Lessons Learned From An 8-Year-Old

While standing amongst all of the things I can't afford in a luxury retail store this afternoon, my attention turned to the interaction of a mother and her daughter about eight years of age. The woman was picking out designer purses and the girl curiously followed along. When the mom started to examine a purse, the eight-year-old nagged, "Check the price tag. Did you check the price tag?"

The first two requests were ignored, but by the third time the girl repeated herself, her mom impatiently replied, "Don't worry about it."

The little girl reached out, grabbed the tag, and gasped, "OH MY GOD! It's so expensive..."

Using the Buddy System in Your Financial Life

Boy, am I tired right now. It’s almost been three days since I updated, but I certainly haven’t been slacking off. In fact, I’ve been “working” way too hard. So what's this complaining about, you ask? Remember that group training membership I spent more than 30% of my "fun" budget on? I’m currently in the middle of my first week of classes. It’s been brutal, but I'm definitely going back for more tomorrow. Why torture myself? Well, there are three main sources of motivation for me: fitness, the chunk of my budget that I already invested, and my workout buddy.

Not only did I bring my own buddy, the class is set up for attendees to mingle and encourage each other. The idea is that by building a community, we'll be more accountable and more driven to keep going. I can tell you that it’s working. I haven’t felt this sore since I first started rock climbing, but I’m excited to go back there every night.

And this has to do with personal finance how…?

How to Deal with Credit Card Fraud - Part 1

I received a "Fraud Alert" email from Bank of America on Saturday night, letting me know that my credit card was declined at a Bed Bath & Beyond for a $25 charge. Hmmmmmmm...interesting. I was near a BB&B earlier that afternoon, but I sure as heck did not go into the store, nor did I attempt to make a $25 purchase. My card hasn't left my wallet in a week, so this is a little absurd. Okay, can i go back to the Bed Bath & Beyond thing? I mean seriously? That's what they stole my credit card information for? I'm kind of insulted! Anyways, stuff happens, so I figured it's a a great opportunity to blog about what to do in situations like this one.

1. Check the validity of the email/call: You don't want to compromise your accounts because you thought a fake fraud alert was real. There are scams where an email with a false link or phone number is sent out to alert people of suspicious activities on their credit card accounts. Then, when you use the contact information given to confirm this, the con artists will ask for sensitive information such as your social security number, account number, and date of birth in order to steal your identity. Don't let this happen!

Go Ahead, Live a Little and Splurge

I stumbled across the Ask the Readers section on Wisebread yesterday. What do you splurge on? They ask. Well, that’s simple enough, good food, of course! With food trucks, unique ethnic cuisine, and all of those fancy schmancy Michelin Star restaurants, the SF Bay Area attracts foodies (me included!) like a giant magnet. But the more I thought about it, the more complicated this question seems to get. Maybe I just like going on tangents or maybe there’s actually something to this. The problem with the word splurge is that it’s relative. In my current state of only have a $100 discretionary fund, almost everything can count as being extravagant. Buying lunch with friends for $12 plus transportation costs? Well, that’s 1/5 of my monthly budget spent in one (half) day! Splurging? You can say that.

But like I said, it’s all relative. These are small ticket items in my tiny budget. The things that will truly impact my finances most immediately are the big ticket items. I guess this means small gadgets, food, coffee, and occasional clothing items are out of the picture. That leaves…oh! The thing that I’ve been budgeting FOR!

Curb Spending By Using Cash

I talked about how cash is still a superior form of payment in my last post. Now is the opportunity for me to put my money where my mouth is. It's the beginning of the month, and I haven't used any of my discretionary fund yet. This morning, I will go to the ATM and take out $80 in cash (out of my $100 budget) to spend for the rest of the month. What about the rest of the budget? Well, because I have to swipe my Chase debit card a total of 5 times a month to avoid a checking maintenance fee, I left that $20 out for that purpose. Besides that, all of my "fun budget," including food (non-grocery), clothing, and going out money will be spent in cash.

So what do I hope to achieve? I'm not purposely trying to piss off the people standing in line behind me, for sure. It's really to test the theory that using cash can help you to relate more closely to your money. By spending (almost) only cash this month, I'm hoping I'll be more aware of how much $$ is physically disappearing from my wallet. It might hurt more, but hey, I call that tough love!

Have you ever used this method to curb spending? Did it help? If you've never tried this cash only spending method, I encourage you to join me. It'll be more fun with more people =D

Why Cash Still Reigns as King

Okay, I have to admit, I used to be one of those people who roll their eyes when someone fumbles through their wallet to count their cash so they can pay with exact change. Wouldn't it be easier if everyone just swipe their card? As an engineer, the question of efficiency constantly lingers my mind. In this case, card swiping wins against cash, especially when there are 7 other people standing in line behind me and we’re all waiting for the person in front of me to finish paying.

Well, efficiency often comes at a price. In this case, the tradeoff presents itself in the form of interchange fees and wasteful spending.

Interchange Fee
If you’ve ever gone to a store that tells you it doesn't accept credit cards or that there’s a baseline spending you must reach before you can swipe, you probably have the interchange fee to thank for your inconvenience.

January Budget Summary (and Happy 1 Month!)

Wow, today marks one month of blogging! It's been a great month. The blog helps keep personal finance on my mind constantly, which is awesome because there’s still so much more I need/want to learn! Not only that, I learned a lot about blogging and social networking, too.

Remember that I mentioned setting a non-discretionary spending budget of $100 a month earlier? Well, the results are in: drum roll, please...I spent $116.11. Not a total success, but not a complete fail, either. I felt so guilty for spending more than a quarter of my budget less than a week after setting it that I returned something I bought in December.