Frugal Activities for the Christmas Holiday Month of December

by David@MoneyNing.com · 8 comments

Everyone seems to say that Christmas is a pretty expensive holiday but I keep reminding them that nothing is ever expensive unless we choose it to be.  Christmas can be fun, eventful and frugal all at the same time.

Let me share with you some of the activities that you can consider in the next few weeks.  Remember to have fun, enjoy the holidays and not break your piggy bank.

  1. Christmas Walk in the Light (Night)


    Some of you are lucky enough to live in urban cities where corporations spend thousands of dollars decorating their buildings with Christmas Lights so don’t miss the chance to go outside and enjoy it by having a nice walk.

    The rest of us will probably have to look harder but many families will decorate their houses too. There is a whole community close to where I used to live in which every house was filled with lights during Christmas time. It was simply amazing and we would make it a point to just drive over there to enjoy it. (The word seems to have gotten out because there would sometimes be a traffic jam within those side streets in recent years)

  2. Christmas Parties

    christmas parties are lots of fun
    I’m sure many of your companies are having some type of Christmas gathering and it always amazed me that so many people don’t attend. During the Christmas party, everyone is generally much more relax so it’s nothing like the work environment.

    Even though I work at home now, I will be attending Emma’s party as well as my former company’s. (It will sure be exciting since it falls on the same day…)

    You can also host your own party but make sure to send the invitations out really early. If you want to save some money and have variety at the same time, ask everyone to bring food and their favorite brand of alcohol.

  3. Local Events


    Libraries and community centers are great because they always have newsletters that talk about the Christmas events that are happening in the local area. Head on over there if you want to participate because best of all, many of them are low cost (and something free).

    If the event is big enough, even newspapers would talk about it. Last year, I didn’t know that there was actually a Christmas boat show nearby until I saw it on the Sunday paper. It would be unfortunate if I missed it because the display was spectacular to say the least.

  4. Museums and Theaters


    Some museums and theaters actually open for free during special hours in the holiday season. If you are into history or culture (or just want plain curious), find out what offers are near you.

  5. Marketplaces, Town Centers, Malls or Just About Anyplace that People Gather


    Many of these public places will hold special events and themed festivals featuring music, crafts, dance presentations and food samplings for many to enjoy. These are always really fun to go to because not only can you enjoy all the shows, you usually learn something new about a different culture as well.

    Have I missed anything? What do you do that’s both frugal and fun during December for the holidays?

Let Your Children Handle Their Own Finances

by David@MoneyNing.com · 4 comments

let children handle their own finances

Reading the Wall Street Journal’s Sunday column “Yoder & Son” shed light on an incredible easy and effective parenting tip on helping your kids understand personal finance – Let You Children Take Care of It.

Like many, Steve found out about a monthly recurring errant transaction on his son’s checking account statement and started calling the bank when he realized that it was the perfect opportunity for his son Issac to have a money lesson.  So instead of taking care of it himself, he just told Issac about it.

The end result?  Issac got nearly all his money back despite being turned down several times and learned a few lessons:

  1. Never trust someone else with your money.
  2. Banks make mistakes with your money, and most of the uncorrected ones benefit them.
  3. Always check your bank statements.
  4. If you are right, being persistent will lead to your (the right) way.

On the other hand, if his dad took care of it, he would learn:

  1. Nothing.

As parents, it’s understandable to help your kids take care of all these problems but next time the opportunity presents itself, stop in your tracks and let them do it.  They will learn much more doing it themselves than you ever will taking care of it for them.

Below are a list of a few things you may be helping your children do.  Let them start managing it with your supervision.  Like the old saying goes – Practice Makes Perfect.

  • Taxes
  • Managing Banking Accounts
  • Errant Charges Handling
  • Finding a Way to Pay for Tickets (parking, traffic violations etc)
  • Give Them the Freedom to Choose

It’s okay even if your children make mistakes.  We learn from mistakes, and so do they.  If we never even allow them to try when the consequences are arguably lower, how are they supposed to learn so they don’t make them when they are on their own?

To not let them do it themselves is robbing them of the opportunity.  Stop doing everything for them and start today.

How to Plan and Deal With Unexpected Money Drains

by David@MoneyNing.com · 9 comments

unexpected charges can ruin our holidayA man once told me that nothing should be unexpected because we can always expect that something unexpected will happen.  Right now, I’m too upset to figure out whether I agree with this or not because the unexpected occurred to me – I received a bill from my doctor for $100.

