The Boat - A Symbol of Our Philosophy

Over the past several weeks I have talked about my Frap Fund. You know the one where I don’t go to Starbuck and put the money away. Or the money we save with coupons goes into a savings account.

I kind of fell off the wagon this week and was only able to save a little bit but @TheDeeView and I had a realization which will amount to a tremendous savings.

As summer is approaching, faster than I thought, I started the search for a boat for us to use over the summer in our mountain escape. I even took the 10yr old boat shopping one Saturday a couple of weeks ago, only for the 2 of us to be overwhelmed.

The onto Craig’s List and Boattrader.

I was determined to find the best boat and a great deal (you know, being a great saver that I am).

Then @TheDeeView and I started talking about the money to own a boat and get it in the water this summer. What started out as a boat in the $9,000 range quickly became double that by the time we added servicing, dock fees, equipment, skis, wakeboards etc. Oh my God. It became crazy.

Halt! Slam on the breaks, stop this crazy nonsense and smell the roses. We both decided at that moment a boat was not the great idea it had been!

We decided to save the money, get rid of one of our credit cards and find different ways to enjoy the summer in the mountains.

At the end of the day, I ended up buying a portable tetherball set for kids, which I can play and guess what we will get more enjoyment out of that by playing together and getting exercise. We’ve added biking to the mountains and walking hiking and just hanging out.

My god we’ve saved $17,000 just by doing this one thing!!!

Now that’s a FRAP FUND contribution!!!

Oh and by the way we were able to find a great sleep away camp for the kids for one week and we are still ahead.

What the boat purchase made us do was to stop and really consider our own lives, spending habits and ways for which we can spend money more efficiently and save money.

We are now assessing other strategic cuts in our lifestyle that will actually give us a better quality of life and at the same time boost our savings.

Now that is not to say we won’t buy the boat next year, but for now we are about filing our Frap Fund.

Work this in with my other #BudgetBuddy tips and have fun saving.

Saving money should be about fun and not a chore. I love seeing my Frap Fund grow.

When I am done with this blog I will actually be transferring money to the Frap Fund because we decided not to go out to dinner this weekend which would have cost us, family of 4 an easy $120, instead we BBQed and saved an excess of $80 for the Frap Fund baby!

That’s what I’m talking about!

Frap Fund - The Sequel!

Frap Fund #2

Well a few weeks ago I started to talk about savings and how we opened a Frap Fund to transfer all of our savings into.

SO to start this blog off I thought I would just state that since I am blogging about it I should also report my results for the last week.

This last week we saved $281 by not going out to dinner twice, store coupons, store clubs and wait for it, I only went to Starbucks once during the week, I must be going thru coffee withdrawal by now.

But alas my coffee was free from the office and yes its Starbucks.

This week I also took time out of my day to go to 7 year olds first grade class and talk to them about savings and why it is so important. I delivered to the classroom 22 piggy banks and the kids were in love with them and they couldn’t stop talking about both savings and other ways to save money.

We also had the teacher fully engaged and she introduced the concept of the kids filling their piggy banks then transferring the money to a savings account at the bank, thus allowing for the addition of interest.

Meeting with these kids opened my eyes to how we, meaning us everyday consumers, have not done a good job with savings. We have been a spend-it society even above our means.

But these kids don’t have any of those preset conditions to spend yet! I think it is our job as adults to teach these kids about savings.

I mentioned to the kids that I felt money was an emotion and some of the kids understood and even gave me other emotions. These kids had it down now if we can just keep them on the growth path, happy days.

Since starting to talk about the Frap Fund lon my blog I am now finding people who I now have read it and we have started talking about savings and credit card debt again.

And speaking of savings there was a great little article in the LA times that talked about if you had bought $5,700 worth of Apple stock when the MAC came out, approx. 1997, instead of the MAC, it would now be worth more than $330,000!

Wow is what I said.

In addition, if you had purchased one share of Apple stock instead of the ipad when it came out you would have made an additional $70 on that one share in the past several weeks. But hey at least I have my iphone; I don’t want to even see what the stock has done in that period of time.

I may regret buying it!

Nah never!!!

The End Of FICO As We Know It

Okay let’s follow along with a recent blog and talk about credit cards and credit scores.

I think it’s about time we all revolt against the so-called FICO system.

