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July 24, 2011, at 6:00 am If you're new to BFS, please subscribe to my RSS feed. It shows me a vote of support and keeps me motivated to keep your attention. If you have any questions or comments for me, please contact me and I'll get back to you asap. Thanks for visiting! The Saved Quarter Challenge Update
I joined The Saved Quarter Challenge this year and was aiming to save at least $21,000 by the end of 2011, but we hit that goal in mid-June!!! My new goal is to save a cool $42,000 by the end of 2011 instead! That would be a tiny bit more than 50% of our GROSS pay from our two full time jobs!!!
Here’s how I’ve done this week for the Saved Quarter Challenge:
Here’s how we did this week:
- Blogging Income – $500 banked
- Emergency Fund – $350
- Home and Auto Acct – $500
- Cash for Investments – $120
That blogging income was a combo of freelance work and regular ads. This will be my second to last “counted” blogging account contribution before I start having to pay myself from that account since I am now blogging full time!!! I only get one more regular paycheck – after that, my blogging income will not be considered savings automatically!!!
The new $42,000 goal is hopefully going to be reached solely through 100% true savings – 401(k), Roth IRA, emergency fund/savings, home and auto maintenance account, extra cash for investments, and blogging income before the end of July 2011.
Total This Week: $1470
We can save what we do because we live off of a little more than my husband’s salary as a school librarian ($38,000 take home pay). That means we save most of what I make ($26,000 take home pay a year) and all of our hobby job incomes (reffing for Mr. BFS and blogging for me). Reffing usually brings in $2000-$3000 a year and blogging is bringing in $20,000 or more a year (we’ve already hit more than $20,000 for January-July 2011).
Total to date: $29,288 guaranteed, $12,712 to go.
Additonal Info
I will continue posting monthly and yearly blog statistics and income updates, so stay tuned at the beginning of every month!
In case you didn’t know, Alexa traffic rankings are determined by the numbers of hits a site gets by people with the Alexa toolbar. If you want to be part of this ranking community, you can download the Alexa toolbar here. 
If you don’t already, you can follow me via RSS or Twitter by following those links.
To learn more about the Yakezie, the blogging group that has helped me in SO many ways, check out my Yakezie page! Feel free to email me if you are a Yakezie member or challenger and don’t see yourself on the list!
If you are interested in seeing how I went from an 8 million plus Alexa rank and 3 readers to where I am today, you can see My Blogging Checklists, which breaks down everything I do related to blogging. If you want to see how I have started bringing in more than $3000 a month in less than 18 months, you can check out How I Make Money Blogging.
I have also started a new site, http://howimakemoneyblogging.com/, which will cover how I currently make money blogging and my transition to a work-from-home blogger!
THANK YOU ALL FOR BEING THE BEST READERS EVER!!!
July 24, 2011, at 5:00 am
The following is a guest post from Matt, a contributing writer for CreditCardCompare.com.au, an Australian comparison service, where he reviews small business credit cards. Visit their website at www.creditcardcompare.com.au.
Many people are still being adversely affected by the economic downturn. Families have lost their homes, breadwinners have lost their jobs and welfare can’t seem to keep up with the number of applicants requesting assistance.
Though it may seem like squeezing blood from a stone, one must incorporate a method of saving to not be caught completely without when hard times hit. Saving is definitely not a quick fix. Depending on your finances, it may take time to build that nest egg. But with dedication and discipline a mole hill can be turned into a small mountain to bail you out of an emergency.
Here are some reasons and suggestions for weaving that safety net!
Reasons
1. Car Repair and Maintenance or Forced Car Purchase
Cars do require on-going maintenance to keep them running properly. Oil changes every 3 months and tune-ups can add up if they are not included in the budget already. Setting money aside for an emergency repair or required car maintenance will definitely help with keeping track of expenses. An emergency car repair can hit a budget even harder. Plan for the unexpected by setting money aside for an unexpected visit to the mechanic.
If you’re in the market for a new vehicle, saving for this purchase can spare you money over time in interest. Since the more down payment the less the monthly payment, saving for a vehicle purchase is best for the consumer all the way around. The best car purchase you can possible make is a reliable used car completely paid for when you drive it off the lot.
2. Entertainment
A friend calls and asks if you want to see a movie or maybe a show is coming to your area that you want to see. Having money set aside will keep you from robbing Peter to pay Paul. If you plan you can still have a bit of fun. It is important, however, to moderate the amount you spend on entertainment. It’s all too easy to spend literally hundreds of dollars per month on ‘entertainment’, be that TV subscriptions, magazines, cinema and going out. Incorporate it into your budget to keep yourself right.
