget that it won't last forever. The same is true when times are bad.
The stock market is efficacious
Olen clearly views the market as defective because it lost 40% last year. And she writes, "No one, it turns out, really knows what an individual stock, mutual fund, or commodity like oil or precious resource like gold will be worth in six months, never mind six years."
It's the subtle phrase, "it turns out," that makes that sentence. Those three words suggest that until last year, everybody believed they could predict the market six months or six years from now. Really? Who?
Every good investing book I've ever read says the exact opposite. We can't predict the future price of the markets, and we shouldn't try. That's not a problem with the market, it's a reality of life. And by the way, you can't predict the future price of gold, either.
But what we can predict with reasonable assurance is that over a lifetime of investing, investors will enjoy really good years and really bad years. In that context, last year's 40% decline should not come as a shock or surprise to buy-and-hold long-term investors. Neither should the 35% gain we've enjoyed since March. That doesn't make last year any fun, but it should help us understand that the "problem," if there really is one, is not the market. If we don't come to that realization, we shouldn't have been in the market in the first place.
The choice is yours
Each of us has a choice to make. We can throw up our hands in frustration and give up. We can blame Wall Street, the government, or even personal-finance gurus if we want. But doing so won't improve our lives.
Or we can learn from the past year, and day by day make the best personal-finance decisions we can. Does this guarantee financial security? Of course not. And personal finance has never promised such a guarantee. But the fact is that we can, by and large, control our financial destiny.
Suze Orman has described the current recession as "the greatest thing that has ever happened to youth. It gave you a wakeup call that your parents were living in financial la-la land." She's right about that. It's given us all a wakeup call. And we shouldn't hit the snooze button.
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This guest post from Caitlin of ClutterCubed (a blog about ridding clutter from your life) is part of a new feature here at Get Rich Slowly. Every Sunday will include a reader story (in the new “reader stories” category). Some will be general “how I did X” stories, and others will be examples of how a GRS reader achieved financial success.
Back in September, one hour of my time cut 16 years off my mortgage! It was one of the easiest things I’ve ever done, but I can honestly (and sadly!)
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say I probably wouldn’t have done it if it weren’t for Get Rich Slowly.
However, this is less of a tale of ringing triumph, and more of a story that shows how financially clueless I was, while you all point and laugh how even people who make financial missteps can put themselves back on the right track.
My shiny new mortgage
In mid-2008, my husband and I bought a shiny new house and acquired a shiny new 40-year mortgage. That’s right: a 40-year mortgage. It’s embarrassing to admit now, but the banks we talked to assured us that 40 years was “the new normal” for first-time home buyers like ourselves.
This was, of course, right before the crash and the economic downturn, so at the time our 5.5% mortgage rate looked pretty spiffy. As first-time buyers, we could have gotten away with a 0% down payment, but over the years we’d saved enough for a 7% down payment (thanks in part to a small inheritance my husband received). We felt smart. We felt like we were doing the right thing, like we were ahead of the game.
Unfortunately, as we later learned, there’s a big difference between feeling like you’re ahead, and actually being ahead. We didn’t know about the trick of planning mortgage payments before you have to start making them, so we hadn’t been putting away “a mortgage payment” every month prior to moving in. We also had no emergency fund to speak of.
J.D.’s note: Suze Orman calls the game of planning mortgage payments before you have to start making them “playing house before buying a house”. I think it’s an awesome idea: Before you take on a mortgage, spend at least six months setting aside enough to simulate your mortgage. If you can’t do it, you’re not ready to buy.