“Your health insurance will cover this” is what I hoped for.  “Your insurance didn’t cover Hepatitis A Vaccine. Please pay the balance due” is what I have to deal with.

There’s so much to complain about this bill but instead of the long rant post, here’s how I managed to not let this expensive wreak my budget and my mood (it is close to the holiday season after all).

  1. The Emergency Fund – The tired and true advice of having an emergency fund.  The only reason why we keep coming back to this is because it is truly a life saver.  I know many of you don’t have one, so start contributing to one right away.  If you haven’t set one up yet and feel that you don’t have the means to do so, try starting small because even $25 or $50 a month can add up over time.
  2. Stop Stretching the Budget – In other words, do not live paycheck to paycheck anymore.  We are extremely good at expanding our spending habits, so many of us gobble up as much of the paycheck as we can.  Consider keeping our spending the same when we get a raise, or try the many ways to cut spending.
  3. Dispute It –  If it’s an overdraft fee, try calling your bank to see if there’s a way to get it waived.  As for my bill, my doctor did offer to let me pay with 4 installment of $25 instead of $100 if that helped.  Try to be calm and find a solution instead of being frustrated because the person on the other side of the phone can really help.

Unexpected or not, expenses need to be paid sooner or later.  While it’s easy to feel upset about these charges, some preventive maintenance can keep it from ruining our mood (or in my case, a great start to the holiday season).

Pay the unexpected bills with money we already have and stay cool.

Why Investing in Stocks This Year Was Not a Financial Mistake

by David@MoneyNing.com · 29 comments

In a matter of weeks, I saw my portfolio erode at a rate that I thought was only possible in months/years instead days/weeks. The other day, I was looking at the disastrous performance of my stock investments through financial statements and asked myself one question: “Did I make a financial mistake by investing in stocks this year?”

These “after-the-fact” type questions usually does nothing but make me feel worst but I felt the need to give an honest attempt at answering because being invested this year was by far the most detrimental to my wealth.

As my thoughts race through my brain, the answer became increasing clear to me that starting to invest in stocks was not a financial mistake. The decline was definitely something I wish I avoided, but to call it a financial mistake was just not correct.

To carry on the discussion further, let me share with you some of the notes I took in my imaginary wall:

We Decide Based on Possible Outcome, Not Results.
When I chose to pour my savings into the stock market, it was based on the rational decision that:

  1. Stocks outperformed other asset classes in any 20-year period
  2. I was young enough to have many years of income to cover any potential losses
  3. My time horizon was long

Due to the fact that we can’t predict the future and there’s no “undo/retry” in life, we decide the path to take based on all the facts present.  My investing approach was based on past history and my circumstances. My wealth took a disastrous dive but short term performance was simply not part of my consideration. I’m looking for long term gain, and these types of short term decline was what I was willing to tolerate and should be expected.

I Actually Made the Choice
Indecision is always the worst mistake that one can make.  If I did not decide to begin investing during the good times, there would be no way that I would start now when everything looks dark and gloomy.  As a result, I may never start investing.  It would preserve my capital this year, but earning 3% a year (and being taxed every single year) is definitely not advisable over the long run.

What I Do Consider a Financial Mistake
Let’s face it, many of us lost more money this year than any other. However, financial mistakes should be left for those decisions that we make when the facts points to the likelihood of financial disaster (Taking payday loans, splurging on credit cards without the funds to pay them off immediately, buying a new car just to keep up with your neighbors etc come to mind).

Deciding to start investing in stocks will never be a financial mistake. Ever.

8 Bad Things You’re Teaching Your Kids About Money

by David@MoneyNing.com · 17 comments

This is a guest post from Jonathan, one of the writers at Master Your Card.  The blog is all about teaching people how to be fiscally responsible, with the focus on helping readers to get out (and stay out) of credit card debt.

If you’re a parent then you probably know that your kids are always watching you and remembering the things you do. You may tell your kids that swear words are bad and you should never use them, but the one time you drop something on your toe and let out a hearty stream of cussing your kids think this gives them carte blanche to indulge in an occasional swear word.

In other words, the things you do have a huge influence on your kids whether you like it or not.

This is especially true when it comes to dealing with money. As a parent, you need to realize that you’re setting the stage for how your kids will eventually deal with money as adults. Remember: they watch everything you do, and they figure that’s the way it is supposed to be done.