I don’t know about the rest of you, but this week, I have had my fill of the credit card industry as a whole.

One of my clients shows up with a letter from Wells Fargo saying they will reduce the interest rate on the credit card if a payment of 10% would be made.

Sounds great right?

But when you go on to read the fine print “Wells Fargo will reduce your credit limit by the amount of the payment”. Are you F*%#&ing kidding me!

These banks take TARP funds, oh ya, that was taxpayer money, then they turn around and screw all of us.

The reduction in interest rate is great; however reducing the credit limit will negatively impact your FICO score!

Come on Congress when are you going to grow some balls and deal with these institutions?

I thought part of the bailout was to help them (the banks) so they could turn around and help the individuals. Well if the way they are helping people is to damage their credit scores, then I ask; how that helping?

We need real financial reform; the credit card reform was a joke. It allowed the banks several months to screw us and they are still doing it. When is the Federal Government going to step up???

Whatever happened to the day when banks would work with their customers and reach across the desk and shake the hands and say we can do that?

Let’s start by getting rid of this lame ass FICO system which is now terminally antiquated due to the recession.

Wells Fargo you should be ashamed of yourself (and Goldman too!)

#endofrant

Your Frap Fund & You

Throwing money away. We can all agree that’s a bad thing, right?

But how do we make sure we aren’t doing it ourselves? Everyday?

Money has a very emotional component for just about everyone I know.

Like me. I never just throw money into my wallet; I always put the bills in order and facing the right way.

So yes, money is an emotion and the use of it should be as well.

I coach my clients to understand the emotional impact money can have and use that to their advantage.

An example? My so-called “Frappuccino Fund” (Frap Fund for short) is such a way.

First I always recommend that a client trying to pay off debt set up a separate bank account fund.

And we call it their “Frap Fund.”

Each time they are out and about and ready to spend money, I ask them to think about it first. Is it really worth the money?

If they decide no, they note how much they just saved. They do this each and every time they would have spent on a coffee, a dinner out, breakfast, etc you get the picture.

For each time you resist the urge to splurge, transfer that amount of money from your regular checking account and put it into your “Frap Fund” account. Which should NOT have an ATM card or any kind of easy access to get the funds. The point is to SAVE money, not use it as your ‘paint the town red’ money (that is in a completely different account if you are anything like my wife!!!)

Several years ago my wife and I decided to practice what I preach.

We set up our very own “Frap Fund” and we began to transfer money into that fund every time we saved money by NOT doing something on impluse.

We went as far as to even save the money from store coupons and those store clubs.

Let’s say I was on my way to Starbucks, which was a daily occurrence for a Frap and then of course a muffin, I would instead go to the office where the coffee is free and transfer the $5 or $6 straight way from my bank account to my online account.

After one year we were able to save over $8,000 doing this!

To me that was real money saved!!!. And, of course, @TheDeeView had to something to spend on shoes from @Zappo's. But wait that is another blog!

The beauty about doing this technique is that it creates a win for you and helps build savings, which is a vital factor in financial planning.

I think as we all move forward from this last recession we really need to focus on savings while reducing our debt load.

Plus, as you might notice, one of the components in the word Fund is Fun!

I find this method of savings, that can involve the whole family is actually fun!

Try it for a week and let me know in the comments below how it went and how much you saved!

Debt & Taxes - One Might Be Avoidable!

Debt and Taxes

I know it is supposed to be death, but somebody else can talk about that. I am more interested in Debt. It is as unavoidable as we seem to think?

I’ve been reading a lot lately from financial planners, after years of hearing about it, payoff your credit card debt!

I totally agree with the philosophy of being out of credit card debt especially today as rates rise and the credit card companies are harder to deal with.

But for me the question always arises which do I payoff first?

A high balance card or a low balance card with a lower interest rate?

Conventional wisdom always says to get rid of the high rate card first and then go after the lower interest rates. While I agree with this on principle, I find that the never works that way! Mainly because my clients never feel like they are getting ahead!

To me the credit card debt is not only financial it is also very much emotional. I want my clients to have a win!

Hell I want a win too!

So my approach is a little different.

I advise my clients to get rid of one debt as fast as they can, even if it means paying off a low balance low interest rate card first. Then move to the next one that is easiest to pay off and so on.

