Dobot: Automated Saving for Goals

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Every year, I get thousands of marketing pitches in my inbox. I often find that there are fewer than 10 are worth my time to readers. It almost makes me want to shutdown my email completely.

Today, I'm bringing you one of those 10 pitches that makes it all seem worth it: Dobot (pronounced: "dough bot", get it?)

What is Dobot?

Dobot is a FREE financial application that squirrels away small amounts of money from your bank account into a separate saving place. The idea is that you won't notice the money being taken out and that you won't spend money that isn't there. Sounds like a great unique idea...

... wait? You've heard this before?

Yes, that's essentially the same description of Digit, which I've been recommending for the last 18 months. Just two weeks ago, I wrote about how one can use Digit in the same way to save for the holidays now.

If Dobot were an exact copycat, I wouldn't be writing this article. We already have a 5-letter savings account squirreller that begins with "D."

So what makes Dobot different than Digit?

Let's review briefly what Digit is. Digit allows people to save money into one pool. It continuously saves money, a little each day. I've been using it for building a general emergency fund. I have had enough emergencies (new car brakes immediately come to mind) that keep it from growing too far out of control.

Dobot helps people to save with the idea of a specific goal in mind. You can have multiple goals and hence pools. You enter a goal, how much it costs, and when you'd like to reach it. Here's a 90-second video overview:

Getting Started With Dobot in Less than 5 Minutes

Earlier today, I signed up for Dobot to get an idea of how it works in practice. It took one click from the Dobot website to get the Android app (there's an Apple one too) installed on my phone. When I ran the application, I simply created an account by adding my my email address, my phone number, and a password. I then choose my financial institution, logged in, and picked my bank account. (Let's put the question of security aside. We'll get back to it in a bit.)

I've written before that I've been saving money for this very extremely expensive television.

I created a simple goal, "OLED 65", "November 2017", "$2500." The most difficult part was trying to figure out what the cost of the television will be when I think it is a good value to buy. I'm not sure if the good value is $2500 as I like to find a rare bargain. I took that there might be a Black Friday deal next year with that rare bargain.

Here's Dobot's example of how a typical goal might look:

Dobot helps you save money

While I just signed up, my understanding is that each week some money is put aside towards the goal. Since my goal is about 55 weeks away, I imagine that it will save around $45 a week, which would give me around $2500 by my target date.

Dobot allows you to add a picture for motivation. Unfortunately, it wouldn't let me bring in pictures from Pinterest or Amazon. I had to already have them on my phone. So I took a picture of my current Wal-Mart brand budget television that I want to upgrade from.

Dobot is a very visual application, which is very different than Digit which works best by text message.

In the coming days I will look to add some minor and major upgrades around the house.

I see Dobot as a great budgeting tool. Some banks allow you to create sub-accounts for the same kinds of savings goals. Unfortunately, USAA required me to create a separate savings account for my OLED TV. It wasn't a huge pain for one thing, but I certainly wouldn't want to manage 20 accounts via USAA's website.

The downside of all this is that you aren't going to earn interest. Some people may be upset with that. I see it as a non-issue given today's extremely low interest rates. If I was getting 3-4% in my savings account, it would be a different conversation.

Is Dobot Secure?

Dobot is FDIC insured which is always something to look for. They say that they use bank-level security. That's not overly convincing in and of itself. However, I know that these applications typically use the same bank-end banking engine like Yodlee. So many applications use this that the real risk is probably at Yodlee. I've been using these types of applications since 2006 and I've never heard of a hack. It might be more likely that your bank gets hacked.

Get (a little) Free Money

If you sign up from this link on the Dobot website, install the app, and add a bank account, they'll fund it with $5. It isn't a ton of money, but what did you expect in spending a few minutes to sign up for a free helpful, budgeting service?

I'm not sure that you need both. Some people don't even need one. However, I can see why people would use each of them. I'll continue to use both, because I love to automate my money. Over the years, I've learned that the more forced savings I have, the more my net worth increases.

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Last updated on October 17, 2016.

Rewarding and Motivating Myself

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I have a problem. It's a "first-world" problem, so I don't expect any sympathy.