By the numbers
We had, at least, planned our housing costs so that they wouldn’t be more than 28% of our gross income. I don’t remember where we got that number, since at the time we did not really read any personal finance books or blogs. I think we just pulled 30% out of Google, as a financial rule of thumb, and then aimed for a bit less than that.
Because of little things like that, we thought we were doing great, but looking back there are a lot of things I wish we had done differently. (I wish I’d started learning about personal finance before buying a house, for one thing!)
Properly taxes were included in our mortgage payments, and they’d been over-estimated to avoid needing to make a big payment once our house was reassessed this year (since the last time it had been assessed was in 2007, when it was still a dirt lot).
This September our mortgage payment came out automatically as usual, but we were really worried when $180 less than normal was taken from the account. I panicked and called the bank, thinking it was perhaps a mistake, and there would somehow be consequences for not making a full payment. The bank assured me everything was okay, and it was just that our property taxes had gone down after a reassessment, so our payment had been adjusted.
A profitable hour
The Old Me would have celebrated having an “extra” $180/month to spend. The New Me, the one that reads Get Rich Slowly and other personal finance blogs and books and is actively trying to improve my financial situation, immediately booked an appointment with the bank. My husband and I agreed that, since we’d been paying our mortgage all year without any problems, we should keep paying the same amount.
At the appointment, we not only bumped our payment back up to what it had been (paying an additional $180 on every payment, or an additional $2160/year), we also switched to a biweekly payment plan, with payments equal to half our monthly payment, so that we would be making an additional full payment (plus an additional $180 on that payment) every year.
In that one hour appointment, we watched our projected mortgage end date shrink down to 23 years. One hour of our time saved us 16 years of payments and interest.
It still boggles my mind.
All it cost us was an hour of our time. Well, an hour of our time and $45 for a one-time payment to make the switch possible. I’m not too thrilled about the $45, but I’m not upset about it, either.
Action beats inaction
I’ve read it dozens of times on PF blogs: overpay your mortgage, make an extra payment each year. Blah, blah, blah. Even seeing the occasional calculated example didn’t really drive it home for me. It always felt like I couldn’t be like “those people” — the ones with enough extra money to do fancy things like prepay a mortgage. I was afraid of screwing up, of doing it wrong. However, like J.D. says, action beats inaction, and in this case, he’s 100% correct!
I say thank you, J.D., for having this blog and inspiring me to get off my butt about my personal finances. Without you, I might not have had the drive to make that appointment with the bank that saved me 16 years. Without your blog and your readers, I may have known intellectually what I should have done, but it would probably have seemed out of reach.
I might have been content with my “found” $180/month. I might have handled it responsibly, and used it to pay off debt at least, but I know I wouldn’t have switched to biweekly payments. It seemed like such a hassle. It seemed like such a pain to set up. It felt like it couldn’t possibly be worth my time and energy to shuffle around my schedule, get my husband home from work early and go talk to the bank. Even though I “knew” it was worth it, I didn’t actually believe it until it happened. It was worth it! I had such an amazing feeling as I left the bank!
Have you had such a big payoff from investing a little bit of your time? Can you beat knocking 16 years off the mortgage in one measly little hour? Let us know in the comments!
Reminder: This is a story from one of your fellow readers. Please be nice. After nearly a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are.
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It’s been a long time since we had an Ask the Readers around here. Time to remedy that situation! Jeff recently wrote with a question about saving. The lucky dog has saved so much that he doesn’t know what to do next!

Two years ago I started getting smart about my finances and in the time since, I’ve been able to put away enough money to max out my Roth IRA. I’m a grad st
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udent on a teaching-assistant income. As such, I don’t have a huge amount of cash lying around after I’ve maxed out the IRA, but I also don’t have a 401(k) — or, in my case, a 403(b) — to put that extra cash into.
So here’s my question: What’s the best thing to do with extra cash once the tax-shelters are maxed out? Just invest in the same type of mutual funds as I already have within my IRA? What if I’ve got a wedding or a house in the not-too-distant future (say, 2-4 years)? Any pointers on this would be greatly appreciated!

Jeff should be congratulated for maxing out his IRA. That’s awesome! Saving that $5,000 a year puts him far ahead of most Americans. In my opinion, he has three options, two of which he mentioned, and one he didn’t. My personal preference is to put things in this order:

  1. Debt reduction. If Jeff is carrying any high-interest debt — and he probably isn’t or he’d have mentioned it — attacking that is probably the best move.