Are you teaching any of these bad things about money to your kids?

  1. Things just land in your hands. You’re walking through the store and your kid sees a candy bar she wants, so you grab it and give it to her. She then sees a coloring book she wants, and that lands in her hands too. At what point are you going to start explaining to your kids that everything in a store costs money?
  2. Electricity is free. Even preschoolers can start to grasp the concept that all the resources they use cost something. Once they understand this they might actually start turning the lights off when they leave a room.
  3. Saving isn’t a priority. Every kid should have a piggy bank and a savings account along with a parent who is willing to take the time to teach the basic principal of saving money. You should also make it a point to save money each month, and to discuss your saving methods with your kids.
  4. The ATM is magic. The next time you stop at the ATM to get some cash, narrate the process to your kids. Otherwise you might inadvertently send the message to your kids that any time you need money, all you have to do is ask the ATM really nicely and voila.
  5. Everyone has enough money. If your kids don’t ever witness you donating your time or money to people in need then they may not realize that there are people in the world who need help. Kids should learn that money can be a means to help other people and not just a way to buy a lollipop.
  6. Delayed gratification? What’s that? Do you decide on impulse that you want something expensive (a new car, a new TV, or whatever) and then just go out and buy it on credit? You’re teaching your kids something dangerous: You don’t have to budget and save for the things you want. You can just get them and pay later.
  7. Cash isn’t very useful. Do your kids ever see you using cash? If all they ever witness is you using your credit or debit card then they’ll have a hard time understanding what cash is all about. Make an effort to use cash once in a while and help your kids understand the basics of actual cash.
  8. A job is just something we do. Do your kids actually understand why you head off to work every morning? Unless you tell them, they may not make the connection between working and income. Teach them about working to earn money.

Take a look at how you handle your own finances and then realize that this is probably how your kids will handle their finances unless you make an effort to teach them otherwise. If the thought of your kids eventually handling their money as you do now makes you shudder, it’s time for a change.

Health Care Flexible Spending Account (FSA)

by David@MoneyNing.com · 4 comments

With my wife’s job change comes the addition of flexible spending accounts (FSA) for us to consider.  A few days ago, we looked at the dependent day care FSA so let’s round up the discussion by looking at the health care version today.

Health Care Flexible Spending Account

With any FSAs, the main benefit is of course the fact that anything you spend on health care is from pre-tax dollars.  While it’s arguably more work involved on our end to set this up, the cost savings benefit far out way the hassle.  Also note that for you and your dependents do not necessarily have to participate in your employer’s health plan in order to participate in their FSA.

How it Works
There are generally a few steps involved in the whole process:

  1. Towards the end of the year, estimate how much you and your dependent’s out-of-pocket medical expenses will be for the following year and elect that as your annual amount.
  2. An equal portion will be divided and taken pre-taxed from your paycheck towards the FSA.
  3. Whenever you incur medical expenses, submit a claim directly to your FSA or use your debit card (more on this below)

Ways to Get Your Money
In the old days, the only way used to be to submitting your claim by filling out a form and including all your documentation.  This is followed by some days of waiting for checks to come just so we can line up at the bank to deposit it.

Direct Deposit
Nowadays, many providers allow us to setup direct deposit.  So at least we don’t have to wait for that check and wonder if it got lost in the mail.

Debit Card
Another relatively new option is the FSA debit card.  The convenience of this is amazing because you can just use the debit card as the form of payment and all FSA-eligible items will be deducted.

Do note however that while the IRS has required department stores, discount stores, and supermarkets to have the system in place to automatically determine eligible FSA items on the fly by the start of 2008, retail pharmacies have until the start of 2009 to do so.  So take care in reviewing your receipts to make sure that all eligible items are being deducted correctly while all systems are either not implemented yet or relatively new.

Some Important Points to Consider

  • Save all your receipts.  Your FSA provider may request for additional documentation for verification.  Also remember that you still need to submit the receipts after you use your debit card for the purchases or else those expenses will be considered ineligible.
  • You will receive the full amount of your FSA annual contribution even if your payroll deductions have not reached the full amount.
  • Note the submission deadline for your claims because claims submitted afterwards may be deemed ineligible.
  • Unlike the dependent day care FSA, the IRS does not cap the contribution limits of the health care FSA.  However, your employer may have a limit so remember to find out.
  • Remember your annual contributions and don’t waste unused portions because you lose what you don’t use.

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