Author Archives: Money Reasons

About Money Reasons

A offbeat personal finance blogger that comes from the tech world.

Controlling Christmas Costs

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How I Controlled Christmas Costs in the Past

Christmas Presents

Christmas Presents

I’m constantly looking out for value in Christmas Gifts.  For example, my wife is a big book enthusiast, so whenever I see certain authors in the Bargain Bins, I snatch them up!  Some of her favorite authors are Stephen King, Grisham, Ken Follet and others…

Sometimes, I would cheat by going to a used book store and look for volumes that are in pristine condition.  I once bought a hardback book for $1 at one thrift shop.  After examining the book for any obvious marks or dog-eared pages, I bought it.  I wrapped up my used-but-new-looking Christmas Present, and gave it to my wife and she was none the wiser.  Later I told her what I did, and she was honestly impressed (or understood that we didn’t have much money back then).

Now I often buy first editions of her favorite authors on eBay.  They are not $1, but we now have a bit more money to spend on such things.  The shipping on such purchases is very reasonable, and currently (although this may change soon) there is no sales tax on item bought online (and in particular eBay) unless the buy and seller is in the same state (at least that’s the way it is in my state).

As a bachelor, I often got by at Christmas with only spending $100 on Christmas presents.  And of that $100, fifty of it was for my younger sister as a big surprise (back then the money meant more to her than it does now).  I use to get various size boxes and put the money in the boxes hidden so she had to search for it, or fight to get it out of the package.  It was a fun time and something that we both looked forward to, but now since she’s an adult, that has fell by the wayside.

How I control Christmas Costs now

Now my methods are simplified!  All I do is create a budget of how much I’m going to spend, and then try to stick to it.  If we go over, then I try to make up for it by reducing my cost for other things over the following months until I hit my initial budget numbers.  Unfortunately this happens a lot of the time…

We usually spend a bit over $1,000 now, but a lot of that reason is because we have kids!  Kids grow up quickly, and Christmas is like magic for them, so we try to make the best of it.

How I would like to Control Christmas Costs in the Future

This might not be a surprise to my regular readers, but I would like to have money invested in dividend stocks or bonds that would provide dividends or interest money at certain intervals.  This would be my Christmas Dividend Fund and I would use that money for Christmas present purchases.  Sometimes I wonder if I should have called this blog moneyreasonsfordividends.com (lol).

I’ve had the dream of a Christmas Fund that would pay for my Christmas gift purchases, even since I was in college.  I need to start this now instead of later if I ever expect to have such a thing.

Control your cost today to enable you to have more elaborate Christmas experiences and gifts in the future!
MR

Are Hybrid Cell Phones The Future?

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I recently bought my son a cellular service plan from Kajeet for $19.99 a month.

I admit that I did not want to make this purchase.  My son has an Apple iPod Touch, and with that awesome electronic device, I configured my son’s iPod to make and receive cellular calls when he is connected to a wireless router.  Included in the app is texting, so I didn’t understand why we needed to buy a cell phone, but my son insisted that he wanted one.  So we went with the Kajeet services I mentioned earlier.

At the time it was one of the cheapest yet practical Cellular Plans out in the market place.  The feature that sold us was the unlimited texting, this was exactly what my son wanted.  Overall, we’ve  been happy with the Cellular Plan from Kajeet, and the cell phone that we bought… until recently.

The latest rage is the new hybrid cellular plan from “Republic Wireless“!  It’s basically a blend of the iPod app that makes and receives calls (and texting) over a wireless router, and the cellular aspect of a cellular plan (Sprint I believe).

LG Optimus

LG Optimus

 

The basic idea is that when you are within range of a wireless router (they calculate this to be 60% of the time), you use the router for your calls, texting and for internet access.  Then the times when you are not in range of a wireless router, you use the cellular services that they provide (again, via Sprint).  It’s basically taking advantage of both technologies for an optimally frugal mix!  All for the price of $19 (yep, that’s right, it’s even cheaper than Kajeet).

The plan is unique in that the service refers to customers as members instead of customers, and if you violate the 60% too much or too long, they reserve the right to kick you out of the community.  How’s that for a different business model!

But, from what I read it seems like a fantastic deal, and I’m going to sign up for the service once they start taking new members again!

I usually don’t say this, but go check out the Republic Wireless website.  They did an excellent job with the design, and all the information is presented in an easy to comprehend manner.  I was very impressed by their presentation.

What do you think?  Is Hybrid Cell Phones the future?

The great thing about Republic’s service plan is that it’s not a long-term contract, it’s monthly and even has a 30 day guarantee.

I recently blogged about how I was considering breaking down and buying a cell phone in the article: “Frugal Confessions: I Do Not Own a Cell Phone” recently, but I’ve decided to delay that decision and wait until I can get on board with Republic Wireless instead.

