Insurance, Investing 

Keep Investments & Insurance Separate

I had a meeting with my accountant last week to discuss some business related items and we got on the topic of insurance, specifically life and disability insurance. He told me that his personal philosophy was to keep insurance and investments separate. The reason for this is that when you start mixing insurance and investment, you start muddying the waters and things become much more difficult to keep track of.

When it comes to insurance, he buys term life insurance. Term life insurance is the simplest type of insurance, you pay a premium for a set period of time and they pay out if you die. There is not an investment component and it’s a very simple concept. When I looked at four types of life insurance (term, whole, universal, variable), it confused me to no end. Generic terms, that are barely descriptive because they are so generic, tied to specific plans really mess me up.

Is this the most financially efficient method? I don’t know enough to know. Is it a clear, easy to understand, easy to execute plan with little room for error? I believe so. I prefer a plan I fully understand and can execute without problems over one that is half a percentage point more efficient that I could potentially screw up.

 Personal Finance 

Four Appliances Worth Replacing Early

A few weeks ago we replaced a relic of a dishwasher (a Whirlpool made in the early 80’s) with a new Frigidaire model (the FDB2810LDC) for a mere $150. We weren’t in the market for a dishwasher at the moment but it was certainly on our To Do list. From a functional perspective, the Whirlpool was serviceable. It still worked, though the seals weren’t very good (ants could get inside, but no water leakage) and it was very loud. From an ecological perspective, it consumed a lot of water and electricity, since it was made in the Days of Yore™ before Energy Star was in vogue, so there was a financial incentive outside of the $150 price.

Dishwashers, if they are old enough, make a great candidate for replacement if you have the budget for it. Here are three other appliances you might consider replacing before their time.


Refrigerators, among appliances, is the number one consumer of energy, so it makes sense to start with it. Everyone is aware that refrigerator technology has come a long way in the last ten years and the advice to replace your refrigerator, especially during our skyrocketing energy prices, is a solid investment that can pay off in a year or two. Consider this: Energy Star qualified units have to use at least 20% less energy than federal standards and 40% less than units sold in 2001, 7 years ago! If you have a conventional fridge made before 2001, expect a 40% savings in energy (of course, always check your unit’s manual or label for actual savings).

If you do replace your old fridge, remember to recycle it!


If you have an standalone freezer or compact freezer, switching to an Energy Star model means that you will consume 10% less energy (or 20% for compacts). You can save 100% if you stop using a separate freezer altogether, but the bulk purchasing savings might make having a freezer a smart move. Remember, a Frigidaire GLFN1326GW, a 12.9 cubic ft Energy Star-compliant chest freezer consumes 326 kWh a year, so unless you’re saving more than that in grocery bills… it’s not worth it.

Water Heaters

Besides the energy savings that may come with a newer unit (Saladdin, I haven’t forgotten about the tankless water heater!), water heaters fail in one of two ways. One way is a nuisance, another is catastrophic. The annoying way they fail is by ceasing to heat water, so you’re stuck taking cold showers. The catastrophic way is if they leak or break, turning an otherwise dry room into a pool. Replacing an aging water heater could be a way to save some money and headache later. Replacing something on your own schedule is always more convenient than on someone elses. 🙂


Want an excuse to get a new television? Energy Star compliant televisions use less than 30% of the electricity their non-compliant friends use. Also, effective November 2008, Energy Star compliance will be much stricter, broader, and cover all television types (LCD, plasma, etc). Right now, they are only test in off/standby mode (who knows why!?). So, if you have one of those ancient set top boxes and have been eyeing a new unit, consider a newer HDTV that might use less power.

For anyone looking to convince their significant other about the ecological friendliness of a new television, feel free to print this out and show them. 🙂

 Frugal Living 

Get A Stimulus Check Every Year!

With Presidential hopeful Barack Obama mentioning a potential second economic stimulus check, many folks are clamoring to know more. Unfortunately, there’s much else to say about it other than that he’d push for one in the short term.

I, however, offer a different solution. In order to find an additional $600, you only need to cut $50 a month. In reality, that comes out to only $11.54 a week. Reduce your spending by eleven dollars, fifty four cents a week and you will have created your own stimulus check. That’s it. Can you do it? I’m betting that you can and here are some recommendations of what you might want to trim.


