Budget Sense

If you are paying cash, don’t fill it up 100%, instead stop at 98% or 99%!

Let me explain why: If it is going to cost you $65 to fill up your car, you should stop at $64.75 or $64.90 etc.  Why? Assuming you are paying with cash, this will get you a few cents back. When you add it all up, it will mean hundreds of dollars in spare change in the long term. Deposit it in your piggy bank for a nice future return.

Think about it: $0.20, $0.35 or even $0.50 cents doesn’t give you much gas. In other words, the difference in gas between $64.75 and $65 -assuming a liter costs $1-is only 0.25 of a liter which is virtually nothing.

On the other hand, this spare change left-over can mean a lot in the long term for your savings.

If you have one fill-up (or even top-up) per week or so, you are looking at 50-60 per year.   If you spare a few cents for every one of these stops at the gas station, you are looking at well over $50-75 per year. And if you drive for a living, this could translate in close to $100 or more in spare change.  Not bad at all for little or no effort and no effect on your gas mileage.

Done alone, it may not mean much, but as we often preach, it all adds up, especially when done in conjunction with other money saving strategies. Remember, it is important to diversify your sources of savings and this is just one of many.

Do you find yourself spending your paycheck within a few days and then nothing is left to pay off your bills, let alone for savings?

There is a simple solution: having two bank accounts.

One will be your central and main account, where your paycheck is deposited. You will use this to pay off bills. You will set this up to automatically transfer money to the other bank which is dedicated for discretionary spending. The amount you transfer will be determined by your budget of course.

The second one, will be just that, secondary, for discretionary spending. This is the money you can spend, without worrying about spending all of your money. As long as you separate your money-depending on what each one will be spent on-you won’t have to worry about spending most of your money on one thing and having little or nothing left for others (bills, saving etc.)

Alternatively, you can follow ‘envelope budgeting‘ and not worry about having to create two bank accounts.  With envelope budgeting, you withdraw the money as soon as you get paid and then allocate them-using a real envelope or something similar-to different categories.

Not to be ignored, this is all assuming you already have a ‘savings account’ to which you transfer money automatically.  If you don’t, you need to create one right away!

Feeling all depressed and envious reading and hearing all the endless talk about Facebook’s 100 billion IPO? Don’t be, or at least try not to.

As much as I believe the hype and valuations are highly unjustified, I still say good for Facebook and its founder Mark Zuckerberg. To be able to create a company from a dorm room and take it to what it is today-over 800 million members and close to 4 billions in revenues last year-is nothing short of spectacular.

But amidst all this hoopla, I am sensing that this Facebook IPO entry is causing some depression and negative feelings for many out there. I am observing this from all the hundreds of commentary I am reading online, not to mention all the editorials and articles from professional bloggers on some well-respected news sites. Some are downright jealous, while others’ feelings are simply centered on envy and wanting a piece of the pie. Some are very logical in their approach to the whole thing, arguing what I did earlier, that the whole thing is not justified.

And I probably can’t blame them at times.

One story I read of people becoming instant millionaires and billionaires from Facebook’s IPO was that of an artist whom the company had hired in 2005 to do some murals for the company’s building at the time. He was given the option at the time to be paid either money or stock options. Luckily, he chose the latter and that means his wait and patience will make him an instant $200+ Millionaire!

Instead of feeling envious and depressed about the insane amount of money going to certain individuals, while we struggle to make ends meet, let us pause for a second and think about the following:

These people did put some effort and time to get the money they are getting. Of course, luck has something to do with it too. But the point is, this is capitalism at its best-or worst-and these people are reaping the benefits. In other words, they are much better than lottery winners in that they did work and sweat for this money and it didn’t come with no effort. Whether the valuation is justified-I don’t think it is-is another question.

So we can’t just feel bad for not having a piece of the pie. Why should we, it is not like we worked at Facebook and deserve some of this crazy money.

The other reason why feeling negative about the whole thing doesn’t help, is that it can only make you more miserable. Think about it: if you constantly drool and envy these new young billionaires, it will make almost anything you have and own seem worthless. Because it is simply nothing compared to what they have. If you have $10,000 in the bank, a Honda civic and a one bed room condo, these billionaires will have $1billion in the bank, with couple of Farris and Porches and probably one or two mansions.  Relativism at its best.  What you have is probably not bad for your situation, but once you start comparing, it becomes nothing. Remember, envy is one of the 7 deadly sins!

Find a job you like or better yet, study to work in something you like and can make you good money. And when you are in the right position, with the right attitude at the right time, you will also be in a position that others will come to envy.  In other words, you can sometimes create your own good luck.

The likes of Google and Facebook are rare. They come once every decade or so, and between them, you have literally hundreds of thousands of average or even failed companies.

Be happy with what you have and if you are not, work smart and hard to make it better. Looking at what others have and being envious, without doing anything yourself, is self-destructive.

And last but not least, remember one thing: it was me, you and the millions of other Facebook users who helped make the company into what it is today. In other words, even though these millions of users didn’t work for Facebook directly, their spending so much of their time on the site is what took Facebook to the top. So despite my earlier claim that we can’t just wish to have a piece of the pie, as we aren’t employed by Facebook, the reality is that Facebook’s users contributed much more to its value today than did its employees.  Sorry for making it worse for you…

The least you can do is to stop wasting your time on the site and do something productive instead. Really, you are just wasting your time. Spend it on something more productive that can actually give you some monetary returns.

Or, you can buy Facebook stocks yourself and hope that they will go up and make some money.