Beating Broke

Have a No Spend Month This Fall to Save for Holiday Gifts

October 3, 2011 By MelissaB 10 Comments

Have you ever watched your family open up Christmas gifts while mentally calculating how much each gift cost and comparing that against the amount you have in your checking? Have you dreaded opening the bills in January because you know the credit card statement from holiday shopping will be coming soon and you do not have the money to pay the balance in full?
When my husband and I were newly married and dirt poor, we carefully planned our Christmas purchases to fit within our meager budget. We didn’t buy many gifts, but the ones we bought were well thought out. When we went to visit my mom over the holidays, she kept telling us about all of the presents she had bought for us. There were so many under the tree! Because we are the only people to buy gifts for my mom because my dad has passed, we started feeling guilty about the few presents we bought her. Noticing that her bathroom towels were worn, we went out Christmas Eve night and bought her an entire set of 6 new bath towels including hand towels and washcloths with money we did not have. Then we bought her some jewelry. We charged everything knowing we didn’t have the money to pay.

On Christmas morning, she delighted in her presents. When we opened ours, we were in for a surprise. She too had bought a few well thought out gifts for us. But all those extra gifts we found under the tree? They were leftover t-shirts from a conference some of the professors had hosted at the university where she works. She bought them for a $1 each. Each time I or my husband opened another one of those presents that contained a t-shirt, I felt sick. We had put ourselves in debt to try to make sure our presents were equal to hers, but she had stuck to her financial budget by giving us “filler” presents. There had been no need to buy those extra gifts on Christmas Eve. . .

We worked like crazy selling off things in our apartment such as textbooks we no longer used so that we could pay off those credit cards used to buy the extra gifts. On our meager salary, it took us until March. Thankfully, we have learned our lesson.

If you don’t want to spend the months after Christmas worrying how you will pay off the new debt you just acquired, consider having a no spend month now. We still have nearly three months until Christmas. Pick a month such as October or November to drastically reduce your spending.

If you normally spend $1000 a month on groceries, gas, entertainment, eating out, toiletries, etc., decide how much you want to cut that amount. Maybe you will decide that in October you will only spend $500 a month. To make up the difference, perhaps you won’t eat out or you will eat from the pantry to use up those groceries that have been on the shelf for awhile. Maybe you will do something for free as a family rather than catching the latest movie.

By reducing your spending for just 4 weeks, you will be able to come up with a good amount for your holiday gift giving. If you normally spend $1000, but only spend $500 of that in October, you now have $500 saved for holiday gift buying. Yes, you sacrifice now, but it will be well worth it when you know that every present under the tree has been paid for. Best of all, there is no reason to dread the bills in January. Isn’t that a great way to start the new year?

photo credit: kevin dooley

The Wealth Cure

September 30, 2011 By Shane Ede 1 Comment

The Wealth Cure

By: Hill Harper

When you first see the image of who Hill Harper is (He’s an actor on CSI:N.Y.), you assume that this is just another book by a celebrity to boost his status and pad his wallet. What you get when you read this book, however, is another thing entirely. Not only is this not a book that Harper had someone write for him and then published using his name, it’s a thought provoking book that happens to be about wealth. If you’ve read many books on money and wealth, you know that a majority of them are dry, boring books to read. Harper manages to take what is a very important message about the role that wealth plays in our lives and melds it into a very engrossing story about life, success, and the real worth of wealth in our lives.

He starts the story with a short few paragraphs setting up the story for the rest of the book. Recently diagnosed with cancer, he decided to take a train from Los Angeles to Chicago. The rest of the story is about the revelations he came to while riding the train. It’s a wonderful book that really cuts to the core of what wealth really is, and how, so often, we pervert it into something entirely different.

This is a book about life, and how the way we treat our wealth, build our wealth, and live our lives really can make a difference, not only in our life, but in the life of others. I would highly recommend reading it, especially if you find yourself struggling with the role that money plays in your life.

Disclaimer: I was sent a copy of this book for free as a review copy.

Quick and Easy Passive Income Ideas

September 28, 2011 By Shane Ede 13 Comments

Building passive income streams can be hard work. They usually take a significant amount of work and/or money to set up before they can really become a full-fledged passive income stream. It’s part of the argument over whether they really are “passive” or not. Obviously, as with anything, the more work or money you put into your passive income ideas the better the resulting passive income streams will be. But, when you’re first getting started, there are several ways you can set up some small passive income streams that will provide with different forms of passive income.

Here’s a few passive income ideas.

Blogging – As a blogger, myself, this one is one of the first ones I usually suggest. To be sure, it’s not for everyone, but it can set up a rather nice passive income stream. Blogging is work, but a well set up blog, with some content, could eventually be left alone to collect traffic, and Google adsense checks. The initial work is a bit heavier, but the maintenance while setting it up can be as little as a few hours a week.
Cash Back Cards – Some might argue that this isn’t really a passive income stream, but I think that it can be. Using a tax free cash back card to pay for bills/things that you would normally buy anyways makes the cash back an added bonus. The only added work is to immediately pay the balance for the things that you’ve bought, and the cash back becomes an extra stream of income that you earned by buying things you would have anyways. I have a coworker that does this and makes $500-$600 a year.
Peer-to-peer lending – I’ve written before about my portfolio on LendingClub, and how, with very minimal maintenance, I’m slowly building a passive income stream that earns me money. As my portfolio grows, and I reinvest the interest, the interest income from the portfolio grows with it. Eventually, if I keep with it, I could have a compound interest passive income machine, built with less than $20 and 20 minutes a month.

Those are just a few quick and easy passive income ideas to build passive income streams. They don’t require a lot of work to get started and maintain, but they will provide for extra income that you can use to build them further, or to help beat broke.
photo credit: alancleaver_2000