There are all sorts of articles everywhere that will tell you how to avoid blowing your budget…but what do you do if you DO blow your budget? Well that exact thing happened to me this weekend so now is a decent time to tackle it because lets be honest if you are part of the 99% of people that aren’t always perfect, it will happen to you at one point or another. Now Im not referring to “I got super sauced and bought a corvette from a used car dealer” kind of blown budget. More along the lines of “unplanned dinner and taxi trip” kind of thing. Anywhere from a few bucks to a few hundred.

So this weekend, I went over budget. We went down to Denver to visit some friends this weekend and I budgeted a certain amount of money for going out. One slight problem: we went out friday night with friends from work as well. This took out roughly 1/2 of the money I had planned for the weekend (I was expecting to spend only a few bucks friday night). Long story short I kept to budget until about 10 PM when we decided to take the light rail to a karaoke bar. If you haven’t ever been to a good karaoke bar with a huge group of fun people, I highly recommend it. So anyway four hours, one rendition of The Bad Touch (complete with dance), one rendition of Beat it (complete with attempt at dance) , taxi ride, and taco bell meal later I was roughly $125.00 over budget.

So what to do?
Well, the trick is that you should always put aside money each month for “unexpected expenses.” Aha, but I ALREADY used my set aside money.

So what now?
Its painfully obvious but should be pointed out anyway; cut back for this week, eat a few more meals at home, don’t go out next weekend.

For the sake of argument lets say you are already living perfectly frugally, what else can you do? Well there is a little trick called payment shifting. I don’t recommend it except as a last resort. Its this: you postpone when you pay a certain bill so that it coincides with the next paycheck. An example is, I get paid on the 1st and the 15th of every month. My mortgage is due on the 16th of the month. I pay my mortgage with money from my first paycheck of the month, if I had a situation where I was behind I could use my second paycheck of the money, effectively buying myself an extra 15 days worth of money if I needed until I had a chance to make back up the original money that was overspent.

By no means am I advocating blowing your budget but we are all human (even Michael Jackson, despite outward appearance) and mistakes happen. The real takeaway is that if you make one mistake do NOT get discouraged and just start putting things on credit card that you cannot pay off or give up on budgeting.

Well, they are exactly evil, I mean they are actually a modern marvel. Can you imagine telling someone a couple hundred years ago that you could someday go to one store and it would have every food from everywhere in the world? Unfortunately, this is also what makes them a trap. Heres a question to ask yourself: how do I shop?

Until recently I shopped by the “instinctive food gathering principle” which as it turns out, really means “spend tons of money on crap I probably dont need just because it sounds good.” It doesn’t help that they arrange things specifically to mess with you… in any case I would go to the store for toilet paper and come back with some drinks, chips, mens health, some fruit, a ribeye, cottage cheese (because I somehow always convince myself that I am out, even though I never am), ice cream or pizza, and who knows what else. Except toilet paper. I’d almost swear there are voices whispering in my ear to buy crap I don’t need. Anyway Ive come up with a list of things that has drastically reduced spending and the amount of time I spend in the store.

1) Make a dang grocery list. It takes two minutes, do it! I know you are saying “uh Jesse I can remember what I need” and you are probably right, but not only will it help you get what you do need but because it gives you direction you will be less inclined to pick up other random things.

2) Don’t wait until you are out of things to go to the store. A lot of times this creates a huge rush situations. A great example is needing milk in the morning to eat your cereal. When you start to get low on things, make your list and go…you’ll know exactly what you need and there won’t be any guessing involved.

3) Stick to one store if you can so that you can go directly to the aisles you need to go to. Wandering up and down the aisles is frustrating and leads to picking up more than you need.

4) Use coupons. I know, I get pictures in my head of my grandma cutting out coupons medituculously for 2 hours too…but really you can save a lot of money. And some places like King Soopers will give you coupons based on stuff you just bought with your receipt. nice-a!

