Handling Finances

I’m a big fan of expensive luxuries. I own an expensive digital camera (with expensive lenses), two computers, a keyboard, and a rather long list of other things I don’t really need. I use most of them extensively and I feel they’re worth the thousands of dollars I put into my hobbies.

Unfortunately, small habits can eat away at earnings and pull money away from the large purchases I strongly value. For example, spending just $5 a day at work for lunch is 3% of your salary at $20 an hour or 2% at $30 an hour. And that’s before taxes! Drinking coffee instead of water can eat up hundreds of dollars a year even if you brew your own — I promise you’ll wake up again once your body gets used to non-caffeinated life again. Drinking alcohol is even more expensive, and I won’t even get into more addictive habits like smoking!

Kick the habit?

If money were the only goal, we’d all be riding bicycles to work and eating Ramen for each meal. In truth, money isn’t important except as far as it enables you to accomplish the things you really value. Because of that, I’m not interested in condemning expensive habits, but it is important to be aware of them. When you are conscious of what your spending on morning coffee, you can choose whether or not the cost is worth the benefits. The one thing I would advise is to ignore withdrawal symptoms (unless you’re on hard drugs — then get professional help!) If you enjoy your morning coffee, by all means continue to pay for the caffeine jolt, but I can guarantee that years of spending money on coffee will heavily outweigh the month-long battle to stay awake as you wean yourself from the drug.

Once you’ve recognized the habits, you can also choose to simply cut costs rather than cutting the habits. If you think spending thousands of dollars a year on high-end, prepared coffee is too much, you can always learn to make it for a fraction of the cost at home. If it’s the caramel lattes you really enjoy, you can do that at home too, for the price of a little more time each morning.

Take control.

I don’t care if you do value your morning mocha enough to spend $10 a day on coffee — the key is that you need to be aware of the cost and make an active choice to spend on coffee. After all, I don’t know how much you make, how much you spend (or save) in other areas or what you value in your life. All I know is that if you allow habits to continue without carefully considering what they cost, you’ll lose money like water through a fire hose. Even worse, if you don’t know where your money is going, when it dribbles out through your habits, you won’t feel like you got your money’s worth when it’s gone at the end of each month — even if you’re spending on stuff you value highly!

I’m not interested in discontinuing my blog, but I’ve come to realize that I’m starting to stretch to meet self-imposed deadlines.  Regular posting was quite valuable as a tool to get me started, and I’m reaching the point where I must either start relating tiny personal details or simply recycle other bloggers’ content to stay as active.

I will continue to post 1-3 times a week which will let me focus on topics that I think haven’t been covered everywhere else and to put more research into each post without skimping on the rest of my life.

In other news, I’m not alone in thinking that buying in bulk isn’t always the best or even the most frugal option as I wrote about here.  It’s good to know I’m not alone in my difficulty with sugary (or any snack really) cravings.

I’ve seen a lot of blog posts offering $25 to sign up for Revolution Money Exchange. Revolution Money Exchange is attempting to compete with Paypal — the leading money transfer site which has been plagued by complaints of poor customer service and issues with frozen accounts. Revolution Money Exchange could significantly improve the quality of online money transfers, but in order to be successful they need volume. To combat the classic “chicken or the egg” problem where they need users to attract merchants and they need merchants to be useful for users, they’re offering $25 through April 15th.

Sorry, but I’m not biting.

There are a lot of referral programs out there — I especially like ING bank so I’d happily give referrals for their $25 sign-up bonus. I’d get a kickback of $10 and my friend would get involved with a service I know is worthwhile. I haven’t heard a single negative thing about Revolution Money Exchange, but I’ve noticed that there’s little mention on financial blogs of the downside of giving out information for small “rewards.”

You have to give out some pretty private information — not just your bank account, but your address, phone number and social security number! I’m not overly worried about identity theft, but I am very wary of giving my private information out to any company before I know I will be using their services! $25 is just not remotely worth the added risk of throwing your personal, financial information to a startup company you may never use.

The referral program is not evil.

Again, I have heard nothing bad about revolution money exchange. I do have an account at Paypal that I use very sparingly for ebay purchases, so I might sign up in the future if it becomes popular on ebay, but at once every six months or so, the remote risk of problems with Paypal doesn’t entice me. If you make a lot of purchases or sales on ebay — definitely consider this new service (and sign up now to get the $25)! I’m not offering referrals, but if you want to send kickbacks to other bloggers, by all means visit the sites linked above (you can also get the $25 without sending kickbacks if you’re feeling particularly cheap).

Similarly, if you would honestly use Revolution Money Exchange to settle the bill for pizza or to pay your babysitter (as advertised on the site) then by all means, sign up and get a few bucks back! Honestly, I love the idea, but I don’t know a single other person who I’d exchange money with so again, I’d just be selling my social security number for $25.

Bottom line — referrals are great, and I’m a big fan of bonuses for services I use. I have a cash-back credit card and first was attracted to ING by the referral bonus (as well as the great reviews). That said, $25 just isn’t worth the risk of throwing your personal information into yet another company’s servers. Wait until you know you’ll use the service — yeah, you might miss the limited-time bonus, but you definitely won’t risk your financial information unnecessarily!