3. Education
Higher education is a benefit that fewer people are able to afford these days, especially as fees continue to rise. It may not even be your own education that you need to budget for. Planning for the future of a child or career development education for the more mature is vital to reaching life’s goals, career and otherwise. If you apply for a loan, know that paying the quarterly interest on a student loan can save you money on the overall interest of the loan in the long run.
4. Retirement
It’s hard not to think about what the financial future holds for retirees, those about to retire or those wanting to prepare for it. Controlling your finances can prepare you for a more comfortable lifestyle when retirement time approaches. Look at it this way: the sooner you start to save for your retirement, which may seem long away but will eventually happen, the better off you’ll be. Save now or spend the twilight years of your life on the breadline? I know what I’d prefer!
Ways to Save
1. 10%
Whether or not your employer has a policy that you are currently invested in, take 10% of each month’s pay or source of income and put into a savings account. And don’t touch it! These funds will collect interest over time and can be a great comfort in a time of fiscal need. If you manage to save enough, the interest will contribute handsomely to your living standards.
2. Create a Sinking Fund
This is money set aside specifically for emergencies, which is why it is often called an emergency fund. Major car repairs or home improvements can lead to cash flow shortages in your budget and, as we all know from experience, they are often unexpected. Creating a sinking fund will prevent you from having to dip in your savings.
3. Avoid Branded Goods
Shopping for generic brands rather than name brands is a great place to begin. Although they may not have the same lustre as their branded cousins, generic goods (particularly medicines and food) are as good a product but much less expensive.
4. Start Cutting Coupons
Searching the internet for coupons or scanning the local papers for sales can save you more money than you think. If you can organise your coupons properly and remember to use them before they expire, you can save a significant amount of money.
5. Taxes
What about that annual tax return? Take all or part of that and start your sinking fund! Of course, you’ll need to have your finances, and specifically your expenses, in good order to maximise your return. Remember, any money in a bank collects interest over time, so why not use that fact to your advantage?
Over to You
In closing ask yourself: is it better to sacrifice now or suffer financially later? Staying focused and determined will help you meet your financial goals. All it takes is a bit of planning, patience and time.
July 23, 2011, at 6:00 am
My Favorite Posts this Week
Guest Posts at BFS
Thank you!
I Staff Write…A Lot…
Giveaways
Blog Carnivals
If you are hosting a carnival that includes Budgeting in the Fun Stuff, please email me so I can include it in my roundup. Thanks!
Top 5 Referring Sites to BFS from Last Week:
- Yakezie
- Free Money Finance
- Get Rich Slowly
- No More Spending
- The Saved Quarter
Feel free to contact me if you have any suggestions. I’d love to add a few more blogs to my regular reading list or at least give a shout-out for great posts or contests.
As always, thanks to all the bloggers that teach me something new every day. Thanks to all my commenters for making this blog the community I want it to be. Thanks to all my lurkers too. 
I hope everybody is enjoying this as much as me!
My Other Sites
I have started a new site, How I Make Money Blogging!
Let me know what you think!
July 23, 2011, at 5:00 am
Since Daniel at Sweating the Big Stuff started his interview series of other bloggers, my favorite question he asks every time is “If you could tell your 20-year old self one thing, what would it be?”
Every time I see that question, I think of the biggest financial mistake Mr. BFS and I made when we were 24 years old. I would tell my 20-year old self to fully check out any business venture before jumping in head first. This mistake ultimately led to us losing $12,000.
The Start of Our Biggest Financial Mistake
It all started with befriending the owners of the local board game store. They were nice people and the game store was our favorite hang-out. After a couple of months of playing at the store on a regular basis and even volunteering to help out, they brought up that their line of credit was running low and they needed a little help just to make it until the summer – they “would be good from there”.
Yes, at this point we should have questioned why they were so behind on their line of credit, but we didn’t.
When we asked how much they would need to get everything straight, they immediately said that $6,000 would fix it all. With dreams of passive income from a game store on our minds, we cashed in the savings bonds from our grandparents and threw in $3,000 from our own savings. That had to be the quickest $6,000 we ever threw away.
After we invested that first $6,000, we slowly figured out that both of the owners treated cash like water and had no idea what they were doing. They had a maxed out line of credit at around $130,000, a $3,000 loan from Dell that was behind by several months, and $5,000 of other personal bank loans they had never paid anything towards. The incoming money was barely covering the cost of merchandise and utilities. I immediately was handed the check book and asked to set things right.