What do you think, since it’s risk free, would you consider such a plan?

Tell me what you think,

MR

Having Stock Dividends Pay Money For Allowance

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Once my son and daughter turn 18 (or 21), I will stop paying them allowances.

It’s not that they were bad, or that I will have a sudden change of heart with the matter, it’s just that they’ll be adults then and traditionally that’s when such things stop.  But in ways isn’t this almost like a punishment for becoming an adult?  Perhaps at some subconscious level, it deters kids from wanting to strive out on their own, becoming totally financially independent from their parents?

Money Gift

After talking this over with my son last night, we decided to change the way that he receives his allowance.  While the details are still being ironed out, basically we going to take most of his money from his saving account and invest that amount into one or more dividend paying stocks.  The idea is that I will still pay him an allowance, but the dividend from these stocks and a portion of the money from his allowance will go into buying more stocks (along with Christmas & Birthday money along with any earned money that he might receive).  We are still working out the details, but the idea is that if we do it right, we should be able to accumulate enough stocks that pay a dividend to provide him a passive dividend stream when he turns twenty-one.  Ideally the amount would be at least $21 per week, which would match the current allowance program that I have my kids on.  Of course, I’m hoping for a higher amount to offset taxes, but who knows, only time will tell.

So what are the benefits of such a Dividend Allowance Paying program?

  1. My kids continue to receive an allowance, but instead of me paying for it out of my earned income, they will pay themselves via the passive income received from dividends.  This is one of those “the gift that keeps giving” kind of ideas.
  2. They start to learn about investments and the power of dividends and passive income at an early age.  Hearing about passive income and actually receiving passive income are two different things entirely.  Until you have passive income, it’s just a money myth.
  3. They will be able to gain investment experience, learning that stock prices go up and down with time, and experiencing recessions.
  4. The learn the concept of having your money work for you.  This will help them visualize money as a tool.
  5. I may gain kids that can talk to me about stocks, we will grow closer as we will have more in common.

Of course I can always follow a different path and invest in dividend yielding mutual funds too.  But since I not that crazy about the fund fees, for now I think I’m going to stick to individual dividend stocks in the short-term.

I really like this idea and one that I’m excited about along with my son (my daughter’s to young to get excited about it yet).

Bests,

MR

Never Lend Money To Friends Unless You Would Give It To Them For Free Anyway

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Borrowing money from friends is always a touchy matter.

Borrowing Friends like Whimpy

Borrowing Friends like Whimpy

Some people will borrow money from you continuously once you lend them money the first critical time.  I’ve even see this kind of borrowing “without repayment” action happen even between brothers.  Both brothers are good guys, but the one would continuously borrow from friends, his parents and his family.  In some ways, it’s like the borrowing brother is playing a game where money isn’t real.  It’s like he chooses to believe that the money is just paper like monopoly money, or that he’s special and doesn’t have to follow the rules and common courtesy conduct when it comes to paying back money.

Such behavior has prompted me to do the following when it comes to people asking me for money.

  1. I never have money sitting around doing nothing.  So once I get paid and have some discretionary income (money after taxes and in my possession), I try to put that money to work towards goals (usually investments).  That way when a friend (or really anybody) ask me for money I tell them that I don’t have any money on me (which is the truth).  If it’s a large number that a friend wants to borrow, I never have that kind of money sitting by idle!  By always running tight, it’s harder for a borrowing friend to slip in and take advantage of you if you have money money going to a cause (in my case it’s kid’s college funds, retirement, and goal specific tasks).
  2. Occasionally, I will lend small denominations to friends, but it’s money that’s less than $20.  When I was younger, it was $5, then later $10.  The amount has shifted as I continue to build my wealth, but it’s always a small number relative to the amount of money that I have.  I don’t see myself increasing the $20 cap that I currently use for a long time.
  3. I make sure that I get the amount that I lent back, or else I don’t lend that person any more money.  When someone comes to borrow money from me again, and if they haven’t paid off the first amount that they have borrow.  I have no problems pointing out that they still owe me money from the first $20 that I lent them.
  4. After anybody borrows money from me, I will then later ask to borrow money from them.  This puts you on the same financial borrowing level as them, and since they hate to lend money out (kind of ironic huh), they will start to avoid asking you from money.  At least this is the case in my experience.  Once I ask to borrow money from people that always ask for money from others, it’s like all of a sudden they think I’m broke all the time too.

Using the techniques above, I’ve been able to twist my way out of lending money to people, especially those that always borrow money from people but never repay the money back.

If you can think of another clever way to avoid habitual borrowers that don’t repay money back, please tell us in the comments section below!

Thanks,

MR