NetflixGet a list of all the subscriptions you have and really take a long hard look at what you really use. Do you have a $50/month (or more) gym membership that you don’t use? Do you have a $15/month Netflix membership but have had the same DVDs for the last three months? Do you get a copy of Good Housekeeping every month yet you never do anything except leave it on the coffee table? Trim it.

  • Gym memberships,
  • Video rentals memberships,
  • Magazines,
  • Cable television,
  • Internet,
  • there are plenty more…

Food & Fuel

Food and fuel are the two largest expenses for most families so it makes sense, after trimming that which we can live without, that we turn to these two categories to find further savings. (what doesn’t make sense is why they’re not included in “Core-CPI,” oh wait I remember, it’s so the number seems better! :))

First, let’s tackle food.


Yellow SquashEvery Thursday there’s a farmers market within walking distance of my home in which fresh produce is sold at very low prices. I can get yellow squash for $1/lb. versus $1.49/lb. at the local Giant supermarket. That’s a 33% discount and while we don’t eat a ton of yellow squash, savings is savings.

Another recommendation I’ve heard, which I am trying to follow, is to eat more vegetables and less meat. Vegetables are healthier for you and far cheaper. Chicken breast, at it’s very cheapest, was $1.69/lb. and usually $2.99/lb. Beef? Forget it, you’re talking the north side of $4 a pound and sometimes much higher depending on the cut, grade, and whatever sale’s going on. Supplement your meals with more vegetables and some meat, for the various nutrients, but eat more leafy greens than fatty meats.

Lastly, be sure to review the circulars. You can see what’s on sale for the week ahead and plan your menu accordingly. We know that the front page of the Giant Food supermarket circular has the sales so we structure our meals according to what’s on sale. This week we had some shish-kabobs and will prepare some “crumby chicken” (it’s chicken breast coated with breadcrumbs, except it’s Ritz crackers) tonight. Chicken is on sale. 🙂 (oh, and a leftover calendar helps reduce spoilage… still going strong with nothing going bad yet!)


I’m a huge proponent of car pooling, as it has the potential for the greatest savings. A second best option is to employ some techniques of realistic hypermiling. Don’t tailgate trucks, but consider easing off the gas if you see a red light and not slamming it when it turns green.

Everyone can tell you to car pool or hypermile, how about something no one else has said before? Go to Google Maps and plot out your daily commute. Google will often give you the fastest route but not necessarily the shortest one. What you can do is drag the path and investigate some alternative routes to see if it reduces your total mileage. While there are factors not illustrated on the map (rush hour zones, traffic lights, etc), it will give you an accurate count of the miles traveled. You will have to decide for yourself whether the trade-offs are wroth it.

In my case, I plotted my former commute and was able to reduce the trip from 16.1 miles to 15.5 miles. Qualitatively, the shorter commute had three more traffic lights, took smaller roads, but often missed a stretch of two highways that are usually clogged during rush hour. I felt the two were equal, except one route was shorter by 0.6 miles. 0.6 miles may seem inconsequential but it’s actually worth $40 a year! At $4/gallon gas and a 30MPG car, each mile costs 8 cents. If I make the twice a day for 250 days, the typical work year, then I save $40 by cutting out the 0.6 miles. This, of course, assumes both trips take the same amount of time.

So, plot your trip and any frequent trips you make (such as to the grocery store, doctor, dentist, etc.) to see if you can squeeze any efficiencies out of it.

There you go, some damn good suggestions on how to squeeze an extra stimulus check each year. 🙂

(Netflix image by Ross C., Yellow Squash image by tombarta)

 Personal Finance, Retirement 

Four Ways You’re Unknowingly Cheating on Taxes

You might not realize this but last year you probably cheated on your taxes.

Yep, even if you used TurboTax or hired an accountant, you probably cheated on your taxes and you didn’t even know it! We’re not talking about some obscure tax law that no one has ever heard of like a barrel of rum for each ship entering the Port of London, these are bona fide legitimate taxes. And you may be evading them.

Now, part of the reason why you may have cheated on your taxes and not known about it is because many of these are not enforced. Many of them are difficult if not impossible to enforce. Use taxes have been on the books for quite some time but I don’t know a single person who has paid a use tax.

So, here are the four ways you’re a tax cheat. 🙂

Use Tax Shipping BoxWhen you ordered that book off Amazon or that new Dell laptop, did you pay use tax on it? Most people don’t and that’s technically illegal. Use tax is a type of tax that is levied on products you purchase outside of the state you’re going to use them in. The tax often matches the sales tax rate of the home state, effectively giving the state the legal right to tax products you buy elsewhere. States aren’t entirely cruel though, many states have a rule that states any sales tax you pay to another state can be used as credit towards the use tax, that way you aren’t hit with a double whammy. How nice of them! (I wonder how many people pay the use tax?)