Father's Day is just around the corner and my wife asked what I wanted. I honestly couldn't think of much. I kind of want this Intel NUC to update our Windows Media Center that eliminates our cable box rental fees. The Dell Zino that I got 5 years ago is showing its age.

Unfortunately, Microsoft discontinued the software to make it go, so I'm reduced to experimenting putting Windows 7 on it (not easy) or putting an experimental build of WMC on Windows 10 (also not easy). I don't want to take on the project. I just want something that works.

Other than this, the only other thing I can think of wanting is this extremely expensive television. Hey it only costs a fraction of the $25,000 that the technology cost a few years ago, so it's a "bargain", right?

I don't see myself saying, "I think it's a good idea to spend $3000 on a television." I'm just not wired that way.

However, I realized that if I put aside a little money each month, it feels like an easier purchase. I saved specifically for it, so I can justify it.

I've decided I'd put aside 1% of my monthly revenue each month. So if I were to make $60,000 a year (I don't, this is just an example), it would be around $5000 a month. When I put 1% aside, I transfer $50 to a specialized account. That would be around $600 a year saved. So it's going to take me 5 years to save up for the television, right? Well fortunately technology becomes much cheaper over time. In a couple of years, I wouldn't be surprised if it was $1500 and I would have saved $1200 (in this example).

I'd still be a little short, but here's where the Father's Day solution comes in. If my wife adds $50 here or there the gap is bridged pretty quick. It's no big deal if it takes 30 months instead of 24.

This helps me in three ways:

  1. Budget for a big purchase - Some people just add it to their credit card and pay a ton of interest. Those people are not likely to be the ones retiring early.
  2. Motivate Me to Make More Money - Because I'm putting 1% away, the more money I make the faster I get to my goal. If I can grow from $5000 a month to $6000 a month, that means that I'm putting $60 aside each month. That would get me to $1440 after two years instead of $1200. I'll reach my goal quicker and get the television quicker.
  3. Reward Me for Doing Good Work - This is kind of big thing for me psychologically. As I mentioned in the beginning, I don't really want a lot of things. To expand on that, there aren't a lot of experience things I want at this time either as it's hard to do them with the 2 and 3 year old. All work and no play make Brian a dull boy, right?

What do you do to motivate and reward yourself? Let me know in the comments.

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Budgeting, Financial Planning

Posted on June 14, 2016.

Cheap Alternatives to Men’s Gold or Platinum Wedding Bands

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Weddings are expensive.

Weddings are so expensive, in fact, that even as the typical wedding involves fewer guests, the average cost for what's typically a five-hour event has shot up to $31,213, as of 2014 according to a survey conducted by The Knot, a multi-platform wedding resource. And the price continues to increase.

And when you've already resigned yourself to the fact that you're supposed to spend tens of thousands to have your perfect day, what's another couple of thousand on a groom’s ring, right?

A wedding band is another piece in the up-sell of everything that goes into a wedding

It's almost too easy to want to spend money on your wedding; we see them as special, once-in-a-lifetime events wherein every item is a symbol, wrought with sentiment and meaning.

However, many of the aspects of a wedding that we think of as long-held, important traditions are actually relatively new inventions thought up by the wedding business to make money. The diamond engagement ring – almost entirely a 20th century creation at the hands of De Beers and its hired marketers – is perhaps the most famous example.

The groom’s wedding band is no different.

While there is evidence of women wearing wedding rings back to ancient Egypt, research indicates that it wasn't the norm for men to wear wedding bands before World War II.

There are a couple of theories behind the birth of the two-ring trend: when men went off to fight in the second World War, many of them were said to have worn wedding bands to reminisce upon their wives back home. Other sources point to the growing gender equality between men and women -- if the woman is wearing a ring, so should the man.

Whatever the reason, jewelers were all too happy to take the opportunity to sell yet another expensive item to American lovebirds -- and it worked.

Yet, while men and women have taken great strides toward equality, the same cannot be said of our wedding bands. It is not uncommon for a woman's wedding band to have a high level of artistry -- diamonds and semi-precious stones, halos, eternity settings -- while most men prefer a simple sliver of metal, which could be achieved easily by even the most novice jeweler.