5) Plan out some meals in advance. If you don’t feel like eating your planned meal you can always change it.

6) Eat healthy. As it turns out if you eat healthy stuff you can eat as cheaply as just getting junk. I eat kashi for breakfast with milk, then a mid morning protein shake, then a lean pocket for lunch, then some fruit and a pb&j sandwhich, some chicken for dinner and a post workout protein shake. All of that together can cost less than $5/day. Of course I dont always eat like that but its a good example.

Ok so there seems to be a lot of confusion around the Health Savings Account that the government is now allowing. So I figured it would be good to go over the kinds of medical savings accounts currently available and point out the differences. First of all some definitions:

Health Savings Account:
Its a tax-advantaged medical savings account available to taxpayers who are enrolled in a High Deductible Health Plan (HDHP). The funds contributed to the account are not subject to federal income tax at the time of deposit. The funds in the account can be used to pay for qualified medical expenses at any time without having to pay taxes on them. Withdrawals for non-medical expenses are treated very similarly to those in a retirement account in that they provide tax advantages if taken after retirement age, and they incur penalties if taken earlier. These accounts are a huge part of consumer driven health care.

Health Reimbursement Account:
These are accounts that allow an employer, as agreed to in the HRA plan document, to reimburse for medical expenses paid by participating employees. HRAs reimburse only those items (copays, coinsurance, deductibles and services) agreed to by the employer which are not covered by the company’s selected standard insurance plan (any health insurance plan, not only high-deductible plans).

Flex Savings Account:
This is actually similar to the other two but it is offered with more traditional (such as the 80/20) plans as well.

These are all (FSA being the slight exception to the rule) consumer driven health care plans.

What is a consumer driven health care plan?
It is a plan that allows members to use personal income to pay routine health care expenses directly, while having a high deductible health insurance plan that protects them from huge (catastrphic) medical expenses. Its called “consumer driven” because it gives patients greater control over their own health. It also makes consumers more health care cost conscious…though in more of a good way. For example a study showed that people with chronic problems were 20% more likely to follow their treatment regime carefully if they were part of a consumer driven plan.

What is the main advantage?
There are many advantages and some disadvantages but the main advantage is that it is before-tax money. So if you do not use health care much, you will save a good deal of money in the long run.

All of that being said here is an overview of the differences:

There seems to be a lack of information around on these types of accounts so I hope this helps clear things up a bit. I personally am going to open a health savings account for next year. My employer pays for everything for a high deductible plan, and I am currently on an 80/20 plan but I just don’t go to the doctor very often despite a very serious injury from a few years ago. I especially like that it can be rolled over into retirement and that it can sit and collect interest.

Because I don’t go to the doctor, I have one fixed monthly medical cost: $69/month for propecia. Now, I have all my hair. My dad has no hair (not that he looks bad, I’d like to just wait until I can pull off the “Im old and bald but I am a BA” ala Patrick Steward/Bruce Willis). I decided Id like to keep mine for a while, so propecia it is. Thing is, health insurance doesn’t cover it, so its all out of pocket. If I used a health savings account this WOULD cover it, so by using that to pay for it every month I would effectively be giving myself a $30+/month raise.

Of course this banks on no huge medical bills, but I figure this is the only time in my life that I could get away with that. Maybe you can too.

There are some things in life you should save money on. There are other things you most definitely should not try to save money. These are those second things:

8] Toilet Paper
I really shouldn’t have to explain this, but for anyone that has ever worked in an office, if you buy that same stuff for your house, you are a masochist. I promise you the extra two dollars you spend on angelsoft or whatever will be probably the best two dollars you have ever spent in your life.

7) Mouse
Whats more annoying than a new cher album? More aggravating than waiting in line at the DMV? How about a cheap mouse. Unless of course you like choppy scrolling all over the page, clicking the wrong buttons, and carpal tunnel. All fun. And people who used photoshop during the time of ball mice deserve some sort of lifetime achievement award for patience.

