Grant's Law School Blog

Online Friends

2006-08-10T12:04:00.000-07:00

I noticed an amusing entry on my friend Rosetta's blog about "normal" friends...and I had to smile a little. She's right. Most of my "friends" are online...and that's because I'm online probably more than anything else. I write for a number of debate forums, moderate several boards and operate my bills, bank accounts, and even work from home occassionally through a paid service that connects me to my desktop in my office.

I like my online friends...and they aren't as complicated at my real-life ones! If I don't speak to them for a day or two...there is no bitching or complaining that I don't care. I like that.

I guess we are products of our current society. Update on my finances coming soon!! Also, check out Rosetta's blog using my links at the bottom or click here. She needs your assistance!!

Grant

Coupons, eBay, and Spare Change

2006-07-13T13:07:00.000-07:00

I opened my ING account last week (see recent posts to find out about that) and I opted to automatically deposit $10 per week from my paycheck. In a year, I will have said $520.00...and that's if I don't make extra deposits and assuming I never touch it.

I've also begun saying my spare change...in just a week, I counted $6.00, not including the pennies, so that's another $312.00 in a year, if the trend continues.

Also, I began last week taking some of my unwanted DVD's and peddling them on eBay. Some people might think that nobody will buy them...but that's not necessarily the case. There are people who live in obscure places in the world and often the only place they can find DVD's that are easily accessible to most of us...is online through eBay or another venue. I had a 3-disc set of Karate Kid I, II, III & IV (the fourth movie was on disc 3)...I purchased it for $29.00 and sold it on ebay for $17.00 plus shipping to a user who lives in Tennessee somewhere. Maybe he/she lives far from any stores...maybe they don't carry that collection there. You never know.

If you own a home and you have a lot of stuff stored up over the years...it might do you well to go through boxes and closets to find some of your "unwanted" treasures that might actually be wanted by others...who might be willing to pay you well for them.

I've also decided to start moderately clipping coupons...and then saving the money that I save while shopping. If I clip a coupon good for $0.50 off...and then use it...I'll put 50 cents in my savings. I read about a woman once who was so good at coupon clipping that she actually left the store once with $120 worth of groceries...and they had to pay HER money. After the Oprah segment on this woman, I think most grocery stores removed this possibility...but this past month, a co-worker said she only paid $12.00 for her groceries last time she shopped...she left the store with nearly $200 worth of groceries.

I'm going to try that, I think.

How To Save Money When You're Poor

2006-07-08T03:54:00.000-07:00

This was a dilemma of mine for years, being a single parent. When you live paycheck to paycheck...hand to mouth...with virtually no money left over...how do you start a savings account? I finally figured out a way that worked for me.

But...before I give this advice...you should know that this advice is not very responsible. In fact, it's BAD advice...and you should try ALL OTHER methods before trying this one. It's ONLY for those who are willing to be risky enough to try it when all else has failed...and it still might HARM you. It might even bury you further in debt if you don't do it right. REMEMBER THAT.

If you do it right, however...you could finally achieve a savings account and have some money set aside, like you always dreamed.

Here's how it works:

If you were like I was...your credit is not so hot. In fact, you couldn't finance a box of kleenex. However, most local finance company's will loan you money. But...not without a price. And that price is a HIGH interest rate. If you borrow $300...you'll probably wind up paying back somewhere around $400 to $500.

So, what you could do is take out a loan at a local finance company for something like $500 t0 $1000. Then, take that money...ALL OF IT...and open a savings account. And DON'T TOUCH IT! Then, make the payments to the finance company and pay off the loan. Now, I can almost hear some of you saying, "That's stupid. Why not just save the high interest rate and put those payments in the bank? You'll have more in the end!" Very true! And THIS is precisely why I say that if you can do that, it's the MUCH better way to go.

But, if you were like I used to be...I was motivated enough to make payments to a company. I was NOT, however, motivated enough to make those same payments to myself in the form of saving's account deposits. If you CAN motivate yourself enough to do that...DO IT.

