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I Just Saved $200 Repairing My Washing Machine…or did I?

March 24, 2010 · Filed Under Random · 8 Comments 

“What in the world?” I said as I opened the lid of our washing machine.  My wife had asked me to put the load of laundry into the dryer but it was still soaking wet.  The washing machine had drained but the clothes were still full of water and detergent.  “Uh oh,” was the next thing that crossed my mind.  Being the optimist that I am, though, I set the control dial to “Spin” and pulled the knob. “Uh oh,” again…noise was being emitted by the washer but not the right noise and, even worse, no movement of the agitator.

Numbers, with dollar signs in front of them, started wracking up in my head (and up and up).  The last time someone came to repair our refrigerator, it was $90 just to come to the door.  Then there would be the cost of the part(s), and the labor to take the thing apart, fix the offending piece, and put it back together.

I’ll fix it myself!

My workspace with the machine taken apart..note the laptop in use

So, I told my wife I would look into fixing it myself.  It was Saturday afternoon and this was our last load until the middle of next week, so I could buy myself some time.  Actually, it took just a few seconds on Google to find what was most likely the problem and the part would only cost $10-$20!  I’m all in now, I decided.  I was going to go for it and try to repair it myself!  Now, I had never even attempted to do such a repair before.  Sure, I occasionally take electronic equipment apart for tinkering purposes, but I’ve never successfully repaired anything that I’d taken apart (when I was a kid I made a flashlight, does that count?).  This would be different, though; this washing machine had to be repaired!  (I thought: worst case scenario I would have to pay someone to fix it, but that’s where I was already…just maybe I could make it work).

Fixed!

And I did!  I fixed it!  I took it apart and fixed it and I have the pictures to prove it!  By the grace of God, I was able to disassemble it without hurting myself or anyone else, replace the part, put it back together, and make it work!  Let me tell you, accomplishing that was a phenomenal feeling! (Not spending money while simultaneously finding that feeling of accomplishment – now that is a win-win!)

I saved $200!

So what did I end up saving?  Let’s see, I wildly guess that the repair would have cost somewhere between $150-$200.  Ok, so I spent $20 for the part plus I donated $10 to the guy who put the pictures up on his website that showed all the steps to complete this repair (This is the site you want to check out if you need to repair a Kenmore washing machine!).  So, that saves me about $170 – time to celebrate!!  Let’s hit the town for a celebratory dinner maybe?  Maybe I’ll get me some bike gear that I’ve been coveting.  Oh, I know, how about a tuner for my guitar. Man, that extra $170 is going to come in handy!

Am I sure I saved $200?

Now hold on a second, if you’ve been reading this blog for a while, you might know what I’m going to say next.  Let’s ask the question again: How much money did I save today?  $0…in fact, I actually spent $30.  Sure, I do have a working washing machine.  God provided for us such that it only cost $30 instead of $200.  That’s all true.  But that doesn’t mean I should go and spend the amount I “saved.”  I’m sill worse off by $30 than I was Saturday morning.

I know, I’m being a total buzz-kill.  I’m not trying to be completely goofy about this.  Fixing the washing machine was an awesome feeling!  I came into the family room yelling about it (much to my wife’s chagrin as she was trying to talk to her sister on the phone….and later to her mother on the phone…yes, the yelling went on for some time).  Just remember not to tell yourself these little lies about money that get us into trouble.  You can’t save money by spending money (even with a coupon!).

That’s what we tend to do, though, right?  Look up to the title of the post, “I saved $200!”  Did I really save that much?  First, I just guessed the repair would be $150-$200.  Of course, I then rounded up and started touting the higher number but that’s not even correct as I spent $30 to do the repair.  Ok, so I saved $170, I’m going to go spend that $170!  No!  In situations like this, people tend to feel like they made $170…no, no, no!  Be honest with yourself and don’t play these games with money.  I’m thrilled to not have spent $150 or $170 or $200 on the washing machine repair, but that does not mean I now have an extra $170 to go spend!  Again, I do not now have $170 more compared to Saturday morning, I have $30 less!

