Not cheap, Fiscally concerned

If part of your job includes traveling often and you charge your expenses to your employer, keeping a separate credit card with a high cash back bonus might be a good idea.

Here are some benefits to holding a separate credit card solely for business trips:

1. Cash-back on money you don’t really spend - it’s money your company spends.
2. A backup to your receipts as proof of expenses (when you submit your forms requesting your reimbursement).
3. Avoid confusing your household expenses with ones paid for by your company.
4. Build your good credit, always pay on time because the expenses will be paid for.
5. Don’t surprise and stress your spouse with approaching limits on a shared household card.
6. Certain cards offer more rewards on travel related expenses, including benefits while on the road.
7. If you are in credit card debt, separate your business expenses which could be paid in full each month, to reduce your finance charges.

I would add that it is always a good idea to open whatever “club membership” is available on airlines and hotels providers you use and before you book anything - see if there’s a special deal. I recently got upgraded on a hotel chain club and got a restaurant gift card with it for my trip. On another occasion I got a best buy gift card - just for staying for business purposes. I know it’s time consuming and for some it might sound like too much hassle to bother. I suggest - simply spend 10 minutes before booking anything for the most basic research, it’s always fun to get back free stuff.

Another point I’d like to make is that I don’t see any reason to hold a card that has a membership fee. There are plenty of free cards out there with features that will surely surpass the one you pay fees for.

Have a safe and productive business trip… Cheers!

We use one credit card for all our purchases, and towards the next billing date we begin tightening our budget further and further. The creditor usually sends a bill towards the 10th of the month and we usually use up most of our self imposed limit by then.

For some reason I feel a sort of a pride when we manage to amuse ourselves and feed ourselves to a satisfying way and still show a low bill. Just sitting at home listing to an AM radio would be fine if we weren’t an actual family with two kids who do need to be entertained and have some fun at the weekend.

Yesterday, on the 4th of July we had a big breakfast at home - then did some house chores and generally waste time things (like reading blogs… playing PC-Games…) until around 2pm. Then we packaged some sandwiches and light snacks onto our cooler and drove to a nearby metro park. We bought a couple of months ago an annual pass for 20$ and we go to one of the many parks at least once a week.

Yesterday we were almost alone there. We had our outdoors picnic at the wonderful weather, played some ball and then the kids played at the playground. Before leaving the park we followed a nature trail to a river. When we got back to the car it was almost 5pm. We drove through the side roads enjoying the views of farms and expensive homes along the way.

A picture taken at Gallop Park in Ann Arbor - 2007

Once we got home - the kids went out and played with our neighbors kids. I fired up the grill and flipped a few burgers. That’s my kind of fun. When the sun set around 9:40 at evening the neighbors started firing their fire works. I personally like to observe - not to light up fire works… We have a nice view from our deck at our neighborhood as well as some other more distant places. It was great fun. The only money “spent”? None, just the gasoline already in the car and the food already in the fridge. I guess if we lived any closer to main event cities like Detroit we might have drove to those… Sadly we missed the fireworks last week at our metro-park (again, would have been free with the annual pass). We usually go to our closest metro park, they have a great show and a band playing. Next year…

Today was still frugal but less. We went out to eat breakfast at McDonald’s - a family of 4 eating for 13 bucks - where else can you find that? Then we drove to our local library and looked for DVD-s for the kids and books in general. The kids always have fun and find something to do there. After that we went on to another library, an even bigger one, at another close by town which share the same “library card”. There was a farmer’s market right by the library and some music too. I found the book I wanted and the kids got glued to the computer screens. It was now around 1pm and we continued to the closest Taco Bell. Again - 13 bucks to feed a family of 4. That’s as close we can get to “pigging out” - all four of us - for a total of 26 bucks.

Now I’m back home, telling you about it, and looking at the stack of books I got lined up to read in the next two weeks.

Have a fun frugal weekend too!
P.S. Flipping burgers always means some beer as well…
Cheers!