If not...then you are paying the finance company the interest rate...but it's paying for the CONVENIENCE of suddenly having a $500 to $1000 savings account...something you'd not have otherwise. Chances are...it's likely that in the same time you would have paid off the loan, while having the savings account...you would have wasted that much money, plus the interest rate...anyway!

Think of it the same way you do making a credit purchase to buy a television or some other home commodity. Why not just save the payments up...and buy it straight out? After all, you'd save on the finance charges! Simple. Most of us don't have the motivation to do that. Many of us are more motivated to make credit payments on time...than we are to save those same payments in savings until we add them up to the cost of the appliance or whatever it is that we want. We pay the finance charge, understanding that it's CONVENIENCE we're paying for. We get the television TODAY...because we know we'd likely not save up for it, otherwise.

That's how this savings plan works. You get an instant savings account with $500 or more...and you pay for that instant convenience by paying an interest rate for it.

Again...this is NOT for everybody...and if you know you are likely to spend the savings, rather than leave it alone...then don't do it. You'll only be worse off than if you had never done it.

This is what I did over the course of 5 years. After 5 years...I had saved over $5,000. With the finance charges I paid for borrowing $500 twice a year and paying it off ($150 to $200 per loan)...I really only saved something like $3000 to $4000. I paid over $1000 for the convenience. However...since I wasn't motivated to save $5000 on my own...I wouldn't have saved anything at all...if I hadn't done it.

And this plan works even better if you can get your loan from a bank...whose finance charges aren't nearly as high.

So, that's my advice. It's a fringe alternative plan...but if you apply it effectively, following the advice and understanding your responsibilities and your risks...you'll finally be able to save SOMETHING. Even though it will cost you to do so. Again, remember, over the course of time it takes you to pay off a loan with high finance charges...you'll probably waste that much anyway, with frivolous spending and whatever...and STILL have no savings.

And once you have a substantial amount of money in your savings...eventually you'll become more motivated to do it without having to pay the cost of high finance charges. Think about it.

Grant

My Budgeting Tips

2006-07-07T16:06:00.000-07:00

Edited: An excel sheet example of this budget is linked below.

Poor or rich...you need a budget. You just do. Well, okay...I do. I used to have a crappy way to budget my money where I had white envelopes set aside in a drawer with words written across in big black letters like: CAR PAYMENT...CABLE BILL...CRACK HABIT...you get the idea.

At the beginning of each month, I would plan the entire month, looking at each payday to see how much I had to take from each check to put in the envelopes so that it would add up to the amount by the time it was due. Yes, this was a bass-ackwards way to do things. Not to mention dangerous, since my cash was always sitting at home in a drawer.

Now, I keep all my money in my checking acount and I keep a budget in an excel spreadsheet and plan it out for the month. Since I get paid every other Thursday, I have vertical columns of bills for each payday...usually spread 3 columns apart for room for my current bank balance...and payday deposit. Then, I write next to each bill for the given payday...how much needs to be set aside that week for that particular bill, (but in a negative amount)...so that once it comes due, I know the money is there. Once you enter what you have to set aside for a given week...add them up. That is your total for the week that needs to stay in your checking account.

Next, beside the column for the week, I enter my checking account balance in one cell (labeled) and my paycheck deposit amount. Then, using the magic of excel codes, you have excel add your checking balance with your paycheck...and then subtract the amount set aside for bills. That is your carry foward balance for the next payday.

Keep in mind...if the carry foward is NEGATIVE...you have to refigure something. You don't have enough. If it's a positive amount, this is what is left, obviously. What I do is include in my bills...MY EXTRA SPENDING MONEY, so that the money left over...I won't spend. In fact, I budget EVERYTHING. Gas money for the week...money for clothes, if any...money for movies, if any...my son's allowance...cigarette money...money for the hooker...just budget everything! That way your carry forward will actually CARRY FORWARD.