Did I really fix it?

I took pictures to prove that I fixed it.  Unfortunately, it didn’t strike me until afterward that I was the one taking the pictures so none of them show me actually working on the machine!  You’ll have to take my word for it!  Here’s proof that it was actually working after the repair (ignore all the shoes floating at the top, I have no idea what my wife was doing with those in there…yes, yes, washing them, of course, but it just looks strange!).

Weekly Bible Verse – Wise People Save

January 25, 2010 · Filed Under Weekly Bible Verse · 1 Comment 

In the house of the wise are stores of choice food and oil, but a foolish man devours all he has. Proverbs 21:20 (NIV)

Once again we see how extremely practical the Bible turns out to be in its wisdom and advice.  Why should we save some of our income and resources each month?  Is this something we really need to worry about?  Of course, most people would probably say it’s a good idea to save (though saying it and doing it appear to be two very different things in our society nowadays!).  Now we see that this is much more than just simple common sense, rather it is Biblical wisdom!

Depending on the circles that you run in, you might have heard it said that you should not “presume” upon God (that usually means you shouldn’t go into more and more debt assuming that God will bail you out of whatever money problems you bring upon yourself).  Maybe you know it as the story of Joseph shielding Egypt from seven years of famine.  Quite possibly images of Dave Ramsey railing about the importance of an emergency fund run through your head.  Maybe thoughts of your Grandmother’s advice to save up for a rainy day come to mind.  Or you might have read it to your kids as the fable of the ant and the grasshopper.  However you heard it, it means the same thing and it comes from the Bible – wise people do not “devour” all they have, instead they save up for their future needs (to keep Murphy from moving in your spare bedroom as Ramsey might say).

God bless and have a great week…

BFN Book Review: The Automatic Millionaire

September 23, 2009 · Filed Under Book Reviews · 2 Comments 

A Powerful One-Step Plan to Live and Finish Rich

By David Bach

BFN Book Reviews

My, my, my, I have not done a BFN book review in a long, long time.  The main reason is that I have not finished a PF book in quite a while, actually.  I’ve started some, but have not been able to make it through any (busy, busy, busy). Well, I was poking around at the library the other day and picked up one I’ve been meaning to read for a while, David Bach’s The Automatic Millionaire, and it didn’t take me very long to make it through this book.

What is this book about?

This book is a general personal finance book.  It pretty much covers the basic PF topics you’d expect to see in an overview book and it doesn’t go into tremendous detail on them.  For instance, there is no detailed explanation of mutual funds or asset allocation or anything like that.  But its power is in its simple message – figure out how you want to save, invest, pay down debt, and then automate all of it.  Sure it’s pretty simple, but it is also powerful and effective.

Who is the author?

David Bach is a financial planner who has written a number of books and hosts seminars under the “Finish Rich” flagship.  His other books include Smart Women Finish Rich, Smart Couples Finish Rich, and The Finish Rich Workbook.

What are the best parts of the book?

As full disclosure, I must admit up front that this is my kind of book!  The main one that Bach teaches is automating as much as possible in your financial life.  I wholeheartedly agree with this concept and I believe that I am in much better financial shape today because I automated some of my financial strategy years ago.

Besides automation, another area where the author will grab some proponents is that he hates budgets.  If you hate budgets, then this is the book and the plan for you (and if you hate budgets and love automation, you are floating on cloud 9 when reading this book).  Unlike Dave Ramsey, Bach claims that budgets don’t work because they are unnatural and no fun.  Instead, he proposes avoiding budgets by basically automating as much of your financial plan as possible.

Another foundational concept the author presents is to pay yourself first. This, again, is critical to achieving your financial goals.  If you wait until the end of the month or year to save, there won’t be anything left to save.  Instead, you must do your saving at the beginning of the month before taking out any money for bills and living expenses.  And after you decide how much to pay yourself first, then you automate this process.

