A few days ago, I got a notice in the mail from Chase Card Services notifying me that from now until June 6, 2008 I will get $10 back if I make 3 purchases using their ‘blink’ transaction feature. A ‘blink’ transaction is one where all you do is hold your card up to a little pad and it automatically performs the transaction. It utilizes a RFID chip inside your credit card that emits a radio signal to the little pad that acts just like swiping your card, except you don’t have to swipe it. It works just like a Speedpass does for gas stations, or a FasTrak , or the I.D. badges that communist party officials have to wear in China so that Big Brother can keep tabs on them. It’s the same exact thing.

I love free money (and so does my credit card compay) so I am planning on taking full advantage of this opportunity to rack up the rewards and to have my personal purchase information used to generate personal adds that will one day greet me as I enter my local 7-11. “Hello, Mr. Lucre,” a bright, yet hologram 6 year old boy will say, buy me last pape’? I’m a sucker for little coughing kids.

The terms of the deal are as follows:

1. Shop at participating a shoppe
2. Wave your card in front of the potentially privacy stealing device
3. Get paid $10 for your trouble

The participating locations in my area are Arbys, 7-11, CVS, and Office Depot. The only place we really shop at is the CVS, but we haven’t gone in several weeks. I don’t want to go out and buy some random piece of crap just because I want $10 free bucks so it may turn out that we end up buying three packs of gum in three different transactions during the same visit to CVS on June 5th. A more likely scenario is that we don’t make the three purchases but instead buy two pieces of crap that we don’t really need and miss out the deal of the century. Go figure.

RFID related articles:
RFID Journal - first independent media company that solely covers RFID devices
Researchers See Privacy Pitfalls in No-Swipe Credit Cards - NYT, October 2006
Credit cards with radio tags speed purchases but track customers, too - Boston Globe, August 2006
A Hacker’s Guide To RFID - Forbes, July 2004
RFID Chips Are Here - Security Focus, June 2003

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Posted in Banks & Credit Cards ~ 2 Comments

Could your savings use a lift? Is your wallet a little thin? Could you stand to pad your bank accounts? The equation for doing so is pretty simple. It looks something like this:

Earned Money - Spent Money = Saved Money

You see, the mechanism for saving money is simple. All it takes is making more money than you spend and spending less money than you earn. Its simple, but not easy. Many of our savings resemble a poor, underfed pig rather than the fat, succulent creatures that put bacon on the table. In fact, 43% of Americans make a habit of spending more than they make (Source: How does your debt compare?) That is a lot of people! For these their saved money equation is all out of whack and resembles something like this:

That is a scary. When this is us, our ship is getting battered by the waves of life or our consumerism has taken over, possessing us with Legion like ferocity. Instead we all want our equation to look something like this:

Nice fat earnings, small spending, and large savings. We may want to save lots of money for different reasons, but we all want to save. Here are five simple (though not always easy) steps to make that equation a reality.

1. Determine what you really need - this is by far the most important step to increasing the amount of money that you can save. Most stuff you simply don’t need. iPods? Nope. Cell phones? Nope. Cheesy crunchy gorditas? Well … maybe … oh well, I guess not. You see, if you can wrap your mind around the notion that you really don’t need all that much to live, be happy, and make an impact on the world around you then you are jet set on becoming a multi-millionaire when you don’t even make that much money. Your power to save increases dramatically when you realize what your real needs are.
2. Set up a family budget - I have already talked about how budgets are wise and help keep you sane, but they also help you save - a lot. Budgets can be extremely simple, especially if you have already pared down your life to the necessities. All you need to know is how much you need to get by on, then pad it a little, and let this number become your spending limit. Let’s just say that you make $1800 a month and need to spend $1300 on food, shelter, and necessary transportation for the month. You might pad this number up to $1400 to cover unexpected or irregular expenses. This is all the money that will be spent for the rest of the month. If you are not disciplined with the use of credit cards, you might want to withdraw that money from the bank at the beginning of the month and keep it stashed at your house somewhere. You cannot go to the bank again (obviously you will in a real emergency) and you cannot use any credit cards. Simple, right? It might be hard psychologically, but it is simple. Your time period could be the time between paychecks, a week, or a day, it really doesn’t matter. It just needs to be concrete, achievable, and helpful for increasing the amount of money that you can save.
3. Transfer all remaining money into your savings accounts - whatever time period you choose for your budget, set up automatic transfers from you checking account to your savings for the amount you expect to have left over. By automating the process you don’t have to remember to do the transfers yourself and you only have to revisit it when you get a raise or a new source of income or category of expense pops into your life. By precommitting your money in this way it may deter you from spending more than you need to.
4. Find ways to earn more -another equally important part of saving more money is to find things that you like to do that earn you more money. Work smarter at your place of employment, pick up a profitable hobby, start a side business, or even work the kinchin lay. All will make you money with some varying degree of success. Don’t kill yourself with work, but be useful for goodness sake.
5. Kill temptations -especially if they are your friends and then take the money that they have in their wallets. The cops will never suspect you! Coffee, computers, Cubs tickets, trips to Circus Circus, Carnival Cruises, and chillin’ like a villain all have their place in your life, but sometimes they are just there to tempt you away from things that you really want. Sometimes it’s just time to show those temptations whose boss by scaring them away with your creepy Suze Orman paraphernalia. Conversely, you can conjure up all the hopes and dreams you have for your future and compare that to the transient pleasure that you will derive from a drug laden beverage that “helps you wake up in the morning.” Your dreams will win if they are worth anything.