  • Wikipedia on Use Tax
  • Maryland Comptroller on Use Tax (you can search for “use tax [state]” to find information for your home state)

Sales Tax Evasion

An extension of the use tax example above is one in which you buy something in another state simply because the sales tax is lower there. A lot of people who live on the Maryland-Delaware or Pennsylvania-Delaware border often travel into Delaware to buy things because there is no sales tax there. Technically, that’s tax evasion.

We were tempted to buy all of the alcohol for our wedding in Delaware but scrapped the plan because the two hours drive was barely worth it and because we could return unopened bottles to our local liquor store. (we also would’ve been breaking alcohol transportation laws too)

Barter Income Tax

If you trade your services with someone else on a contract and commercial basis, you have to claim the value of services received on your 1040 Schedule C form. “A barter exchange is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.”

So taking turns mowing lawns with your neighbor without claiming the “barter income” is okay, but trading website design work with a landscaping business requires claiming barter income. If you’re part of a barter exchange or network, it sounds like that’s automatic grounds for claiming it as income. I’m sure this is difficult to enforce but I doubt most people consider barter to be taxable!

Nanny Tax

NannyIf you have any household help, be it private landscapers/lawn care or nanny/babysitter, you may have to pay what’s known as a nanny tax. The nanny tax refers to payroll taxes (such as Social Security, Medicare, etc) and you are required to pay them if you pay someone more than $1,600 in a calendar year. Whether you are subject to this tax has been debated for quite some time but the crux of the matter is whether your “nanny” is considered an employee versus an independent contractor. The best advice I have for you is to check out the two links below to get a better handle as to whether you are subject to this tax.

Your babysitter might be an employee… and you might be inadvertently failing to pay your taxes!

( box photo by markuz, Nanny picture by teddyb)

 Personal Finance 

Financial Infidelity Giveaway

Financial Infidelity by Bonnie Eaker WeilThis promotional giveaway has ended, thank you to everyone who entered!

Yesterday I reviewed Financial Infidelity by Dr. Bonnie Eaker Weil and today I’m happy to announce that I have three copies to give away to folks who were interested.

How To Win

If you are interested, there are two ways you can enter:

  • Leave a comment bringing up any sort of “couples and finance” question you may have. A good example is whether, before or after marriage, you should combine your finances. Another one is how a spender and a saver could address and perhaps work out a compromise before taking the plunge. Please be creative in your question.
  • Subscribe to receive posts by email. I said in the past that anyone subscribed to the feed via email were automatically entered into giveaways and I’m sticking to it. So, if you aren’t subscribed, you can subscribe. If you are subscribed, good luck!

Get Posts by Email

To sign up to receive the posts on Blueprint for Financial Prosperity via email, enter your email address below. All you will get are emails from Feedburner (and then one from me when I select a winner for this contest and potentially future contests), otherwise you will receive no other emails.

Congratulations to Kaligirl, Brandon, and Raymond!

 Personal Finance, Reviews 

Review: Financial Infidelity by Bonnie Eaker Weil

Financial Infidelity by Bonnie Eaker WeilFinancial Infidelity by Bonnie Eaker Weil is a book all couples should review. When I first saw the title, I immediately thought to myself – “Awesomedude (yes, I call myself Awesomedude in my brain), you and your wife communicate openly about everything so probably won’t get much out of this book.” So I let it sit for a couple weeks before I took a look at it, however I’m glad I did. Financial Infidelity isn’t a book for people dealing with financial infidelity, it’s a book for people in relationships and establishing a framework for open communication about everything (but focusing on the effect of money). If you have problems (and you’re not alone, financial infidelity is rampant), this book can help. If you don’t have problems, this book will uncover what you don’t know or simply confirm all is well going forward.

(Click to continue reading…)

 Your Take 

Your Take: Synthetic Diamond Engagement Rings

Diamond Engagement RingIs there still a stigma against “synthetic,” or man-made, diamonds?

Nearly a year ago I wrote about an ethically-sensitive fiance-to-be’s dilemma: should he buy a larger synthethic diamond engagement ring or go with a smaller but “real” diamond engagement ring? The experts naturally advised him to be honest but the question remains whether there still is a stigma over having a man-made diamond versus a Mother Earth-made diamond.