This is where Mr. BFS and I should have said goodbye and just thanked our lucky stars that we only lost $6000…but we didn’t.
The End of Our Biggest Financial Mistake
Over the next week, I figured out the numbers and made a payment plan that would technically work if absolutely everything went by the book. You see where this is going, right?
I paid that Dell loan off from our own savings (talked them down from $3,000 to $1,800). We also sunk in another $7,000 over 3 months for merchandise and owed sales taxes. That brought our grand total out of pocket to about $15,000 in 4 months.
The store was indeed recovering and my payment plan was even leading to the bank reopening the line of credit, but then one of the owners over purchased a week’s worth of product despite my reminder, which caused an overdraft on the line of credit. That overdraft was the last straw for the bank and they called the full line of credit due at once. That was a sad end for a good store.
The two owners had to declare bankruptcy since all the loans were due and they didn’t have the cash to cover it. Hubby and I hadn’t touched our home fund, but our emergency fund was hit really hard. After the closing costs and 20% down payment, we only had about $5000 left in all of our savings combined. It was a rough first year and we just crossed our fingers that our house wouldn’t have any major issues. I didn’t want to touch my 401(k). We got very lucky.
The Wake Up Call to Avoid Financial Mistakes in the Future
That whole situation was a wake up call for Mr. BFS and me. We are two very smart people who can successfully run a business, but we were way too arrogant and rushed into a very bad situation. We were just too stubborn to back away. Arrogance and stubbornness led to an overall loss of $12,000 since we were able to recover about $3,000 in tax breaks over the following 3 years. I am thankful we didn’t go into debt, but it was definitely the most expensive lesson in humility that I hope to ever have.
This post was one I wrote as a staff writer at Sweating the Big Stuff last September. Yes, I received permission from SBS to republish my older works from his site.
What would you tell your 20-year old self? Have you learned any expensive lessons along the way?
July 22, 2011, at 6:00 am
I just started volunteering for Meals on Wheels this past Monday and I have already learned something. Save for retirement or else.
Don’t get me wrong. Meals on Wheels is offering a great service for people in need. Drivers like me walk a lunch directly to the door of people in need. These are complete meals, but we are not talking about fine cuisine.
Monday’s lunch was a tv dinner of warmed up Salisbury steak with mashed potatoes and broccoli, a packaged piece of bread, a plum, a packet of butter, and a small carton of milk. Based on the smell, we are talking about an 88 cent tv dinner, not a Smart Ones or Lean Cuisine (which are pretty tasty in my opinion). A couple of the people I delivered to have disabilities and several just need the financial help of a free meal. But how much over-microwaved Salisbury steak and broccoli would you want to have when you’re in your golden years?
I personally have a much higher standard of living and plan on sticking with it. If I ever have a tv dinner when I’m 85 years old, I want to be able to look through my own freezer and pick the one for the day. I also want it to be a choice and not a financial necessity.
Here are my plans for retirement:
- One story house or all important rooms downstairs so our knees don’t suffer.
- Weekly trips to the grocery store or ordering groceries for delivery from places like Amazon or Schwan’s when we can’t get out as easily.
- Traveling every few months as long as we are physically capable.
- Host even more groups at home when we can’t travel easily anymore.
- Enough money to cover any health problems that pop up and give us a very comfortable end-of-life care.
- Keeping my 401(k) balance and watching it grow from my day job.
- A Roth IRA for me.
- A Roth IRA for my husband.
- My husband’s pension.
- Investing in stocks through Scottrade.
- I am now researching self-employment retirement account options.
I’m actually looking forward to my whole life, the 20′s are a ton of fun, but I think the 30′s, 40′s, 50′s, and retirement years will kick butt too. I just wish each year didn’t seem to go so fast.
What are your retirement dreams and plans? What are you doing to avoid needing Meals on Wheels?
July 21, 2011, at 6:00 am
The following is a guest post about credit cards and credit scores from Angie Picardo, a staff writer for NerdWallet, which is a credit card website dedicated to helping consumers find the best credit card.
Though they are often mistakenly interchanged, there are some significant differences between credit cards and charge cards. Unlike credit cards, charge cards don’t have preset spending limits. The idea of a limitless card may sound dangerous, but since the balance must be paid in full at the end of each month, cardholders are encouraged to think twice before embarking on any shopping sprees. Plus, a card issuer can always cancel the card if they decide you’re too risky.