Simple, but not easy.

Image: Nieve44/La Luz

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Posted in Frugality ~ No Comments

If all goes according to plan, by early November 2008 my wife and I will be the proud parents of a strapping young lad, like me. My wife thinks it is going to be a girl, but I know better - boy all the way baby!

I am simply overjoyed with the thought of being a dad. There will be so much life to share with our little one, I simply can’t wait until he is born and ready for interaction. I hear that most of the pregnancy and very early infancy is mostly mother-baby bonding time, but I’m still pretty excited to see my wife’s belly grow and to hold a squirming, messy baby as it enters the world. I want to see his eyes and think that one day this child of mine will spread love in the world and shine brightly for all to see. I’ll get to learn his thoughts and know his heart. I am sure there will be struggles - sleepless nights, financial stresses, and serious parenting errors - but I know that it is going to be worth it.

I think that you can expect to see more baby related posts in the future as I prepare our finances for the onslaught of baby. I have numbers to crunch, diapers to evaluate, money to earn, last chance vacations to make, and countless other decisions to make over the next several months that I am sure some of my research and thinking will leak onto my keyboard and into your brain.

Does anyone know of some good baby cost projection stuff? I am really interested in how much baby will add to our monthly budget in food (after breast feeding), diapers, wipes, etc during the first year or two. I absolutely *need* these numbers for my planning purposes.

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Posted in Family Life ~ 9 Comments

Photo by: helmet13

There are a million and one ways to increase your savings. But for people like me, simplicity is essential to maintaining a long term involvement in managing money. If you make things complicated for yourself than you are never going to stick with it, because chances are you would much rather be doing something else. Using gimmicks and little tricks may provide some psychological benefit, but in the end I find that they add unnecessary clutter to savings goals and prove difficult to track - thus adding inefficiencies, frustration, and confusion into an otherwise simple equation:

The goal is always to save more money. Some people choose to do this by earning more, others by saving more (some even do both, hurray for frugal capitalists). Most people don’t really have a hard time over complicating the idea of earning more. That’s probably because most people have one job that they can easily track their income from because their employer writes them a check every few weeks and deposits it in the bank for them. Simple enough. It might get more complicated when a person is self-employed or when they have many different income sources that are constantly coming in, but this is naturally complicated. They didn’t artificially complicate it. Oh how I long for this type of complication!

Then there is spending less. Everyone and their mother seems to have a magic money saving dance that somehow taps into the power of powerless ancestral spirits, thereby transporting large sums of money into Magic School Buses that shrink everything and deposit them in your inner ear. Unfortunately, most people destroy this money carelessly with a Q-tip during their morning ritual rather than do the hard core Rumpelstiltskin and rip themselves in half, thus magically transform the small money into regular size money (that is what the fairy tale left out). Don’t worry the Magic School Bus will come back and sew you up.

Now most people really don’t do magical dances, but it sure seems like they do sometimes. Instead they come up with little tricks, like putting all your spare change into your savings account. Spare change? Are you going to get rich by putting that $0.72 into your savings account because you bought a 20 oz. soda from the supermarket for $1.28? Is that really saving? Investing your spare change that you created through buying stuff, though technically classifying as saving more in that you do put more money in the bank, is not really saving. It is like taxing yourself for making purchases that you probably should not have.

I say abandon these gimmicky approaches and simplifying your savings. Increasing your savings should be about:

1. … keeping more of the money you earn - this means that you need to actually spend less in order to keep more. Increases in spending are like a plague that eats away at future earning potentials by turning your current store of cash into someone else’s store of cash. This is good for their savings, but not for yours. Really reduce spending by sticking to the necessities. Buy stuff when you need it, go without it when you don’t.
2. … your long term objectives, not your short term realities -sometimes we just can’t help focusing on what is happening right now, but it really does help us when we step back and get the big picture. Your current want may be hindering your future want, so be careful what you give in to. Remember to keep a balance though, there are a lot of things that are more important than money.
3. … changing the world - you ultimately want to have a lot of money so that you can help a lot of people, right? Good, because I can’t think of a better reason to have lots of money than to do lots and lots of real good with it. Financial independence may be what some people want, but not me. I want lots of money so that I can increase the quality of life of thousands upon thousands of people.

Ideally, one day I will be able to generate massive amounts of income while spending such a small amount of it that I create this self-perpetuating world improvement fund that grows and grows while it helps change the world. I’m not sure if I will make, but I know that I’m going to try.

Why do you want to save more? What’s keeping you back from saving? Leave a comment here or feel free to send me your thoughts on my comment form.

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Posted in Frugality ~ 1 Comment