6) Pens
I could never understand the obsession some people have with pens. I borrow a pen from a coworker or another student and they would say “make SURE you bring that RIGHT back” and I smile and say “sure” and think “HAHAHAHA whatever” because I am a jerk like that. Turns out, as i’ve been writing more, I hate bad pens. And ever been writing a check in a hurry, say because you need to mail your mortgage and the mailman is outside and your pen stops working? Oh and then you look in the drawer, no pen there either. Ok you get the picture.

5) Mattress
Good night sleep means productivity. A good mattress means a good nights sleep. Use your logic skills to figure the rest out.

4) Beer
Because if you are going to drink it, make it worth it.

3) Laser Eye Surgery
Seeing ghosts and funny colors for the rest of your life sounds sort of psychotic break inducing. Oh heres some other possible problems: double or triple vision so severe patients can’t watch TV or read, light distortions so blinding they can’t drive at night and eyes so dry that goggles must be worn outside. “Hey, your goggles are fogged up man” “Yeah its ok though, even if they weren’t Id see three of you anyway….assuming of course Im not blinded by the light.” Dear Lord.

2) Engagement Ring
Nothing preps you for a life of unhappiness and the label of “cheapskate” like a cheap engagement ring, perhaps bought online on an ebay auction. Thats like having a “shoot insult here” target painted on your butt for your entire marriage ….and in case you don’t remember, marriage is a long time, like life (well for 50% of the population). Oh and its great feeling like a chump when all her friends check out her teeny little rock and scratched up gold.

1) Skydiving lessons
For nearly everything, there is a reason that it is cheaper. And after all: what is the difference between a bad golfer and a bad skydiver? A bad golfer goes “whack……….damn” and a bad skydiver goes “damn……whack”

Remember, personal finance is managing your money, not being cheap.

This article will save you thousands, I promise you.  Number one alone is a monster.  Now here are some ways to save money on your car that you probably  haven’t seen around the web that I have learned through trial, error, and driving everything from the worst beater you can imagine (an old datsun 210 that looked like a lemon) to a new sports car.

1) If a light comes on on your engine that says “Service Engine Soon” Don’t rush over and pay $100 (I have made this mistake) for the local dealership to tell you whats wrong.  Go to autozone and they will give you the code your engine is throwing FOR FREE.  Then go home and google the code.  You can save yourself hundreds, even thousands of dollars doing this.

2) Do not use the dealer to make repairs unless you absolutely have to.*  This is especially true on older cars because they are much less complicated as far as electronics go.  However even on new cars independent repair shops generally will be just as good and charge hundreds or even THOUSANDS less.  The trick here is to make sure and find a reputable repair shop in your area.  As your friends and coworkers if they know of anything and if all else fails try the internet.

3) Whatever you do, do not buy an extended warranty.*  There was a survey done and the extended warranty was worth it only 1 percent of the time. Ouch.

4) Take your car to jiffy lube or do your oil changes yourself.  There is nothing magical to doing an oil change, anyone can do it if you read up on it.  On the other hand Jiffy Lube does it for 40 bucks.  At a dealer you will usually pay over 100 dollars.*  Ridiculous.

5) Do not buy premium gas unless your car HAS to have premium gas.  This will save you hundreds.  There is absolutely no advantage to using a higher octane gas if your car isnt knocking (making a click click or clunk clunk noise) when it is running.  It is not a special treat that will make your car run better.  I know in some parts of the country the LOWEST octane you can get is 91.  I promise you you will never need higher than 91 octane as far as current gasoline cars go…and thats the mechanical engineer in me talking not the personal finance guru.  Worst case scenario lets say you live in colorado like me and you put 87 octane in your new high compression engine and it knocks a bit.  Go grab an octane booster from autozone, or fill the rest of the tank with 91, and problem solved.

