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July 31, 2005

Shopaholics, Control Your Clothes!

Do you spend more money than you would like on your clothes? Maybe you know you don't really need a new shirt, but that sale is just too good to pass up? Here's a quick tip to help control your impulsive shopping.

Make yourself this promise: before you buy another piece of clothing, no matter how cheap or how much of a good deal it is, you have to get rid of one piece that you already have. If there's nothing you're willing to part with, then you don't buy something new.

What's the Point?

If you make this deal with yourself and stick to it, you actually get several benefits out of it.

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Posted by Frank at 4:04 PM | Comments (1) | TrackBack

July 29, 2005

Brown-Bag It to Half a Million

Update: What if your numbers are different than mine? Maybe you can save $6 a day, or only want to pack lunch three times a week? Or are you just curious about how I arrived at these numbers? Use Hello, Dollar's Savings Growth Calculator to find out. The numbers in this article were calculated assuming one deposit every year and interest compounded yearly.

One of the ways I save money is by bringing my lunch to work four days a week. I'll treat myself to lunch out one day each week, for variety and to hang out with my co-workers. It's amazing how much this helps me save, and all of it goes straight into our savings account (a.k.a. our future).

But it can't really be that much, can it? After all, take-out lunches are pretty cheap. Well, that's true, they are, but let's just do the math for fun.

I work in downtown San Francisco. On average, when I buy lunch, I spend $7. This includes an occasional sit-down lunch, but usually I get something to go and bring it back to the office.

When I bring lunch from home, it costs an average of $2 for a sandwich (my favorite is peanut butter and jelly), yogurt, and fruit (hey, this lunch-bringing has the side benefit of also being healthy!). Drinks are provided by my employer, so I don't need to worry about that.

So let's see, four days bringing lunch at $2 plus one day out at $7 equals $15 per week. Eating out every day would cost $35 per week, so I save $20. $20 a week! That's over $80 a month -- that covers my utility bills right there. Who couldn't use that?

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Posted by Frank at 6:38 PM | Comments (32) | TrackBack

Credit Card Payment Calculator

Do you really know how much you will pay your credit card company if you make the minimum payments each month? Do you know how long it will take, even if you never charge another dollar to your card? This calculator will tell you, and the answers might surprise you.

There is good news, though. If you can afford to pay even a tiny bit above the minimum payment, it can dramatically reduce both the time it takes to pay off the debt and the total amount of interest you wind up paying.

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Posted by Frank at 12:59 PM | Comments (3) | TrackBack

July 28, 2005

What "Hello, Dollar" is Not About

After giving you a picture of Hello, Dollar's motivations and goals, I thought it might be useful to clarify what this site is not about, so that you'll have a better idea of what to expect.

We Won't be Covering...

Get Rich Quick: I will not be teaching you how to get rich quick. Why? Because there is absolutely no reliable way to do this. Anybody that promises otherwise is trying to sell you something. On the other hand, there is a different, reliable, way to get rich: slowly. That's what we'll be talking about here.

Stock Picks: When we talk about investing, I will not push individual stocks. When you buy a stock because someone else recommended it, you bought it for the wrong reason. No one, even somebody you trust, cares as much about your money as you do, so when you make an investment that has the risk of losing it (like a stock), you should know why.

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Posted by Frank at 5:37 PM | Comments (1) | TrackBack

July 27, 2005

Hello, Dollar!

My Story

Three years ago, I was on the edge of a cliff. A young software engineer with a few years experience, I was doing well in my job, but I never learned how to manage my finances. I had two credit cards maxed out and was kicking myself over my car lease that had one year remaining and was turning into a money pit.

I was still living within my means, but just barely. I might pay off a large chunk of one credit card when I had some extra cash, only to run it back up again before the month was out. There was no savings -- if I had lost my job, I would not have been able to pay rent the next month.

What's My Motivation?

Still, I was not terribly worried. This was the way I'd lived since I could remember. My mother was a single woman with three children, and there were always bills competing for the next paycheck. She couldn't get caught up, let alone ahead. Yet somehow we always managed. There was a roof over our heads and food on the table. I was raised to understand that no matter how bad it got, we would survive.

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Posted by Frank at 6:38 PM | Comments (8) | TrackBack