But because they both fit into that same "wedding" box, men will pay far more than what they have to for what amounts to an inornate band, simply because soon-to-be newlyweds approach the purchase with their eyes closed and their wallets open.

Smarter options

The bulk of the upcharge comes by convincing men to stick to rings made of platinum or gold if they want something that will last a lifetime.

But the simplicity that many men want in their wedding bands offers the opportunity to go with a less traditional material that will be as durable -- if not more durable -- for a lot less money.

One option that is particularly well-suited to the simple designs of men’s wedding bands is titanium. While it is very difficult to solder and thus not as great a choice for more ornate jewelry that might have to be re-sized, titanium is inexpensive to machine into simple circles of a given size. Moreover, titanium is biocompatible – meaning you won’t have an allergic reaction to wearing it – and less susceptible to tarnish and scratches than more expensive metals including gold.

Another material that takes advantage of the relatively simple design of men’s wedding rings is tungsten carbide. This chemical compound is extremely hard so you wouldn’t be able to re-size anything made of it, but can be pressed into pre-determined shapes for a relatively low price. The resultant hardness means that tungsten carbide rings are extremely durable and very difficult to scratch. However, it is important to note that different manufacturers use different compositions of tungsten and carbon, with nickel and cobalt often involved as well, and that the different combinations can mean that these rings can differ greatly in physical properties. As always, read reviews to have the best idea of what you’re getting.

Besides these two, jewelers also offer men’s wedding rings in any number of novel, inexpensive materials that include, but are certainly not limited to, ceramics, steel, meteorite, and dinosaur bone. Needless to say, with a little creativity and legwork you can find something meaningful that won’t break the bank – a welcome relief given the high cost of other aspects of getting married.

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Posted on November 17, 2015.

The Lazy Guide to Budgeting – 7 Ways to Make It Easier to Stick With

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The following is a guest post by Fanny Seto. She is the creator of Living Richly Budget Printables, a 20-page printable bundle and budgeting system that makes it 20-seconds easier to stick to a budget. She is also the Editor-in-Chief of Living Richly on a Budget, a personal finance blog. I met Fanny when I was living in San Francisco and she's a smart, smart woman. I realize that printable budgets aren't for everyone, but if you are going to go that route, I'd recommend picking these up. They are gorgeous.

Many people start budgets but they don’t seem to stick with them. Why is that? Because they’re lazy?

I think it’s because they don’t have clearly defined goals. Are you trying to pay off debt, save up for a house, or build a college fund for the kids? What is the exact amount of your goal?

Once you set your goals, then make it easier to follow through with budgeting.

Have you heard of the 20-second rule? It’s a principle from on the book “The Happiness Advantage.”

The idea is in order to make it easier to form a new habit, you make it more convenient for yourself by placing the tools you need within reach. Make something 20 seconds faster to get to and you’re more likely to do it.

For example, to make tracking expenses easier, you use a worksheet that has budget categories and the date already filled out so that all you have to do is fill in a number. Then you place it on the wall next to your desk or wherever it’s convenient for you to fill it out.

Use the 20-second rule for managing money so that you’re more likely to do it. Some of these are obvious but they’re good reminders on how to make budgeting and saving automatic.

Once your systems are set up, you can be lazy and not feel guilty about it.

1. Set up autopay for recurring bills and debt payments.

This is a no brainer. If a utility or other business offers autopay, do it! Not only will you not have to think about paying those bills every month, but you also save on checks and postage.

2. Automate savings from your paycheck.

Set up savings to be automatically be deposited from your paycheck, before you spend it. Otherwise you’re likely to spend that amount on something else.

3. Use a budget with categories filled out for you.

I like low-tech when it comes to budgeting. I use Living Richly Budget Printables, a budgeting system that I created. to stay on budget. With a printable budget, I can post this on the wall or fridge to remind myself to stay on target.

Even though everything is online nowadays, I don’t always have time to turn on the computer with my toddler running around. Having a worksheet on my desk, makes it 20 seconds easier for me to fill out and keep up with.

