My roommates and I bought a great charcoal grill off craigslist (for only $40) at the beginning of the summer. Since then, we have been grilling almost every weekend and on some weeknights for dinner. When be barbeque, we like to go all out and feast. Our usual BBQs consist of some combination of the following: home-made burgers, hotdogs/sausages, chicken, corn, vegetable salad, and pasta salad. Although we like to eat well, we still try to be economical with the food we purchase. We are usually able to keep the costs below $5 a person for the meal.

Labels: saving

In April, I got my first speeding ticket. I almost never speed, but I was driving my friend’s car and was not really paying attention to how fast I was going. I was given two citations: speeding ($180) and passing on the right ($100). I appealed and received a court date to meet with the Magistrate who would make a decision. Note that this was not a trial. I have written about getting out of speeding tickets in the past and about the trial process. This meeting was the step before the trial. Some cities/towns have you meet with the magistrate to expedite the process. If I was unsatisfied with the magistrates decision, I could appeal and set a court date for a trial.

So I have a friend, let’s call him by the initials of his nickname – TM. He recently received a job offer – congrats to him for sticking to the job hunt and being persistent – that he is really happy with. The job pays well and has great benefits. TM has yet to start working, and is a recent graduate from grad school. During the time that he was a student he was essentially broke and really did his best to live frugally and not spend his money unnecessarily. Over the next month, before he starts working full-time, he expects to incur some expenses that are necessary for his career path. In order to pay for these expenses, he borrowed the money he needed and a little extra for living expenses to hold him over until he is paid from his new job.

This all seems fine, and you might wonder why I am bothering to tell you this story. The problem with this story is when TM began to spend the money that he borrowed along with his small personal savings. Although he knew that he should not be spending money that he did not have, he believed that it would not be a problem because he now had a job to pay for the new expenses. I have no problem with a little increase in spending if you have an increase in income. However, TM has yet to even begin his job. He is spending money that he does not have and even worse, he is assuming that he will always have that job. You can never predict the future and for all you know, your income stream could end tomorrow. Never spend money that you do not have. Those who spend their bonuses or paychecks before they even get them are just asking to be put in a difficult financial position.

TM’s story not only shows that you should be careful of excessive spending before you have the money, but also that emergency funds are important. Everyone should have an emergency fund that can be used for living expenses in the event that you lose your job or are no longer able to perform your job.

This poses the question of how large an emergency fund should be. There is no correct answer to this, but I believe it should be at least equal to 6 months of your salary. I actually think it is better to have this number tied to the level of unemployment. For each percentage of unemployment, you should have one month’s worth of salary in the your emergency fund. For example, the current rate of unemployment is close to 10% so I would suggest 10 month’s worth of your salary in this fund. This might seem like a lot, but if you think about how hard it could be to find a job in this economy, it makes more sense.

I found that I waste a lot of time. As a person with an entrepreneurial mindset, I believe that I miss out of opportunities when I waste my time. I wanted to write time is money, but part of me says this isn’t true. Money is not everything, and sometimes, the most valuable time is spent with family and friends doing something unproductive, yet fun. Still, I see myself and many others wasting their time. Here are a few ways I used to waste my time and sometimes still do:

1. TV – I used to watch an immense amount of TV. In college, I really cut down on this because there are many other more entertaining ways to spend my time (ie. hanging out with friends, parties, extracurricular clubs, sports, etc) However, my first big purchase after I got my job was a large flatscreen LCD TV. Since then, I watch almost an hour of TV every night before I go to sleep. I find it as a way to relax from a hard day of work, but it is now starting to become a habit that I think is mindless and wasteful. My goal is to start cutting back on watching so much TV.

2. Youtube – Before I got busy with work, this blog, my business, and real estate, I used to waste countless hours and entire nights watching videos on youtube. This can be a very fun time as we find plenty of entertaining videos to watch. When I think about it though, I find that I have gotten nothing out of watching those videos. I didn’t learn anything, I didn’t help anyone, I didn’t increase my income, and I certainly don’t remember any of those videos.

3. AIM/Gchat/Online Chats – When I was in high school, I used to chat on AIM constantly. I really loved talking to all my friends and I still do. This continued into college until one day, in my second year of college, one of my best friends, Rich, sent me a link or something to download and my buddy list just blew up. I lost all my contacts and never felt like replenishing my buddy list. So, thanks to Rich, I only use Gchat to communicate with friend on occassion. As much as I love to keep in touch with friends, there are other medians to do this (ie. email, facebook, calling). I’m historically very bad at keeping in touch, so hopefully my friends understand that and don’t hold it against me. Still, I have found that not being on AIM/Gchat has given me a few more hours each day to be productive. Give it a try, take a week off from chatting online and see how much more you can get done.

What are your time wasters?

A few month’s ago, I signed up for Lending Club. If you have never heard of it, it is essentially a peer to peer lending platform. With the credit markets tightened up, some people who need to borrow money have chosen to borrow from other people through peer to peer lending companies such as Lending Club. Other’s see an opportunity to invest through providing money to fund loans with Lending Club.

I really like the idea of Lending Club. You can choose the different levels of risk associated with different loans in your portfolio. The higher the risk, the greater the interest rate and return. Of course, there is the risk of some loans defaulting, but if you diversify your loan portfolio, you can earn a decent return.

I actually have yet to invest any of my own money in Lending Club. I took advantage of an offer to try Lending Club out in which the company gave me a free $25 to start my account. I did it four months ago and invested the $25 into a loan with moderate risk and 12.53% interest. So far, the borrower has not missed a payment. Obviously, I do not intend to make any real money with this $25, but I am really just testing out the platform. So far so good.

If you want to try it out as well, you can also get $25 into your account for free (I also get a bonus for referring you). Here is how:

1. Click on this link to Lending Club
2. Sign up for an account and enter this promotion code: blee0408

You will need to input your social security number and some other personal information. Don’t be concerned, this is to verify your identity and etc. Give it a try and please let me know what you think of it by commenting below!