Two nights ago my fiancée and I discovered that the carpet in the upstairs office was a little damp. After a little investigating, we discovered that the wall was soft! We tore down the drywall, removed the soaking wet insulation, and realized that our roof was leaking. After a restless night, I woke up the next day, called up three contractors, and eventually had some repairs done. The culprit appeared to be the flashing around the chimney and the tin covering on the chimney. The final bill was $675 (though I worked out something with the contractor where I’d get that rebated back on a full blown roof replacement, which I know I’ll need) and a weight off our shoulders. I still need to replace the insulation, drywall, and paint that office… maybe the painting will happen after the honeymoon. (I’m also a little hesitant to put everything back up in case our repairs didn’t solve the problem…)

Ugh…

On a happier note, I discovered a cool site called FreeRice.com through BzzAgent. I’m a BzzAgent, which means I occasionally get free products, give them away to my friends, and write about their reactions to them (if you want to join, email me). I’ve given away gum, yogurt, etc. etc. Anyway, one part of the site involves talking about cool websites that have tried to improve their online exposure through BzzAgent. Until today I hadn’t written anything about any of them because they didn’t really appeal to me, until FreeRice.com. You answer multiple choice vocabulary questions and they donate 20 grains of rice for each correct answer. You don’t sign up for anything, they don’t send you anything, and they donated 149,541,380 grains of rice donated yesterday (Valentine’s Day). Give it a whirl, maybe you’ll learn a few words and someone gets a bowl of rice.

Diamonds are a girl’s best friend! And if you bought into the marketing slogan and got your sweetie a diamond (or anything with a diamond in it), you may be able to recoup some of the cost in a settlement. De Beers was charged with cornering the diamond market between Jan 1, 1994 and March 31, 2006 and recently settled for $295 million. Of the $295 million, $135 million was earmarked for consumers with the balance going to wholesalers. Check out their press release statement on the issue.

How Much Do I Get

Unfortunately, because it’s unclear how many people will make a claim and because the lawyer fees haven’t been published, the table (published on MSN Money) is just a maximum value and not what you’ll likely see. $135M spread across all the diamond purchases over the course of eight years is not going to amount to much. In fact, if your prorated share of the settlement is under $10, they won’t even send it to you because of “prohibitive administrative costs.”

The minimum payout is $10 and the maximum is $640 (the Recognized Claim Amount). If you bought a lot of diamonds, the maximum you can receive is the Recognized Claim Amount of $640.

Should I File?

Considering the $10 rule, you may want to reconsider whether to spend the time to file. This is what they recommend: “As a general guideline, if your total purchases consist of Mixed Stones Jewelry with combined purchase prices of $165 or less, or Diamonds Only Jewelry with combined purchase prices of $95 or less, your claim will not reach the payment minimum amount of $10.00.” Now, is that just the lawyers wanting a bigger piece of the pie? Is it just there so people don’t dilute the pool? Who knows, that’s up to you to decide.

How To File

To file a claim, visit the online claim form or fill out the PDF form and mail it back by may 19th.

If you claim less than $10,000, you don’t need to provide proof right now but you might need it later. If you claim more than $10,000, you have to include a copy of a document that shows the specs of the diamond (what’s essentially in an appraisal). Good luck!

(Photo: salreus)

A few weeks ago we booked our tickets to Hawaii, where we will be spending our honeymoon, and we had a quick little $60 decision to make. On the way back, we have the option of two flights:

• $390: Departure at 11:50pm, arrive at 6:30pm, or,
• $330: Departure at 10:50pm, arrive at 7:30pm.

The two flights were similar otherwise (the first had one extra stop, but you never deplaned and second flight had a longer layover) so the difference was in just the flight time and departure times. The first flight was $60 more expensive but we were able to stay in Hawaii an additional hour and we arrived at home an hour earlier. So, which flight did we choose?