If you are asking, “David, where do I find this money with which to pay myself first?” well, he has an answer for you there.  He uses the term “The Latte Factor” to explain those things that, though they are small expenses, add up over time if we do them often enough.  He challenges his readers to track every penny of spending for a few days to expose their Latte Factor, whatever it may be.  He then proposes that they start by cutting down on these expenses and saving some of that money instead.

Finally, and what I found most interesting in this book, is that the author devotes a chapter to automated giving.  Again, I do feel that tithing is of critical importance to a financial plan (and I automate my giving as well).  He is very careful not to offend anyone with this chapter but he does discuss the importance of giving and mentions how those who give money away tend to have more money flow back to them.

Finally, Bach does a great job of encapsulating why we should be taking care of our finances and planning for our futures (hint, it’s not just to get rich and buy a huge mansion or something):

Becoming an Automatic Millionaire is not simply about accumulating wealth.  It’s also about relieving stress and worries about the future-about putting yourself in a place that enables you to enjoy life now as well as  in the future.  In other words, having an automatic plan should not only change your future, it should also change your present.

What is not-so-good about the book?

As I mentioned, this book is not a complete detailed overview of everything financial.  On second thought, maybe that is actually a good thing.  If you are looking for detailed investing strategies or asset allocations, then this book will not contain what you are looking for.  Well, that’s pretty much all I’ve got – there’s not much to complain about with this book.

So what is my recommendation?

I definitely recommend this book for a read – especially if you don’t like budgets and you like automation.  It is a quick read, the author keeps your interest, and he provides very practical advice.  In fact, he goes so far as to include numerous phone numbers and websites for specific companies to make it oh so easy to take the next step and get started.

In fact, this book actually inspired me to take action.  As a result of reading this book, I increased the contribution into my 401k.  I also thought about increasing my wife’s contribution and accelerating our mortgage, but haven’t pulled the trigger on those yet.  That notwithstanding, what is more important than a book that actually causes you to take action?  So grab a copy of the book or check it out from your local library (that’s what I did), but do read it.

Want to borrow this book? Search your local library

Want your own copy? Buy this book now at Amazon.com

Check out the books I’ve chosen for my virtual bookshelf

Financial Peace University Lesson 1 – Super Saving

September 18, 2009 · Filed Under Financial Peace University · 1 Comment 

My wife and I attended our first Financial Peace University class Wednesday evening with a bunch of people from our church (check out the introductory post for this series) I was really excited to see the large turnout.  We listened to Dave Ramsey speak for about an hour (via DVD of course) and then had some brief discussion.  The majority of this week’s discussion was everyone introducing themselves and telling the group why they were attending the class.

I was quite happy to see that there is a great deal of diversity in the class.  The attendees range from an 18 year-old guy, to some young married couples, to some couples with young kids, to some couples with college-aged kids, to those already retired.  There was also significant diversity in the answers to why each person was attending.  Some people just wanted to do a check up on their finances, others wanted to get out of debt, some wanted to prepare for having children or sending them to college, and others wanted to get on track in preparation for retirement.  I said that I was here because learning about and discussing personal finances is one of my passions but I was most excited by the opportunity to take part in a PF class with my wife (she said she was there because I signed her up)  I’m optimistic that all this diversity will lead to some interesting and useful discussion over the course of the, um….course.

Baby Step 1 – $1000 in an emergency fund

In the DVD, Ramsey highlighted a number of topics that he will expound upon in later lessons.  For instance, he introduced his “baby steps” concept where he believes making small, focused changes will eventually lead you down the path to where you want to be.

He mainly focused on baby steps 1 and 3 this week.  Baby step 1 is to, as quickly as possible, put $1000 in an emergency fund.  If you are making less than $20,000 per year, then he suggested you change that number to $500.  He underscored that this is not an investment, rather it is insurance, so put the money in a safe,  liquid fund like a money market.  Then, DO NOT TOUCH IT.  It is there to provide peace of mind if anything unexpected happens (and he drove home the point that something unexpected WILL happen, so get ready).

When is a car crisis not just a car crisis?