4. Track expenses with pre-filled expenses and date.

I used to use Mint. However, I found that since it’s done for you, when I check my expenses, it’s a little too late. What’s spent is spent.

What I mean is that when I actively write down my expenses, I tend to spend less. Since I know I have to record my spending, I am more conscious about spending. It’s a guilt trip thing that works.

Again, I like to do this on a worksheet, the Daily Spending Log (part of Living Richly Budget Printables) since it’s easier to access without having to turn on a computer. And the categories correspond to my budget so after the month is done, it’s easy to transfer the numbers to the monthly budget.

5. Keep a list of monthly and non-monthly bills and when they’re due.

Ideally, most of your bills will be set up on autopay already. It’s also a good idea to have them listed on one sheet with the day of the month they’re due. This way you can be prepared for them and you won’t have to dig through a pile of bills to figure out the due date.

6. Store credit card and bank logins in one place.

Managing multiple credit cards and bank accounts can be overwhelming at times. Put all of your login info in a secure place so that when you need to pay bills or check balances, it’s 20 seconds easier to get to.

7. Use cash.

There are some things I use cash for to really adhere to a tight budget. Groceries and eating out and get out of hand. With cash, you’re limited to what you have. Once it’s spent, it’s spent.

Other things I will use a credit card to pay for like gas. This way more convenient especially if you have kids.

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Last updated on August 26, 2014.

Are You Friends With Your Checkbook?

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Who couldn't be friends with this guy?

Most of us strive to try to keep a budget each month. Everyone has fixed costs that have to be covered, such as the rent or mortgage, insurance, and food. Some people call these a "monthly nut", but I'm not a squirrel. I like to call these "necessary expenses" and have tracked them over time. For many people keeping to a budget was easier years ago. Nowadays, are a ton of electronic payment methods available. Their convenience makes spending money we do not have that much more tempting. Impulse buying becomes easier - all you have to do is swipe either your debit card or your credit card.

This can result in a well-planned budget getting out of the water. Maybe I'm showing my age, but I remember when people would write checks at the grocery store. It slowed everything down. As one of those "quick swipe" credit card people I found this really annoying.

Looking back on it today, I have to respect it a bit. Those people actually spent time balancing a checkbook, so they knew exactly how much money they had. It was a great system for accountability reasons. With today's credit cards a lot of that accountability is gone.

I have to admit that I'm not very good friends with my checkbook nowadays. I thought about it for a bit and here are some of the reasons why:

  1. I'm Lazy - I type thousands of words a day. It may sound crazy, but I barely know how to use a pen anymore. Adding an item to a grocery list is comical.
  2. I Don't Need the Accountability - I spend more than enough time thinking about money by writing for this site. In return this website gives me accountability.
  3. Checks can be Expensive - Last year I switched bank accounts. It's a long story, but since my tenants wouldn't get out when the lease was over, I had to stop accepting payment from them in order to evict them. However, they had the ability to automatic deposit money in my bank account, which allowed them to stay indefinitely... unless I switched bank account numbers.

    So I switched, but that required getting all new checks. It was well over $25 for 120 checks of the very most basic design. That's almost half the cost of a stamp, simply to use my own money. I decided to go home and order cheap checks online. It was much, much cheaper. Not only that, but the bulk pricing was much better my bank's.

Sorry Mr. Checkbook, but for now we'll just have to be occasional acquaintances.

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Banking, Budgeting, Credit Cards

Last updated on August 20, 2014.

Marriage Tension and Money

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This month's Money Magazine had an interesting article asking What's Your Money State of Mind? The article is the result of a survey of 1018 Americans who are 18 or older. The information in the magazine is presented better than the article on the web. It gave more statistics and fewer anecdotal quotes. Regular readers know that I'm more of a statistic guy... anecdotal quotes can be used to show almost anything, even alien abductions.

One particular graphic caught my attention. You'll want to want to click on it for a bigger version that will open up in a new window.

As the graphic reads at the top money is the top source of marital tension. It is both the most frequently argued topic and the source of the most serious arguments.