  2. Targeted savings. If Jeff thinks he might be getting married and/or buying a house in the next few years, he could open named accounts at ING Direct (or another online bank) to focus his saving. Interest rates suck right now, but they’re bound to improve in time.

  3. Additional investing. A reasonable argument could be made that the market is in the middle of a bull run, and that it’ll keep climbing for a while. If Jeff thinks this is the case, he might be better off putting his money into a regular investment account.

Thought the stock market is attractive, it’s not nearly as attractive as it was a year ago. Besides, the stock market really isn’t a great place to save for short-term goals. You could argue that it’s been fairly low recently so your chances of seeing a drop are lower, but they’re still there. If you’ll need cash for a wedding or a house in a few years, Jeff should make sure he understands the risk involved before putting short-term money into the market.
If I were in Jeff’s shoes, I’d save the extra market investing for after I’d met my other savings goals. I’d keep maxing out the IRA every year, and put any extra money toward targeted savings. If he does invest, should he stick to his current mutual funds? That really depends on what those are.
What would you do if you were in Jeff’s shoes? Should he be focusing on his short-term goals? Or is he better off opening an investment account? How do you prioritize your saving strategy if you’ve already maxed out your IRA?
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This article is by staff writer Adam Baker. Baker is a founding member of, a new multi-author blog focusing on personal finance, entrepreneurship, and life design for people in their 20’s and 30’s.
Few concepts have had as great an impact on my family’s financial decision-making as learning how to calculate our rea
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l hourly wage. The concept was introduced by (or at least popularized by) the amazing book, Your Money or Your Life. This book has had a dramatic influence over our financial turn-around (just as it did for J.D.).
The authors focus early in the book on ensuring that readers are aware of the true costs associated with their jobs and incomes — including accounting for the time we spend on activities that are often forgotten.
Note: J.D. has written a couple of in-depth articles on the notion of “real hourly wage”. If the idea is new to you, check out How to compute your real hourly wage and Beyond “real hourly wage”: How much time does Stuff actually cost?

When Courtney and I first sat down to figure out just how many different expenses were associated with our income opportunities, it was an eye-opening experience. It unveiled a new layer of consciousness towards both our work and our spending. In one case we shifted from, “I make $42,000 per year” to “That really only results in $22,000 net after all expenses are considered.”
The hardest part of figuring your real hourly wage is accounting for those sneaky costs (in both time and money) that eat away at your income streams. Your Money or Your Life does a great job of listing sample expenses, from which we adapted a customized list that I still keep updated to compare opportunities.
Here are the adjusted categories we use to figure our own real hourly wages:

  • Time - Alright, so this seems like a generic way to kick things off, but stay with me. For each of the other categories on this list we immediately asked ourselves, “What’s the extra time associated with this?” While this isn’t a monetary cost itself, putting Time at the top of our list was a reminder to remember to always take this into consideration.

  • Taxes - Taxes come next on our list because they’re easy to remember. It’s common for people to think of “take-home pay” or “how much after tax” when thinking about income. If you’re an employee in the U.S., this usually means federal, state, and local (in some places) income taxes, as well as social security and medicare. These numbers are easy to find on paystubs.

  • Foundation expenses - This was what Courtney and I called anything that wasn’t complete tangible (as in the later categories), but that was required for our work. Courtney had her teaching license fees, union dues, and education conferences. I had my share of real-estate certifications, union dues, broker fees, and sales training. We also included childcare expenses, and more recent visa fees in this category.

  • Commuting/Transportation - This was the next most tangible category for us to consider. The key is to estimate what percentage of vehicle use is for commuting purposes. You can then apply this to gas, oil, maintenance, insurance, parking, and tolls. Your Money or Your Life also suggests counting traffic tickets, vehicle depreciation, and lease/interest payments. Even if you don’t drive, you’ll likely have some public or alternative transportation costs in here.

  • Tangible work materials - These were usually physical items that we had to buy and maintain. Out of college, I worked in a factory where I had to purchase ear-plugs and safety glasses (although I was given hardhat). Some people have to provide their own tools, office supplies,  or teaching materials. This also includes our fancy cell phones that we justify as “for work,” briefcases, laptops, and other gear/gadgets.