I found it most interesting when he discussed what happens if you are not prepared for unexpected expenses.  For instance, say your car breaks down and you have a large repair bill.  If you are prepared, you just pay the bill without incurring debt and move on – car crisis solved.  If you are not financially prepared, however, then not only do you have a car crisis, but now you also have a financial crisis.  Imagine the stress on you if every time you have a crisis (car, health,whatever), it triggers an associated financial crisis.  Actually, since most people in the US do experience that phenomenon with each crisis, maybe we should imagine how much less stressful it would be to just take some cash out of your emergency fund and pay the bill….financial crisis averted.

Wealth building

Ramsey also gave an introduction to wealth building.  His two main points were that you must be disciplined about building wealth and you must remember that it is a marathon, not a sprint.  He also suggested that you automate your saving and investing and showed the power of compound interest with the famous example of 2 brothers investing.  One invests $2k from age 19 to 26 (a total of $16,000) and then stops.  The other doesn’t start until age 27 (I guess they’re twins) but then puts the same $2k every year until age 65 ($78,000 total).  Even though he has invested much more money, the late-starting brother still ends up with roughly $700,000 LESS (assuming 12% interest) at retirement.

My take on the first lesson

In summary, Dave is a very good speaker.  Did you ever have the experience where you’re at church for Bible study and in the next room that class is watching a DVD of Beth Moore teaching?  Sure, your class is interesting and all, but it never quite seems as fun as those women watching Beth (your main clue is the periodic uproarious laughter).  Well, Dave is very funny and, during the first lesson at least, is able to really hold your attention and make the lesson quite entertaining and enjoyable.

I’m on-board with his saving first mantra, I already have an emergency fund, and there wasn’t much time for discussion this week, so I didn’t learn anything terribly intriguing.  Still, I am very much looking forward to the next class  (though I am distressed to say that I will miss class next week.  My wife and I will listen to the CDs provided with the kit and I hope to post on the lesson and some of our personal discussion).

So, are you intrigued?  Does preparing for and avoiding stressful, debt-inducing, financial crises pique your interest?  Check back for more highlights next week or check out a class for yourself either at a local church or organization or sign up at Ramsey’s website to take an online version of the class.

Get $100 from Suze Orman & TD Ameritrade

February 18, 2009 · Filed Under Random · 2 Comments 

A friend pointed me in the direction of Suze Orman’s Save Yourself website yesterday for a very interesting offer.  Suze and TD Ameritrade are offering you $100 to open up and consistently fund (there’s always a catch!) an account there.  Check out the details on this page .

To get the $100, you will need to open a non-retirement Save Yourself account and deposit at least $100 per month for an entire year.  At the end of the year, they will drop in another $100 to the account.

A few things to keep in mind

The account type is a Money Market Deposit Account (MMDA) with a variable interest rate.  Currently, the interest rate is only 1.0% and (of course) subject to change at any time.  That’s a pretty low interest rate compared to some other high-yield savings accounts like EmigrantDirect (2.4%) and  HSBCDirect (2.45%).

On the other hand, those banks aren’t going to give you an extra $100 at the end of the year.  If you are going to put in close to $100 per month, you will come out significantly ahead by opening up the Save Yourself account.  On the other hand, if you have a lot of money to deposit each month, you might be better off with a higher yield (Frankly, if you have that much money to deposit each month, you probably shouldn’t be putting it into a savings account, but that’s a different post)

The account is FDIC insured

In light of today’s economy, I’m sure that the first question you asked yourself was, "is this account FDIC insured?"  A very important question and yes, it is according to their website (I would not be putting this info on here today if it was not FDIC insured).

Get into the habit

I really like that this offer provides an incentive to get you into the habit of saving.  If you aren’t currently "paying youself first" and saving regularly, this is a great way to get started (with a nice reward attached).

Oh, yeah, you also get online access to Suze Orman’s book Women & Money. (I don’t know if men are allowed to read the book or not, but they can take part in the Save Yourself promotion).

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