We chose the more expensive flight. This was probably one of the first times in which I’ve chosen convenience over cost when the two choices were so similar. In this particular case, there were reasons to pick the more expensive flight outside of the characteristics:

• Landing at 6:30pm: We will be tired from our trip and having an extra hour of “home” time before going back to work the next day will probably help tremendously.
• Fewer hours total: This was the only real trade off, paying $30 an hour to save that travel time really cuts down on fatigue.
• Later departure: By leaving at around midnight Hawaii time, it lets us enjoy the full final day in Hawaii. It also let us have a nice leisurely dinner prior to our departure. If we were to leave at 10:50pm, we’d feel compelled to arrive at the airport by at lets 9:30pm, which means we’d have to leave our dinner by 9 (depending on how far away it was). If we plan on having a nice dinner, that means we have to eat by 7… so for a little extra we can take our time and have more breathing room.

How do you go about deciding whether to take the cheaper option or the more convenient option?

This offer has ended.

Oprah is giving away free digital copies of Suze Orman’s Women & Money until 8pm (7pm Central) tonight (February 14th). (Direct download link) A Spanish translation of the book is available as well.

This book is copyrighted. You may view and download the file, but you may not copy the file or share or forward it to any other person.

A trimmable expense is an expense that fulfills a want rather than a need. Buying fruits and vegetables is not a trimmable, buying chocolate covered fruits is a trimmable. While you could try to go through all of you expenses and try to eliminate everything that is discretionary, you may find yourself enjoying life less and less. Trimmables, while fulfilling wants and not “required,” are there to help you live life and enjoy the fruits of your labor.

So, rather than cutting out some of your trimmables, consider reducing your trimmables in terms of quantity or frequency. Spa treatments are sometimes seen as frivolous but if they are valuable in reducing stress, then cutting them out entirely may not be a smart move in the long run. If you go every week, consider visiting every other week. If you go every other week, consider going every three weeks. Don’t cut it out entirely, reduce it so that you can save a little but not lose the recuperative effects.

Some trimmables you might want to reduce with the intent of eliminating them all together. Don’t make that decision now. Just reduce it a little and see if you lose any of its benefits. You may find that the less frequent visits help you look forward to them. You may find that you still get all the recuperative effects and that those bi-monthly visits were unnecessary. You may find that your sweet spot is really at once a month, rather than twice a month. So, you could be enhancing the experience while saving your money.

Also, you could discover that you need to go every two weeks - that’s fine. Rather than thinking you need it twice a week, you now know you need to go because you’ve tried once every three weeks or once a month and it didn’t work. Simply give yourself the opportunity to reduce it a little so you know for sure.

Finally, reducing something is far easier than eliminating it. Quitting cold turkey is practically impossible and impractical as a means of quitting something, reduce it until you hardly miss it. If you love that Starbucks and need it every morning, try cutting it out of your day once a week and replace with it regular coffee or with some tea. You may find that Starbucks’ hold isn’t as firm as you once thought! Or you may find that you like tea more than coffee, you never know until you try.

Reduce something today!

Valentine’s Day is tomorrow and it’s a day when many men and women will spend hundreds or thousands of dollars on gifts, activities, and other acts of lavishness in the name of love and affection. If you’re one of the many procrastinators out there, you probably will pick your gift today. However, have you ever considered that the object of your affection has no interest in objects whatsoever? Have you considered that he or she may actually prefer quality time over a trinket? What I’m talking about is a concept known as love languages and one that my friend Fred (who writes at a home improvement blog called One Project Closer) mentioned to me today. The concept of Five Love Languages was popularized by one Dr. Chapman and you can discover your love language in a mere thirty seconds (it’s actually far quicker).

So, why am I writing about this? So many people erroneously think that gifts are the way to a person’s heart, by this I really mean mostly men (but some women). A lot of guys think that if they spend a lot of money then they can get away with something last minute that requires very little thought. I know a friend who, when he thought his girlfriend would be upset, just ran off and bought a bathrobe and some perfume for her (I have no idea if it worked but it did cost him $60). For some people, that works. For others, it’s never going to work. Understanding the love languages is crucial to ensuring that you’re spending money and effort in a way that the recipient will fully appreciate and react favorably to.