Hope these help, I know there are a lot of tips out there “inflate your tires to the correct pressure” “change oil <x> miles” whatever, we’ve all heard them; take these ones to heart and you will save even more.

My girlfriend and I walked into king soopers today and there were (see right, we took a picture) literally swarms of guys looking for a last second present for their girlfriends/wives. As we walked by they had prices listed. Roses were $10/piece! ouch! There was the “super deal” of a dozen for $70. Thats right, for a dozen roses. Wow. So we came up with some better ideas that don’t involve you spending $70 for a bunch of wilty overpriced flowers.

1) Plan and make a romantic dinner
You don’t have to spend 50-100-200 dollars just to have a romantic meal. This is great too because it gives a lot more freedom on what you want to eat while spending just a fraction of the cost. Very few women would prefer a cookie cutter restaurant date over a thoughtful dinner at home.

2) Do a scavenger hunt around the house. Cheap, fun, easy.

3) Bring the movie theater home…just get a movie, some popcorn and a variety of snacks.

4) Hide little presents throughout the day where she will find them

5) Make a mixed tape..errr CD of meaningful songs

6) Wait till weekend do something special. Celebrating on a weekday can really cramp the fun, so why not wait till weekend and do something fun during the day.

7) Have a massage and hot bath waiting.

8] Clean the house - my girlfriend is adament that this is a turn on for women

9) Have a wine and cheese sampling

10) Buy your flowers and card ahead of time…you don’t pay as much, and you can be more thoughtful and thorough about what you pick out.

I’m always on the lookout for things that can save energy costs because if it doesn’t affect the quality of life, then its just wasting money. Todays top: turning down the thermostat. Now, don’t get me wrong, I am not saying all the time. In fact I hate sitting around the house being cold…who doesn’t? But really, how about when you are sleeping? Or how about when you are at work during the day? In our case the dogs are still home, and they are definitely princesses, but they do have fur. Speaking of dogs, does anyone else have one that loves poop? Our puppy Sabra’s proudest moment was when she came in from outside, trotted up to me wagging her tail like crazy and triumphantly dropped a nice dried up frozen turd at my feet. Anyway back to finance….

According to the Rocky Mountain Institute, for every 1° you lower your thermostat, you save 2 percent in energy costs. So lets say you lower your thermostat for 8 hours while sleeping and 8 hours while at work. Thats 16 hours a day, exactly 2/3 of the day. 2/3 of 2 percent is 1 and 1/3 percent. Lets say you keep your house at 70 (a fairly common temperature). Here in Colorado heating a 2k square foot house with gas can cost up to $2000.00/yr. Lets say you were to lower your thermostat to 65 at night and during the workday:

Annual heating and cooling costs(before): $2000
Percent savings from adjusting thermostat: 6.67%
Annual savings: $133

Lets day you decide to turn it down to 60 while sleeping and away:

Annual heating and cooling costs(before): $2000
Percent savings from adjusting thermostat:13.33%
Annual savings: $266

Makes sense eh? If you go to the extreme you can save probably up to about 35% assuming a baseline of 70. Thats up to $700 in a year. Mind you I wouldn’t want to turn my own thermostat down that much. All of this becomes much MUCH easier if you have a programmable thermostat. My house doesn’t have one, and I will have to look at my girlfriends house to see if hers is (I think it is; she has a new house and I probably just made work for myself writing this article heh heh). They aren’t much to buy and will pay for themselves in less than a year. Now go!

What has she taught us about money? Its not that money can turn a slightly spoiled hollywood teen into a psychopath, though you could probably make that argument. No, instead it is she has taught us:

“Im a slave for you”

I have a friend that recently has crossed the line from frugality into cheap…in his obsession to save money he has stopped doing anything worthwhile. Everyone has a friend that sometimes fits into the category of Mr or Ms Cheap. You know, instead of the Teddy Roosevelt of frugality, they cross the line into Ross from friends, taking salt out of the hotel salt shaker and unscrewing light bulbs. Ok so my particular friend hasn’t reached that point yet but many people have. They have become slaves to their money.