Also, it's a good idea to do this at the beginning of the month FOR THE ENTIRE MONTH. Not just for the current payday. That way, if you see problems coming because of the carry forward amount...you can make adjustments. Don't forget to use the right codes for each cell that determines totals and balances...that way if you make a change in one week's budget amount...it will change the coming week's balances and you'll always have a true picture of your financial situation.
I'll give a hypothetical example so you can see how this works. Let's say that my total car payment is $500 and this is the only bill I have (HAHA!!!!!). On June 1st, I get a paycheck of $500...and on June 8th, I get a paycheck of $500. That is $1000 total (for those who are match challenged).

Obviously, I don't want to pay my entire car payment on the 1st, since that leaves me no money left over for drugs, hookers, or gambling. Instead, I'll set aside in my checking $250 now...and set the rest aside in my next check. But I KNOW that I ALWAYS have to have at LEAST $250 in my checking account so that when I add the next $250 on the 8th...it will be there for when my car payment is due on the 15th.

My budget might look like this:

June 1st
Car payment - $250
Gas - $50
Food - $200
Total: $500

I know that by the time I get my next check on the 8th...I BETTER have $250 in there...else I'll have to cut from other things on that payday...like food or gas.
In excel, this has proven to be a great way to budget for me because I can quickly glance over the entire month...plug in my current balance...to see what money I can still spend or not. It's also easy to make adjustments, because if I make an adjustment for my gas money during the week of the 8th...it will show how that affects what I have left during the week of the 1st. Having a working knowledge of excel is needed for this budgeting tactic.

I'll upload an example budget in spread sheet that you can download and look at to see how all this works. It's hard to describe it in words. Once you download it...you can play with the numbers in each column to see how changing it in one...changes everything else.

Here is an example: http://fileshare.variousstuff.net/0000002476/

If you have a better idea...or you think my idea can be improved upon...please leave comments!!

More Online Savings Accounts

2006-07-07T14:01:00.000-07:00

Here are 4 I found today...I signed up with ING:

1. HSBC http://www.us.hsbc.com/1/2/3/personal/savings/online-savings

No minimum deposit…no fees. APY currently 5.05%

2. CitiBank - http://direct.citibank.com

No minimum deposit…no fees. E-Z checking…APY currently 5.00%

3. ING - http://home.ingdirect.com/products/products.asp

No minimum deposit…no fees. APY currently 4.35%

4. GMAC - http://www.gmacbank.com/?engine=overture&keyword=gmac

Minimum deposit of $50…no fees. APY currently 4.90%

Welcome to My Blog!

2006-07-07T12:50:00.000-07:00

Yes, I am also a poor law student and I have started this blog, inspired by my law school friend Rosettasearch...whose blog can be viewed here: http://tlagpto.blogspot.com/

I wanted to use this blog as just a means to rant about school and other issues, including and probably mostly...MONEY issues. Law School is not cheap and being a single parent, I rarely have a lot of money left over. Additionally, I have never been able to save money, even though I do have a 401K plan.

Prompted by a post that Rosetta wrote, I have opened a savings account on the online banking system, ING...which can be found at this link: http://home.ingdirect.com/

Since my usual bank (checking) put me through the ringer in order to open a savings...I backed out and decided to do this. With my usual bank (Union Bank of California)...the process of opening the account made me feel like they didn't know me, even though I have been a very long-time patron...and they had a minimum deposit, which I didn't like. Additionally, even though I applied online, the process included a phone call and faxing them copies of my driver's license. Geez, the red tape.

ING has no minimum deposit and the process to open the account took like 10 minutes, tops. The security is also very good on the site and they are actually implementing further security measures to make the customers feel and be more secure. Not as important, I also like the friendly, orange look of the site. Clean lines. Bright colors. Makes me feel nice.

I have set up a bi-weekly deposit that comes directly from my checking acount into the ING account. No muss...no fuss. Plus, I like that it takes 2-3 days for a withdrawal (directly to your checking account)...so impetuous, spontaneous spending can be avoided.

At any rate, this is my first entry, so I am hoping this blog will inspire me to save more...and think of new ways to save money.

Grant