Now, back to the five love languages. They are:

• Words of Affirmation - People who speak this language respond most favorably to words of encouragement, compliments, and other acts of verbal kindness.
• Quality Time - People who speak this language respond most favorably to spending quality time with their loved ones.
• Receiving Gifts - People who speak this language respond most favorably to gifts and visual symbols of love.
• Acts of Service - People who speak this language respond most favorably to favors and things that their partner does on their behalf, regardless of size or significance.
• Physical Touch - Vavavoooom baby. Actually, it’s more than that but you get the idea.

How do you apply this? Well, if you know that your partner responds more favorably to acts of service, then you know that buying him or her a lavish gift just isn’t going to get the results you want. If your partner wants quality time, give him or her quality time… not high fives or a congratulations on a job well done. And if your partner wants physical touch, heck it’s Valentine’s Day, touch them.

(Photo by carowallis1)

Becoming a millionaire used to be hard back when gum was a penny and comics were ten cents. Now that a pack of gum costs a buck and comics suck, becoming a millionaire is much easier but still a laudable goal. Don’t believe me when I say that becoming a millionaire is easy? I’ll give you six easy steps that, if you have the diligence and the discipline to discard the temptations of a world filled with easy credit and consumerism, will leave you a millionaire. $1,000,000 buckaroos. If you don’t follow them, you’ll likely have to start a dot-com that Google will buy or work 16 hour days and climb that corporate ladder (that’s if you don’t hit some glass ceiling because you’re not in the old boys network).

Many of these ideas are so simple the could make you crazy. None of them are sexy. None of them have you racing down the autobahn in a convertible going 150 MPH. None of them have you throwing dice in Vegas and none of them involve games of poker against James Bond. That’s part of the reason so few people do them… that’s exactly why if you do them you will become a millionaire.

Step 1: Participate In Your 401(k)

If you contribute a meager $3,000 a year to your 401(k), get no match, and it appreciates at 8% a year - after 40 years you will have a balance of over $777,000 on contributions of $120,000. That one little step gets you three quarters of the way there. That one little step that anyone with a job can, and should, do (if you don’t have a job, becoming a millionaire will be very difficult) immediately. Unfortunately, the purchasing power of that $777,000 in 2006 dollars (assuming 3% inflation), will only be $238,000 so we still need some more help to get to the millionaire status but we’re well on our way to millionaire status.

Step 2: Contribute To A Roth

The Roth IRA and it’s tax-free growth is one of the best investment vehicles out there. It also diversifies your tax profile when it comes to retirement because it balances out for your pre-tax 401(k). If tax rates go through the roof, you still have a Roth IRA to tap into tax free. What’s unfortunate is that if your salary keeps increasing, there may come a time when you reach the phaseout contribution limits for the Roth IRA so get your contributions max’d out as early as you can.

Step 3: Find Another Source of Income

Whether it’s selling knick-knacks, performing some freelance work, writing a blog, or taking on a second job; increasing your income and saving that extra income is yet another way to get your precious net worth into the seven figure range. Take that extra money and put it into a brokerage account (if you have no debt) and watch it grow. Since this second income isn’t “necessary” or “expected,” putting it all away should be trivial and something your future self will thank you for as he or she sips mai thai’s in Waikiki.

Step 4: Cut The Fat (Your Budget and Your Belly!)

Do you really need some of the things you always buy? Consider taking a little breather on Netflix and save some cash. Look for some trimmables in your budget and cut them out. Much like losing weight, it’s far easier to reduce your spending than it is to increase your income. If you don’t buy that cup of coffee, you can save yourself $2. Can you think of a quick way to make $2? Probably not.