So how should our friends at Fair Isaac factor a charge card into your credit score? You (hopefully) never carry a balance month-to-month, and since your credit limit is technically infinite, your debt-to-credit limit ratio is zero to infinity. FICO doesn’t waste time with abstract numbers, of course, so we’re left with the question: How does a charge card affect your credit score?
Does a charge card influence your credit score?
According to FICO, the percentage of your open credit lines in use, or your debt utilization ratio, makes up 30% of your credit score. So if you had an $8,000 limit with a $2,000 balance, your utilization ratio would be 25%. A lower debt-to-credit limit ratio translates a better credit score because it shows that you can avoid maxing out when trusted with a good amount of credit. Unfortunately, figuring out the debt utilization ratio on a card with no limit and no balance makes it a little difficult to determine how charge cards affect your credit score.
Allow us fill you in.
Charge card issuers report your highest balance to date, or a “high limit,” instead of your credit limit. They also report the credit line as “open” as opposed to a “revolving” credit line, which has no fixed number of payments. If a credit bureau sees an open account with a high limit instead of a credit limit, they know they’re looking at a charge card. They then disregard the information, so charge cards have no impact, positive or negative, on your credit score.
So what’s the benefit?
Before you write off charge cards as limited lines of credit that don’t help your utilization ratio, consider the cards’ other effects. Over time, having the account bumps up the average length of your credit lines and payment history (that is, if you’ve been keeping up), which adds up to 50% of your overall credit score. If your only goal is to maintain your credit score and keep low balances, a revolving card may be the best credit card for you.
But it really all just comes down to whether or not you are a responsible cardholder. A charge card can be costly if you carry a balance: some charge $35 if you’re late, or worse, 2.99% of the balance. That translates to an APR of over 35% – far worse than most credit cards. If there’s a chance you won’t be able to pay off the debt on your charge card in a month, you should look for a low interest rate credit card instead. Charge or credit, no card can replace keeping a keen eye on your budget and practicing good, old fashioned, smart spending habits.
July 20, 2011, at 6:00 am
Mr. BFS and I went to Las Vegas from 7/4/11 – 7/8/11. I budgeted for us to spend up to $3000, but was seriously hoping we could keep it all to $2000 or less.
Here was the final breakdown of our costs:
- 2 roundtrip non-stop airfares and 4 nights at The Golden Nugget – $875 including travel insurance
- 2 Tickets to Marriage Can Be Murder, a comedy murder mystery dinner show – $110
- 2 Tickets to Cirque Du Soleil Mystere – $130
- Hugo’s Cellar restaurant reservation (our favorite) – $95 with tip
- Two taxi rides from and to the airport – $55 with tips
- Bus passes for the strip – $14
- Additional Food – $150
- Additional Tips – $45
- Souvenirs – $15
- Gambling (Pai Gow for about 50 hours and Video Poker for about 10 hours) – $515
- TOTAL = $2004
The most interesting points of the trip were:
- Marriage Can Be Murder was funny and the cheesecake for dessert was DIVINE.
- Cirque Du Soleil Mystere was pretty dang funny AND amazing.
- I got a straight flush at the Pai Gow table.
- Mr. BFS hit a few 4 of kinds at video poker.
- We both learned a new table game – Deuces Wild Stud Poker (lost $200 in one sitting and figured out that it wasn’t the game for us…)
- The Chilean Sea Bass at Hugo’s Cellar was sooooooo good!
- Mr. BFS and I decided I should quit my day job.
- Found Nathan’s Hotdogs inside of The Mermaid – 99 cent hotdogs and 99 cents for 3 deep fried Oreos
- I got to try deep fried Oreos for the first time ever – picture Oreos dipped in funnel cake batter, fried, and then sprinkled with powdered sugar. OMG! I am so glad there isn’t a deep fried Oreo booth around my house…
- Found out that when a flight is delayed two hours around dinner time, the cheapest meal you can get is $9 at Burger King, so we split it and ate out when we landed at 2am…
Overall, we both had a great time and stayed pretty much on my targeted budget. I’m very happy with how it went and Mr. BFS wants to go back asap! I think we’ll be staying at Fitzgerald’s next time since we gambled there the most.
Have you been to Las Vegas? What were your favorite parts?
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DISCLAIMER I am not a professional or a financial advisor. BFS posts are informational opinions only. Please make your own financial decisions based on personal research or see a financial advisor.
Also, there are paid links on this site. There is no obligation on your part to purchase any products advertised on this website.
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