I would have loved if they could have dug a little deeper on the questions considering it is Money Magazine. It's great to know that Quality Time Together is 30%, but give me more details on the money aspect. What percentage of the arguments are about the lack of money. I'm guessing some 90%, right? What percentage is about good money problems, such as fights about using extra money to buy stock in IBM vs. Lululemon. That's got to be a minority of the arguments, right?

I'm just curious to know those numbers so I don't make too much of a false assumption here that the tension is from a lack of money. Nonetheless, given the recent news about the Americans being unprepared financially, I'm going to go out on a limb and make that assumption. I do that recognizing that lottery winners have their share of money headaches too, it's just of a different variety.

There's an old saying that money can't buy happiness. However, it seems like it can prevent 41% of marital arguments. If that isn't reason enough to take charge of your personal finances, I don't know what is.

Actually, I take that back. I'll give you a few more reasons... the rest of the graphic. If you look at the items almost all of them tie into money.

Household chores are the second most frequent and most serious arguments. We got a cleaning service to take care of much of that every couple of weeks. We still have plenty of chores, but they are much more manageable and very few arguments about them. It is one of our best uses of money.

Quality time together was also cited. The old saying that time is money is apt here. The converse is also true, money is time. Using the example above of hiring a cleaning service, money has bought us time. Hiring a landscaping company can buy time. Hiring a babysitter also buys time. What you do with that time is up to you.

I'm going to skip over raising kids, because I feel that isn't mostly money issue, but more of a parenting strategy one.

Finally there's the question of what's for dinner. Money obviously can solve that by going to a restaurant or hiring a chef to prepare frozen dinners for a week or two.

There's a lot more to marriage than money, but money plays a big role. It's too bad it got put in a small graphic at the bottom of the page. Oh and you are on your own with snoring. Good luck.

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Couples and Money

Posted on April 9, 2014.

6 Debt Management Tips for Avoiding Personal Insolvency and Bankruptcy

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[Editor's Note: The following article was written by Ian Chase on behalf of Solve My Debt. They pride themselves on being the go-to-experts for high quality debt management. They also suggest that you take positive action today against your debt problems and get in touch with the team for expert help.]

When debt is piling up and bankruptcy seems inevitable many people give in to the stress and ignore their problems until a creditor forces bankruptcy upon them. The feeling that you'll never get out of debt can be overwhelming, but with a long-term debt management plan and the right techniques it is possible to slowly and gradually reverse the downward debt spiral and avoid personal insolvency and bankruptcy:

1. Compare Total Monthly Income to Current Financial Obligations

First you'll need to get a picture of just how bad your debt situation is by calculating how much income you're reliably bringing in every month and comparing it to the amount of money you're spending on recurring financial obligations (i.e. - debt repayments, rent/mortgage, insurance, electricity, transportation costs, food, etc.). You'll probably find the need to do some restructuring and budgeting just to make recovery a feasible possibility.

2. Track and Allocate Expenditure with a Comprehensive Budget 

Your budget should be a constant work in progress, changing along with the dynamics of your life. To make next month's planned budget more accurate and effective it is best to track every cent of income and expenditure this month, so you'll have something to reference. At the end of the month create categories for miscellaneous expenses that you normally wouldn't add to your budget, as it is these unexpected and unrecorded purchases that usually push people over the spending limits of their budget. After a few months of budgeting you should no longer feel a sense of financial uncertainty because all of your wants and needs will be adequately planned for.

3. Create a Debt Calendar and Reschedule Problematic Payment Due Dates

Making payments is only half the battle in getting out of debt; if you want to avoid late fees and potential damage to your credit score you need to make payments on time. Unfortunately, sometimes your pay periods don't mesh with payment due dates, especially if you get paid monthly or every two weeks, which is why creating a debt calender will help you get sorted out. Look for the payment due dates that fall on days during “income droughts” when you won't be expecting any payments. In most cases you'll be able to reschedule payment due dates so that they fall near pay periods by simply calling the creditor and asking.

4. Consolidate Debts Wherever Possible

Debt consolidation is the process of signing over some or all of your debts to a single lender who would then charge you a centralized monthly payment on one date for all of your monthly repayments. This not only reduces the stress of dealing with multiple creditors it also puts your repayment obligations together at one time of the month and helps you minimize the possibility of having several offenses on your credit report.