  • Clothing - We broke this into two sub-categories.  First, there are jobs that require uniforms, special shoes, and/or a certain type of specific non-uniform dress (like the Italian restaurant I where I waited tables). On the other hand are the jobs where we buy professional clothes out of a desire to meet a social standard. Think suits and ties, fancy blouses, and trips to the dry cleaners. If you wouldn’t regularly wear it on your days off, it should be included.

  • Grooming - We used this to include products like make-up, fancy cologne, special haircuts, and jewelry/accessories. Again, it’s important to only include that which you don’t use or wear regularly outside work.

  • Food/Drink - This is self-explanatory, but contains eating out, snacks throughout the day, and even food purchased after work hours if it’s because you “had too hard of a day at work” to cook dinner. I noticed a lot of my increase in food costs was from eating out for “business” meetings and every Friday when the whole office would go out together. Work-related coffee habits can wrack up some damage fast, too (trust me I know).

  • Stress - As we began the list, we end it with a general category. The authors of Your Money or Your Life spend a lot of time covering the idea that any time/money that is invested as part of a release, escape, or an unwinding from work should be counted against your income. Some people release through video games or television, while others end up splurging on larger items like spontaneous vacations or larger toys to get away from work. The book even suggests counting increased sick time as a result of stress-related illness!

Look, I know this is a lot to think about. But this exercise isn’t meant to discourage. Just the opposite! Remember, there are usually other benefits to your income, as well. This post only features one side of the coin.
However, figuring your real hourly wage is an awesome tool when trying to compare two income opportunities that aren’t similar to begin with. It may help encourage you to start a part-time business or may simply remind you of just how beneficial your current employment really is.
If you haven’t run your own numbers, I’d strongly recommend it.  It worked wonders for us!
What sneaky expenses have you caught eating away at your income?
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Every January since I started Get Rich Slowly, I’ve done an annual round-up of my discretionary spending. That’s not going to happen this year. The numbers are hopelessly muddled by events that created under-reporting in some categories and over-reporting in others. (Kris and I paid for our 2010 vacations in 2009, for example.)
Rather than sort things out, I want to talk about a couple of my spending habits instead. One is a worrisome trend, and one is a thing I’m doing right.
Food for thought
Long-time readers know that Kris and I love to dine ou
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t. It’s one of those things we’re willing to spend on. We cut corners in other areas of our lives so that we can afford to make this happen. Still, I’ve been concerned about my restaurant spending for the past couple of years. It seems a tad excessive.
How’d I do last year? Well, my grocery spending dropped, but my restaurant spending went up again — a lot. Here’s a look at five years of data:

  • In 2005, we spent $1423.39 to dine out 100 times, for an average cost of $14.23 per meal.

  • In 2006, we spent $1869.58 to dine out 108 times, for an average cost of $17.31 per meal.

  • In 2007, we spent $2051.93 to dine out 84 times, for an average cost of $24.43 per meal.

  • In 2008, we spent $2628.08 to dine out 77 times, for an average cost of $34.14 per meal.

  • In 2009, we spent $3443.61 to dine out 69 times, for an average cost of $49.91 per meal.

Holy cats! Will you look at those numbers? We’re only dining out about half two-thirds as often as we were in 2006, but we’re spending nearly three times as much per meal. At the current rate of spending growth, we’ll be spending $300 per meal in 2015! Since I can afford our current spending — I’m not living beyond my means — the real question is: Am I getting my money’s worth? I’m not sure that I am.
If I’m honest, I have to admit that I don’t like the idea that we’re paying $50 per meal. I’d much rather return to our former habit: Dining out more often, but spending less each time. To that end, I’ve been brainstorming ways we can work to cut costs:

  • We could do a better job of looking for discounts. We have an Entertainment book, and the local paper often features specials at local restaurants. We should take advantage of both of these. We used to do this, but have fallen out of the habit (primarily because we’ve become so used to eating at the same places again and again).