Step 5: Cut Down On Fees

Adding just half a percent in fees severely reduce the appreciation of your assets. In the earlier example with the 401(k), I did the math and said you get $777k after 40 years at 8%. If you were to add a half percent annual fee, you end up with less than $675k after 40 years instead of $777k. If you add a full percent in annual fees, your nest egg is now worth less than $587k. One percent in annual fees results in a difference, over 40 years, of nearly $200,000. If all other things are equal, find yourself a cheap fund!

Step 6: Buy A House, Then Rent It Out

At one point or another you’ll probably want to buy a house and live the American dream (it’s become the American nightmare for some now!). Be smart about it and don’t overpay, don’t get rushed, and you could be unlocking one of the great wealth building strategies. As they say, they aren’t building any more land. When you buy, remember that after you live in it for two years, you can sell it and the profit is tax free as long as you buy another home with it. If you don’t want to sell, consider renting out the home. In renting, you can go after positive cash flow or just tread water, content in banking on the appreciation of the home at a later date. Either way, it’s a great way to leverage your assets into something bigger.

There you have it, six powerful steps that will turn you into a millionaire in no time!

(Photo by tychay)

Looks like it’s about time to start buying those Forever Stamps now! The United States Post Office announced today that they’ve decided to increase the price of first class postage by a penny to forty-two cents, effective May 12th. Less than a year ago the USPS increased the price of a first class postage stamp by two cents to the price of 41 cents, all within its newly granted rights of being able to increase it within the rate of inflation.

With inflation at 2.9% last year, the USPS was allowed to increase the price of a stamp by a penny without any oversight as long as they give 45 days notice (they plan on giving 90 days). I don’t know why anyone (or even businesses) would need 90 days to react to a price hike but I guess that’s considerate of them.

Here are other notable increases (or unchanges):

• Each additional ounce of a letter will remain an extra 17 cents (no change).
• Cost to mail a postcard increases to 27 cents (+1 cent).
• Large envelope of up to two ounces will now cost $1 (+3 cents).
• Money orders up to $500 will remain $1.05 (no change).
• Certified mail will now cost $2.70 (+5 cents).

If you haven’t picked up a few of those Forever Stamps, now’s a good time to buy some. I hardly mail any letters nowadays, mostly cards, and I probably won’t be getting any of Forever Stamps myself (too many leftover stamps from the wedding invitations and RSVP cards). I think that the USPS needs to rethink its strategy if it really wants to remain competitive in the shipping game. However, based on the behavior and performance of the staff at most post offices I visit, it’s clear that competitiveness is hardly a concern (government subsidies don’t hurt either!).

(Photo by aa440)

If your employer offers any tuition reimbursement and you’re not taking advantage of it, you’re leaving a tremendous amount of value on the table each year. In the two jobs I’ve had since graduating college in 2003, I’ve been lucky enough to be offered the opportunity to pursue higher education in return for sacrificing some of my time. At my first job, every educational dollar I spent was fully reimbursed (you were only allowed to take two classes a semester, or six a year) with no requirements afterwards. In my second job, I was afforded $5,000 a year with some continuation of work requirements. Through both programs I was able to get a majority of my MBA paid for (ooooh, an MBA!). In both cases, I took advantage of them to the fullest extent possible and if you have this opportunity, you should too.

Time on the Side of Youth

I can understand if you don’t take advantage of it because you have children to care for and a family to attend to, those are perfectly acceptable demands on your time. If you’re young and have an abundance of time and a limited amount of responsibility, you’re doing yourself a tremendous disservice by not taking advantage of this. After work each day, how do you spend your time? Do you spend it lounging in front of the television? Do you spend it drinking at the bar? Unless it’s volunteering or working towards a higher purpose, I would recommend swapping at least one night of drinking and lounging with a night of classes. After a couple years, you’ll have a degree instead of nothing (or a beer belly!). One night is not too much to ask in return for shifting your path.