5. Devote A Bank Account To Your Debt Payments

Open a checking or savings account that will be designated to hold all of the money used for your debt repayments. Your primary concern every month second only to living provisions should be to ensure that the account is loaded with enough funds to cover your upcoming payment obligations. This not only helps with discipline it also makes accounting easier.

6. Examine Financing Options

If repaying all of your debts with your current income doesn't seem practical you may want to consider financing options that could give you the assistance needed to repay secured or otherwise urgent debts. Although this practice would be causing you to create a new debt, and you would probably be stuck with higher interest rates, it would get the current creditors off of your back and allow you to postpone or avoid personal insolvency and bankruptcy.

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Budgeting, debt

Posted on August 8, 2013.

Budgeting for the Future Purchases

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Someone reading those 5 words above is probably going to have the reaction of, "OMG, I can't even manage to budget for my current purchases." I understand and I sympathize. If that's where you are, I offer these five minute financial fixes, to help right now. Even if today's budget seems a little tight, you may find it is useful to continue reading.

This weekend, I was thinking about budgeting a bit. That's a little odd for me, because I really don't like to store and track every expense, even when services like Mint make it a lot easier. My budgeting thoughts were triggered when I looked at my car that I bought new in 2001. It still runs well (knock on a Sequoia), but there is going to be a time when it needs replacing. There's a time when almost everything needs replacing.

The good news is that replacing most things doesn't cost a lot of money, depending on what's of value to you. I'm not a fashionista, so much of my wardrobe hasn't changed in the last ten years. Besides a new pair of shoes, my next clothing purchase is likely going to be retiring a Wes Welker jersey to a Rob Gronkowski one if the Patriots aren't able to sign Welker long term ;-). Your priorities will likely differ.

The bad news is that there are still some big items that will need replacing. I've been trying to squirrel away some money each month so that when it comes time to replacing things that I need, I am prepared. I decided to make a short list of things that I'm focusing on:

  • Replacement Car (2-5 years) - I've got low miles on it (working from home pays off sometimes), so hopefully this is still a few years away. I'll prepare now and hope to not have to use it. I'm hoping to buy used next time and keep it to around $15K, but at the same time I'm looking at the upcoming Ford C-Max Energi and thinking that it is good fit. I hope that my car lasts long enough until I can buy it, or a similar used plug-in hybrid, for my target price.
  • Replacement Kitchen (4-6 years) - Currently we rent our apartment in Silicon Valley, but I have a rental property in the Boston suburbs that will need this. Some thing at the property like the washer and dryer have already needed replacing. In any case take a look at your kitchen... and your bathrooms while you are at it and assess what might need updating over the next few years.
  • Furniture (Varies) - Since we have some furniture that will need replacing soon, but other that will take a little while, we decided on putting about a thousand a year into the budget. This overlaps with things such as our mattress...
  • This is all about thinking ahead. Take a few minutes to walk around your home and decide what is right for you. For me it is about, focusing on the first two items on this list can easily run you $20K each.

    If everyone followed this method of planning ahead, many financial disasters could be averted. In my local San Francisco area, funding a stadium for the 49ers was a huge issue and recent events about misappropriating funds have made it more complicated. It never should have got to that place. The previous owners of the 49ers should have been budgeting money to replace the stadium from the 70's when they moved in. They had 40 years to budget for a new park. Income shouldn't have been a problem, because the 49ers had one of the most dominate eras of success in the 1980's. I'm a fan of the Patriots, and even though they built a new stadium for the 2002 season, I hope they putting aside money for 2025 or 2030 when everyone needs heliports for our flying cars... or whatever expenses are necessary at the time.

    Parting Thought: My friends at Ready for Zero have a lot more information on budgeting available. Cutting back on these expenses will help you plan for those in the future.

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    Last updated on June 27, 2012.

Ask the Readers: Do Groupon and the Entertainment Book Save Money?