I think the movie Blood Diamond awakened many to the atrocities surrounding the mining of diamonds but I don’t think it has or can overcome the years of powerful marketing and “tradition.” (Many still drive SUVs, fail to recycle, and do other Earth-unfriendly things in the wake of An Inconvenient Truth) I bought a Mother Earth-made diamond (I was aware of the atrocities surrounding the mining of diamonds in certain areas of the world; for me, I wasn’t aware of man-made diamonds and so I never made a choice) for my man-made lovely wife to be, but given a choice I’m not sure what I’d do.

However ultimately (and sadly), it’s all about comparisons. When people with engagement rings get together, both men and women, the question of size, color, clarity, and cut always comes up. People say they aren’t comparing, but they are. Ladies want to know who has the biggest, sparkliest, etc. and men want to know who bought it. So which is better, a larger synthetic or a smaller natural? The ones with the larger synthetic can sleep knowing they have the larger one, the ones with the smaller natural can sleep knowing they have a real stone. (of course the real bottom line is that it doesn’t really matter, you can’t eat, live in, or drive a diamond)

What’s your take on diamond engagement rings, be it naturally occurring or man-made? Natural is best? Synthetic is best? Everyone is crazy about these sparkly stones and we should be focusing on other things? And when you get a chance, check out this Smithsonian article about how synthetic diamonds are now as good as real ones.

(And what’s up with diamonds anyway? If I was a woman, I’d prefer another gemstone with a little more color, life, vibrancy, character, I don’t know… but then again my opportunity to be different, my wedding ring, is a solid gold band so what do I know)

(Photo by fensterbme)


Job Change: Take Vacation or Cash Out Vacation?

Vacation on the BeachWhenever you change jobs, there’s always some vacation days left over that you can either take or cash out (some employers won’t give you an option, this is for those who do have a choice). For me, the choice has often been pretty clear: take the days off. You’ll be paid for both but by taking vacation you get a few more benefits.

The only argument I can think of in favor of cashing out vacation is one where you want to start work at your new job ASAP and you’ve signed some sort of non-compete agreement with your former company. In that scenario, you would be in violation of that agreement if you worked for your new employer while still on the payroll of the former one. Outside of that scenario, unless you all can think of one, that’s the only argument for cashing out vacation. (There is one more, if you have a lot of vacation and you want to be paid in the current pay cycle rather in the next one… but that’s even rarer than the first scenario)

Here are reasons to take the vacation:

Medical Insurance

If you take the vacation days, you still get medical coverage for the time you’re on vacation. If you get paid out for those days, your medical insurance ends on your final day. This may not be a big deal if you start your new job immediately. If you want a few days off in between employers, it pays to “take vacation” and have medical coverage.

One thing I never understood was why my medical insurance expired on the last day of employment yet I continued to pay, out of payroll deductions, for medical for the entire month.

Accrued Benefits

Depending on how your benefits math is calculated, you may want to schedule your final day during the beginning of a month. At my last employer, our vacation days were accrued on a monthly basis. When I left on February 28th, I didn’t get the vacation days I had accrued for the month of February (ouch). This may be the case for the accrual of other benefits as well, such as pensions, so you might want to take a few vacation days to pull you into the next month.


If you’re a few days away from a holiday, it’s better to take the vacation and get paid for those holidays (duh). I knew someone who switched jobs around Thanksgiving. Using his vacation from his first employer, he was able to stretch is last day past Thanksgiving. He also started at his new job on the Monday before Thanksgiving. End result was that he was paid by two employers for that nice two day holiday… very clever!

One thing to be aware of is whether you signed any sort of non-compete agreement (as mentioned earlier) while you were employed with your former company. In the case of my Thanksgiving friend, there was no non-compete agreement in place (not that the first employer knew) and so he could technically be employed at the two companies simultaneously so all was okay.

There you have it, some reasons why you should take your vacation rather than taking a straight payout. Of course, this requires some delicate discussion with your HR department or your direct manager. I’ve found that people are reasonable, will appreciate some forewarning, and won’t mind you taking vacation. If your HR or your manager doesn’t seem reasonable (and everyone who has an unreasonable HR and/or manager knows they’re unreasonable), give the least amount of notice possible. It’s all business.

(Photo by Storm Crypt)

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