We’ve all heard about getting rich slowly techniques. The key point in trying to do so is spending less than you earn. Once you have achieved that, you can start eliminating debt, growing your savings, start investing and possibly someday get rich.

Without delving into my personal story, before generalizing my spread sheets, I thought it might be proper to lay out in the shortest and simplest way what it is we do to spend less than we earn – and thus meet our goals and live richly.

Before you plan and implement what I suggest here, imagine spending a couple of days a month living like the poorest man in your neighborhood. Imagine you have no money for the next couple of days and you need to spend the last 100$ you have in your pocket to stock up for basic things you and your family can survive on. For us, this means always having piles of the cheapest rice and pasta. If we don’t have enough money to buy a thing, we can still cook some white rice. Like the title says, I’m fiscally concerned.

Now start asking yourself some questions about what you earn, and how it is spent:

1. Write down all of the expected annual income your family makes, and divide it by 12 regardless of the month to month fluctuations due to number of working days or other variables. This sum should include the amounts you get after tax deductions.
2. Write down all of the recurring expenses you cannot control. Including monthly-quarterly-yearly bills. This includes home (mortgage or rent),cars’ license plate renewals, average cash withdraws from ATM, loan payments, existing credit debt payments (above minimum – enough to pay off someday). This does not including any items for which you go to a store for, or which you can choose to skip for months. Again, reach a yearly sum and divide it by 12.
3. Subtracting the monthly recurring expenses from the average monthly expected income - the remainder should be considered the living expenses you still have some control over. This is the sum where we will exercise our flexibility. I will refer to this sum as “available flexible living sum”, or “the living sum”.

I’ll pause here and stress something out, you have to be honest with yourself and write real numbers. If the sum you reach at item 3 is less than 900$ then I think you should consider ways to reduce your “uncontrollable expenses”. This is your food and gasoline money and you have to be able to pay for it. Cancel some home services, relocate to a cheaper place, get another job or a raise – because whatever you do, you need to have enough to get by – and that money must be earned, not borrowed.

Only from here can we start cutting the income pie:

1. Dedicate a fixed amount into your deferred goals. Take some percentage off the living sum and put it into some savings. I’ll leave the discussion of such saving to some other time… for us, it goes into a high yielding money market – and we spend a fixed amount of it annually to vacate. We also allocate it for other goals… again, I’ll discuss this elsewhere. On our long term plan we plan on increasing this amount and have detailed why such an increase will happen (raise, stop some fixed payment, buckle down).
2. Split the remainder into 3 sums, and allocate those sums to 3 parts of the month, typically 10 days each, except the last third of the month which could be longer. Be strict with yourself, you can buy or spend that third of the flexible living sum however way you want, but when that 10 days budget is used up enforce virtual abstinence and don’t buy a thing.
3. We use a single credit card we pay in full each month. Every purchase me or my wife makes we record on an online excel sheet, and compare it to the card’s online records so we can’t really miss out and lie to ourselves.

What?! Wait – what did I just say? Well, that’s the point – you need to think of your money like cell-phone minutes, you can carry them over, but over usage should be considered very punishing.

You need to prepare yourself as a family to a situation where there could be 3 to 7 days where you “virtually” don’t have any money – even if the bank statement says you do. Use canned food – store bulk products and live like a cheap bastard. For only a short number of days, it can definitely be done.

And that’s the “secret”. We do and buy whatever we want. It’s not a question of “if”, it is a question of when. We don’t buy when we can’t, but only a few days away we assure ourselves that we can.

Notice I didn’t budget for expense types. It doesn’t matter if we go to a theater and dine out every night, if we can – it’s our privilege to enjoy what we earn. If we want to buy a sewing machine, we can – but if it takes away from the 10 days budget – we have to limit our selves after the purchase and wait until our self placed budgetary restrictions are met. No money means no money, even if the bank says otherwise.

Wow – that’s a shell of a nut that’s a bit bigger than I thought it will be. I’ll try to summarize this and post again as a standalone page on this website at some point.

Please comment, it’ll be much appreciated

Cheers