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Over the weekend, I was thinking about the Entertainment Book. If you aren't familiar with it, you've probably been living under a rock for the last 30 years. It's a book that has a lot of coupons, often of the buy one, get one free variety towards, as the name implies, entertainment activities. When I was child (we are going back over 25 years here), my parents would get the book and often use the coupons at restaurants. I was amazed at how a simple $25 purchase seemed to pay for itself in just one or two meals... and we had hundreds, perhaps thousands of coupons that we could use.

It seemed like we easily saved hundreds of dollars a year. Did we really though?

Before I get my answer on that, let's look at the restaurant's perspective. The reason why any establishment offers coupons is no big secret, they want to bring in more customers, even at a lower price. Restaurant margins when they get a customer in the door are particularly good, so even the buy one, get one free deals are profitable for them. That's especially true if they can convince you through their good food and service to come back and pay full price. My eight-year old mind relished in the fact that we were somehow beating the system, getting a deal.

My 35-year old mind, definitely has a different perspective.

It is very easy to look at these coupons as saving money. Both Entertainment Book and Groupon offer discounts that seem rather large - 50% or better. The cost comes in when the deals lure you into buying more than you normally would. Even getting 50% of every restaurant meal adds up with drinks and/or taxes and tip included. It can easily cost $25 for a dinner for two (even if you are trying to save money at restaurants). It might not be as fancy, but cooking at home is just a fraction of the cost. We have to factor that into the big picture of whether we really "save money" with these coupons.

I think my parents had it right. They used the coupon book every 2 or 3 weeks on meals out that we generally would have gone out for anyway. Rather than have one particular "regular" restaurant, we went to new ones. In some ways that bit of mystery of trying a new place added to the adventure. As a child, I wasn't included into any budget discussions, but it now occurs to me that whether my parents had a formal budget or not, the use of the Entertainment Book was worked into it.

When I look at whether these deals actually save money, I have to measure it in terms of sticking with-in a budget. If you are using the deals to lower your restaurant expenses or stretch that budgeted dollar further then you are saving money. If the deals become an excuse for lifestyle inflation, you may be better off without the temptation.

What do you think? Let me know if the comments below.

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... and focuses on:

Budgeting, Spending

Posted on January 30, 2012.

The Cost of Raising a Child in U.S.

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The following is a collaborative effort with financial writer Marc Brown.

Nowadays many future parents are under a lot of financial stress due to the increasing cost of raising a child in U.S. The cost of raising a child is on steady rise. From the moment your child is born, there is a new expense. It maybe new shoes, new books, or a new bike. As a parent, you want to give the little one the best of everything.

A survey conducted by The United States Department of Agriculture has stated that the expenses for child care, education, and health care has multiplied. For an average income family the range is from $11,650 to $13,530 a year depending on the age of the child. Fortunately, they provide a handy Cost of raising a Child Calculator. (Who would expect it from the Department of Agriculture?) In the calculator, you enter your region, income, the number of children and it spits out the the annual expenses of raising your child. The calculator gives you a nifty graphical representation stating the Overall Estimated Annual costs of various things like housing, food, transportation, clothing, health-care, education and other miscellaneous expenses.

Knowing how much it is likely to cost is one thing. It isn't going to make junior any cheaper. So, here are some quick tips you can consider to reduce your expenses:

  • Use cloth diapers with snappy (replacing safety pins) instead of disposable diapers.
  • Buying branded-name things for kids may give you the satisfaction that you are giving your child the best. However, you can save a lot of money by sticking to brands only with foods, but with clothes you can try out some generics.
  • Reuse the products, clothes or toys of your first baby for the other ones. Buying another crib just for safety purpose is not a great idea as it takes up both your money and the space at home.
  • Try and make food at home for your kids rather than going out for dinner every other day. This will reduce the cost and you can also spend some time with your family at home.
  • Do not spoil the kids. You may want to give them everything even if you have to go without food. However, this may lead to a lack of understanding of the value of a dollar. Praise them and gift them valuables whenever they excel in something.

Take note that the expenses differ from city to city and area to area. The South tends to have the lowest child raising cost. Urban families incur a high expense in comparison to the rural ones. If you have more than one children the cost of raising the other child decreases, naturally.

If you plan your finances well, you can provide your kid with all the happiness and none of the financial burden.

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Posted on March 25, 2011.

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