Just for fun, lets go over Mr Cheap ala Ramit’s definitions.

Mr Cheap:

Mr Cheap lets his friends buy all of the rounds at the bar
Mr Cheap refuses to lend you dollar when you are one dollar short for lunch
Mr Cheap buys things simply because they are cheap
Mr Cheap affects everyone around him
Mr Cheap dismisses ideas because they cost money
Mr Cheap is upset when his friends decide to do something that costs money

Worst of all Mr Cheap drinks PBR. Terrible.

So What is the point? Your friends suck?

No. The point is that you never want to get to the point where you are no longer controlling your money, but it is controlling you.The whole point of personal finance is to manage your money so that you can life a good life. When your money is controlling you, it is one of the most stressful situations possible. Even if you are in debt badly you should be able to allocate at least a small amount of money for fun and entertainment. Pay yourself first. The dog should always wag the tail, never the other way around.

There was a new carnival of frugality today, so I figured in honor of super fat tuesday Id post some super phat links for the day to stuff that I use all the time.

First the blogs I read every day: I will teach you to be rich, Mrs Micah, Get rich slowly, John Chow, No Credit Needed

Next some useful links: Credit Card Ratings, MSN Money, EOpinions, Adult Facebook errr LinkedIn, Google Finance

And finally a bunch of financial links:

AUTO

CarBuyingTips.com, www.carbuyingtips.com

-Free information on buying new and used cars, leasing, and avoiding auto scams.

CarFax, www.carfax.com

-See the history of the car you are considering

Edmund’s Publications, www.edmunds.com

-Consumer information experts. Easily run comparisons on new and used vehicles.

Fighting Chance, www.fightingchance.com

-For $34.95, you receive complete pricing data on the vehicle you’re considering, plus its record in the market place, available cash incentives, negotiating tips, and access to a “live” purchasing coach.

J.D. Power & Associates, www.jdpower.com

-Automotive marketing research

Kelley Blue Book, www.kbb.com

-New and Used vehicle pricing reports

LeaseSource, www.leasesource.com

-Automotive research with calculator to lease or buy a car

EDUCATION

Finaid, www.finaid.com

-A comprehensive site that covers all aspects of financial aid.

National Center for Education Statistics, www.nces.ed.gov/ipeds/cool/search.asp

-Information on past three years of college/university costs

Salliemae, www.salliemae.com

-Calculators for estimating college costs, savings needs, and student loan payments as well as a great deal of financial aid and scholarship information.

INCOME TAX

IRS Website, www.irs.ustreas.gov

-The IRS Website, information on forms, publications, and frequently asked questions.

INVESTMENTS - Discount Brokers

ShareBuilder, www.sharebuilder.com

-Discount broker with auto building plan. I really like this one.

TD Ameritrade, www.tdameritrade.com Updated!

-View account balances, market news, and other services offered by the discount broker.

INVESTMENTS - Financial News & Quotes

Bloomberg, www.bloomberg.com

-Financial market news and stock/mutual fund quotes

CBS MarketWatch, www.cbs.marketwatch.com

-Financial market news and stock/mutual fund quotes

CNN Financial News, www.cnnfn.com

-Financial market news and stock/mutual fund quotes

Google Finance, finance.google.com/finance

-Everything you need

Money Central, www.moneycentral.msn.com

-Financial market news and stock/mutual fund quotes

Yahoo, finance.yahoo.com

-Keep track of your overall portfolio and get detailed charts on your individual stocks and funds

Welp, lunch break is over, back to real work. Enjoy.

So I saw something on the binary dollar that I absolutely love.  Its a how to get rich Venn diagram…however I thought that they left out one huge thing.  Their two points were make lots of money and save lots of money.  I decided to take it one step further (anyone hear the money truck coming?)

Ah yes, beautiful.