  • We need to find more cheap places to eat. Half the fun of going out is just going out. Sure, we love the fancy restaurants, but we used to be happy with Dairy Queen. (This is lifestyle inflation in action!) The real problem is that the cheap places I know and love (Cha Cha Cha and Imperial Garden) aren’t Kris’ favorites. We need to find cheap places we both like.

  • When we do eat in the same old haunts, we need to make an effort to reduce our spending. It’s okay to have an appetizer, entree, dessert, and drink all in the same meal now and then, but we could save money by cutting one or two of these from the mix each time we dine out.

  • Finally, we should invite friends to our home for dinner more often. As soon as the book is done (getting close!), I’m going to make a habit of inviting one family to dine with us every couple of weeks. We used to do this a lot, but have fallen out of the habit. It’s fun and frugal to have folks over for dinner.

So, that’s one part of my financial life that still needs work. Next, let’s look at something I’m doing right.
Tangent: Portlanders, help me out. What are your favorite cheap places to eat around town? Bonus points for inner southeast, West of 39th from Hawthorne south to Oregon City.

A waning of want
Here’s something that amazes me: We’re twelve days into 2010 and I haven’t spent anything yet on personal expenses. I haven’t even felt the urge. I’ve bought gas for the Mini and groceries for home, and Kris and I went out to lunch last Friday, but I haven’t spent a dime on gadgets or books or games or toys or magazines.
“Big deal,” you might say. “That’s how it should be.” You’re right. But for me, this is a big deal. All my life, I’ve had the uncontrollable urge to buy Stuff. It used to be that I couldn’t go more than a day or two without buying something. Even while writing this blog, that’s been the case. (I’ve just learned to channel my desires into smaller, cheaper things.) Now, as last, I seem to have licked it.
I still want things — no question! — but I’ve become very good at ignoring the wants and moving on. How?

  • Sometimes, I just put down the thing I want, turn off my brain, and walk away. I force myself to stop thinking about it. (Usually by thinking about something else — like our upcoming trip to Europe, and how I need to save for that instead.)

  • If I still want the thing when I get home, I put it on my Amazon wish-list. For whatever reason, that’s often enough to satisfy the strange inner workings of my mind. I feel comforted knowing I’ve let myself put it on a list where I won’t forget it.

  • I’m very good about using the 30-day rule to control my impulse spending. My Amazon wish-list plays a role in that, but so does my mountain of index cards. (My life wouldn’t be complete without index cards.) I have a handful of cards on my desk filled with notes about the things I want. It’s amazing how many times I sort through this stack and end up throwing cards away because I no longer want the item I’ve written down.

These techniques help me deal with desire. They don’t quell it completely — nor would I want them to — but they do keep it in check. That last rule is probably the most effective. By delaying purchases 30 days, I don’t feel like I’m denying myself. I can still buy what I want if I want it 30 days later, but I’m not just giving in to impulse spending. (When 30 days rolls around and I do still want something, it actually feels pretty good to be able to buy it.)
My current spending moratorium isn’t permanent, and I know that. In fact, the new Dick Tracy anthology comes out tomorrow, so if nothing else, I’ll be shelling over $25 for that.
Remember: there’s nothing inherently wrong with spending money on things that bring you joy. Problems arise when you finance these purchases with debt. If you’re meeting your other financial goals and have money left over, it’s good to indulge your interests and passions. Just make sure you’re getting value for the dollars you spend.
Here are the past installments in this series:

How did you do on your spending goals last year? Are there areas where you wish you spent less? If so, what strategies do you use to keep yourself in check?
---Related Articles at Get Rich Slowly:

This is a guest post from Adam Jusko, founder of, an information and comparison site for credit cards that maintains a list of over 1200 cards. You can follow Adam on Twitter for quick credit tips and opinions. I’ve mentioned Index Credit Cards many times before, most notably in my post from 2006 called “The Only Credit Card Guide You’ll Ever Need”
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Last May President Obama signed into law a sweeping set of rules and regulations concerning the business practices of credit card issuers. Known as the Credit Card Act, the new laws promised a level playing field where consumers would be treated more fairly and credit card terms would be easier to understand.
But, much like your favorite credit card agreement, the law had something nasty buried in the fine print — no part of the law would take effect immediately. Instead, certain pieces of the law didn’t take effect until August, and many others have an effective date of February 2010. Credit card issuers used the window between the law’s signing and its actual enforcement to raise rates, slash credit limits, or even completely take your card away.
Card issuers claim the new rules restrict their ability to price cards based on risk, and will lead to higher prices for everyone. Politicians might call the card issuers’ reactions to the new law “unintended consequences,” and tell you that leveling the playing field unfortunately means that some people get leveled on the way toward a fairer marketplace. (Actually, no politician would ever say that.)
What’s the truth? What exactly do these new laws do? And, what can you expect in the coming years when you use your credit cards or attempt to get new ones?
Let’s start with what the law actually says. It’s long, so I’ll bullet point it as much as possible. (Go here if you want to read it in all its glory.)
Now playing
Here’s what went into effect in August of 2009:

  • Credit card issuers must give you 45 days notice if they intend to raise your rates. Further, they must allow you to “opt out” of the rate increase and pay your existing balance under the old rate terms.

  • Credit card issuers must send bills at least 21 days before the due date.

What it means: Credit card issuers can no longer jack up your rates with little warning, and you now have the option to decline the rate increase. However, declining an increase means you can no longer use the card and it gives the issuer the freedom to increase your minimum payment to either twice its previous level or to a level that guarantees the card will be paid off within five years. So, if you decline, be sure you have a better card option going forward.
Coming soon
Next up are the regulations due to kick in next month. I’ll take them in chunks, based on rules that naturally go together:

  • Credit card rates can’t be increased on outstanding balances — except for the increase that happens when a 0% or other low interest introductory rate expires on newly-issued cards or when a customer is 60 days late on a payment.

  • If a customer is 60 days late on a payment and an interest rate is increased, the issuer must dial the rate back to the original level if the customer pays the past-due payments and makes 6 straight months of on-time minimum payments.

  • Card rates can not be increased in the first year of a card agreement (unless there is a limited-time low-interest introductory rate as part of the original card offer).

  • Low-interest introductory rate offers must last at least 6 months.

  • Customer payments must be applied to higher-interest balances first.

  • If a card is marketed as “fixed rate,” the card issuer must reveal exactly how long the rate is guaranteed to remain the same.

  • Credit card issuers can not use “double-cycle billing,” a practice that allowed issuers to charge interest based on the average balance from the past two months, even if last month’s balance was paid.

What it means: Out of all the new rules, the ones above are probably the greatest victory for consumers, and probably the most harmful to card issuers’ profits. In general, they say that any purchase you make must be charged interest only at the card’s interest rate when the purchase was made. Even if the issuer hikes your rate, the higher rate only would apply to new purchases going forward. Credit card issuers are really screaming about this — they believe it stops them from penalizing bad customers who turn into bigger credit risks, and they threaten that it will stop them from accepting many consumers altogether.
From my perspective, it’s simple fairness — even if a person becomes a bigger credit risk, I see no reason issuers should be able to “bait and switch” by increasing the rates on previous purchases made under different terms. This practice has forced many credit card customers to get into desperate financial straits. What card issuers may be missing in their anger is the possibility that fewer cardholders will default on their cards under these regulations, because they won’t suddenly be saddled with payments that are double those required previously.
Here’s the next set of rules:

  • Payment due dates must be the same each month. If a due date falls on a weekend or holiday, the due date must change to the following business day.

  • Issuers can’t charge fees for payments by certain methods. For example, issuers can not charge customers more if they pay by phone than if they pay online.

  • Issuers can’t allow customers to go over their credit limits and then charge “over the limit fees” unless the customer has first “opted in” — specifically asking for the service.