Consider It Compensation

Give yourself a raise by taking these classes. In fact, when you’re done, you can take your more competitive resume out into the marketplace and give yourself a second raise. I took twelve classes at my first employer over the course of two years. Each class cost approximately $1,500, so I gave myself a $9,000 a raise onto my base pay each year. In my three years of working for that company, my salary when I left wasn’t even $9,000 higher than when I started! After you are awarded your degree, shop yourself around. Your job isn’t your girlfriend, you can date other jobs.

If your current employer has an attendance requirement, as in you have to stay in your job for a period of time or repay the tuition reimbursement, you can stay on until that’s fulfilled or you can ask prospective employers to give you a bonus for that amount. Good talent is extremely difficult to find, paying a few dollars more to get someone into the door is worth it for a business that’s seriously considering you.

Take Electives to Expand Your Horizons

Don’t want to commit yourself to a full blown degree? Not a problem, signing up for a full menu of classes may be too much for you right now. Consider taking a few electives in your spare time, electives that will expand your horizons and give you more breadth of understanding in your field. Oftentimes the full menu of classes for a degree contain classes that are too basic and broad. This is especially common in programs designed to generate revenue for a college (think part-time MBA!). Does an MBA student really need a remedial statistics class or a basic economics class? Taking electives should give you a laser-focused area of study that you will find immediately applicable.

Networking, Networking, Networking

While education is important, networking is more important. I had a friend whose brother went to an excellent school. It’s a top notch university that has an extensive history of extremely famous and accomplished alumni. My friend’s brother’s roommates were All-American athletes, the children of officers in the armed services or politicians, or ridiculously brilliant. Sure, the school was “tough” but there was a fair amount of grade inflation and a fair amount of intellectual and athletic competition. That institution is a little school in Boston, MA known as Harvard University. (true story, at least as told by my friend)

There are many reasons why you should take advantage of tuition reimbursement plans, I listed only a few. Many people don’t have the benefit of these programs and would give up a lot to be able to have their education partially paid for, please don’t squander the opportunity unless you have a very good reason.

(Photo of Wean Hall at Carnegie Mellon University, my alma mater, by carbon451)

Today must be emergency fund day because earlier this morning I talked about how you shouldn’t rely on credit as an emergency fund; now I’m going to remind you that you should adjust your emergency fund limits based on any changes in you or your environment.

Having an emergency fund is one of the cornerstones of a solid personal finance plan. Whether you subscribe to the three month, six month, or full year’s worth of expenses, an emergency fund is something that every single person and family needs. Emergency funds enable you to weather the difficult times, especially since they all seem to cluster together, without putting you in an even worse situation. Some people rely on credit cards to supplement the emergency fund and others will only rely on credit cards at the last moment, but ultimately you need to have an emergency fund that matches both your needs and the chance of a Bad Thing happening.

The first part of that last sentence is pretty well understood by people who have emergency funds. Most people are very aware of their own needs and how it affects their emergency fund. If you buy a house and have to service a mortgage, it’s clear that the emergency funds requires additional padding. If you have a child, most people recognize that the emergency funds need to be boosted to weather any additional crises that come with children. For those of you who understand risk analysis, the part people understand best is the impact or severity of a risk.

The part people are less cognizant of is the second part. In risk analysis, we’re talking about the probability (as opposed to the severity) of a risk occurring. Specifically, we’re talking about people changing their planning as the probability changes. For example, the onset of a recession increases the likelihood that you will be fired or laid off. While the severity of being fired remains the same (you lose the same amount of salary regardless of future he economic prognosis), the probability increases based on the economy and the industry you’re in.

So, how do you do this? Periodically sit down and re-assess your financial plans. Check out your retirement accounts, check out your bank statements, and check your emergency fund. Think about whether the environment has changed and whether you need to increase or decrease your emergency fund. Now, if you think a potential recession will increase the chances you’ll be fired, boost your emergency fund. You’re essentially self-insuring against being fired (and other negative events). As long as you recognize that the environment has changed and your emergency fund needs to as well, you’ll have done what you can to help weather any potential downturn. You can’t predict the future but you can at least prepare for it as best you can.