With this plan in place, my clients start to feel the emotional side of having a win.

Remember money is emotional. Treat your money well and it will be there for you.

Another technique I use to get people in the habit of paying down their credit cards (and not using them in the future unless it is an emergency) is to pay off each new charge. The day you make it!

Get in the habit of each and every time you put a purchase on a credit card, that you go home, and now it is so easy with the internet, and pay off that exact amount (or hey, maybe 10 bucks more!) on your credit card account.

This way, you are really using cash and not increasing your credit card debt.

This is a discipline and I know that is seems tough to follow. But I am telling you if you practice the techniques I have outlined, you can and will have a win!

Zappos! My Role Model! #Seriously

Hula Hoops? An accappella singing group? A core value of Create Fun and a Little Weirdness? This is all in a business plan? For a real business? A successful business?

What ever you may think of Zappos (and to tell you more about the shoe experience of Zappos, check out my wife’s blog at www.TheDeeView.blogspot.com) the company is actually the business model we use to run our business. Now we are accountants, with a rather serious selection of financial services to offer. How the could we possibly have anything in common with the retail SHOE Giant of the World?

Well, for one thing, Zappos has the Zappettes. (We are too small to have the Greg Ettes, but I’m sure that is coming). This is a group of staff that may spontaneously serenade visitors. The receptionists have Hula Hoops, which they may use on a regular basis. (Okay, we don’t have Hula Hoops yet, but we are in the market for a Gong.) The Customer Service Department (the Loyalty Team) have no limits on the amount of time they will take on the phone with each customer (never gonna happen in our office, but hey?)

But the most amazing thing, is that they have a really committed and caring take on customer service for their clients. We do that (though not as well without the Hula Hoops I fear).

They have values like: Create Fun and a Little Weirdness (@TheDeeView makes our staff dance during retreats. They hate it when they see her lugging the Boom Box into a conference room), Deliver Wow through Service (Hey, some of our clients are saying “WOW, the IRS hates me”, but hey, they are saying WOW People!) Embrace and Drive Change (it is an accounting firm, but we are all about making it great for our clients), No snobs (I made that up. I just hate snobs.)

Staff at Zappos have to be prepared to do the wave at any moment. And they have crowns you can wear if you are having a particularly bad day. (We don’t offer crowns, but you do get a free piggy bank.)

They go through 160 hours of Customer Loyalty Training. (Can we send our staff there?) And they love to have their staff Tweet about their experience working at Zappos. (Oddly, though we encourage our staff to do the same, they keep asking for extra money to stay late and Twitter. I don’t understand this myself.)

The point of studying the Zappos business model, is to see if we are giving the ultimate in customer service at our firm, making the most money for everyone and doing it in an efficient manner (cuz time is GOLD, isn’t it?).

So while we may not have Hula Hoops, Greg Ettes, or our Giant Gong yet, that doesn't mean we don't want our office to make people feel as good about paying their taxes as my wife does about her shoes!

March Madness.... And not the good kind!

Just 19 more days to go in this tax season.

And yep, the crazy has hit the fan!

People who don't want to pay any taxes whatsoever, yet they have not made investments in their business, nor any charitable contributions and don't travel for work.

Hmmm... I'm good, but...

Plus the reality is, if you are paying taxes, you've made money. To grow your business, you are going to pay some taxes! #clearlyanovelconcept

Then there are the people trying to save their homes or even commercial properties. You have to love their verve and pioneering spirit but some are getting a little 'creative' #possiblynotwithinlegalboundsthough

On the good news front, B of A announced some new plans of their own to help homeowners (I like to think it was in direct response to my post a few weeks back #delusional)

We are also on a big push to have our clients fully fund their IRAs to the max. One of my client saved $2,000 in taxes. That was a 33% return right out of the shoot.

We're also fielding a ton of questions from clients about what can be considered deductible for business travel ( the Sunday LATimes article 'Is my Latte Deductible" didn't help anything!)

Then there's the small businesses that can qualify for SEP.

Whew, I'm tired just writing about the week, let alone facing another one!

Next blog will be only 12 days from April 15th (just to warn you it might be 3 lines repeated over and over Get me out of here! Please! I'm serious!)

'Til then be happy and keep your darned receipts organized!