  • Issuers must include a place on the bill that shows customers how long it would take to pay off their balances if only the minimum required payment was paid each month. (Other similar disclosure rules are still being developed.)

What it means: Most of these fall under the “sneaky tricks” portion of the rules, in order to stop issuers from charging you fees for things that seem quite reasonable. For example, you shouldn’t be charged a late fee if your payment can’t be delivered on a due date that happens to be a Sunday, and card issuers shouldn’t be giving you a credit limit and then allowing you to go over that limit as a “service” that charges you an extra fee.
The last two rules are targeted at specific cardholder groups:

  • Issuers may not charge upfront fees that are greater than 25% of a card’s credit limit.

  • Issuers may not issue cards to people under 21, unless the customer has proof of income or has a co-signer who accepts responsibility for the card.

What it means: The first point is targeted at “subprime” cards for those with poor credit. A common industry practice when targeting bad credit customers has been to offer a low credit limit and then charge upfront fees that eat up most of the limit. For example, you sign up for a card with a $500 limit, but there are $450 in fees in order to get the card, so you start off with a $450 balance and only $50 in actual spending power. Desperate customers have been willing to take this deal, but no more.
The second point may kill the college student credit card market. Card issuers have long targeted college students, trying to “get them early” in hopes of creating brand loyalty. Lawmakers felt too many students were getting cards they couldn’t pay for, leaving college with thousands of dollars in debt.
What the future holds
While the Credit Card Act has thankfully rid us of many unfair practices going forward, the card issuers’ frenzied attempt to either hike rates or kick out unprofitable customers has left many between a rock and a hard place. In the past, a customer who was treated poorly by one credit card company could simply turn to another, with the likelihood being they’d be welcomed with open arms. Today, and at least for the next year or so, I believe consumers will have difficulty obtaining new credit cards, especially consumers with average credit or worse. This is bad news for those stuck in a high-rate situation.
What comes later is likely to be a good-news/bad-news situation. Credit will become more accessible again, but in the future it will more likely come with an annual fee, or with fewer if any rewards on purchases, or with new fees that have yet to be devised. The credit card industry has proven to very adaptable, and while it’s a sure thing that they’ll play nice legally, that doesn’t mean future credit card agreements will be written with your best interests at heart.
J.D.’s note: Don’t forget that you can opt out of this madness by simply refusing to use credit cards in the first place. I have one personal card, but there are times I’m tempted to go back to my “no credit needed” ways.
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Your company is growing. Now you are ready to start raising serious capital and you here the public fund raising markets. Here are the basics of your S-1 filing. Know the lingo before you hire a consultant. Because companies must adhere strictly to SEC regulations, initial prospectuses are similar in their organization. Each S-1 generally consists of the following sections:
Front Section — An S-1 contains a small amount of information not available in a prospectus. In this first section, you can quickly find the issuing company’s phone number and get a vague sense of the futur
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e offering price.
Cover/Inside Cover — The prospectus cover outlines the general terms of the offering, including names of the underwriters, number of shares offered, and pricing information. The actual share price is absent from a prospectus until the day of the offering.
Prospectus Summary — Here you will find a brief synopsis of the company’s business and history, a modest discussion of the change in capitalization to occur as a result of the offering, and a useful summary of financial information covering the last five years, if available. If you are screening prospectuses for investment ideas, start here.
Risk Factors — After you have read a few prospectuses, you will become familiar with the “usual suspects” in this section, including “Possible Volatility of Stock,” “Limited History of operations,” “Dilution,” and “Dependence on Key Personnel.” Nevertheless, this section is a worthwhile read to be sure that you understand the challenges facing the company’s management. The discussion of competition can be sobering, but it can also provide a means to compare the value of the issuer against the financial performance and market valuation of its competitors.
Taking your company public should be an exciting and revitalizing time. Don’t take unnecessary risks, hire a consulting firm who can streamline this process and deliver the results you’ll need for success!
Get S-1 Filing InformationWant To Go Public With Your Company, call Princeton Corporate Solutions at 267-233-0183Take Your Company Public the easy way!

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