If you find yourself at the grocery store and you find yourself buying coffee and you find yourself buying coffee out of those bins (which I should take pictures of so that you know EXACTLY what I mean) with the little pull levers that release the whole beans into the paper bags: STOP!  That isn’t to say that you shouldn’t buy that coffee as much as it is to say this: beware the funky flavored crud.

I had company in town and I didn’t purchase them the high end [high quality but not high priced] stuff I usually buy because they don’t like it (I offer and they generally refuse it).  But I did buy them what was supposed to be 10% Kona beans because I’m nice like that.  Except that the lemurs that put the coffee in the bins put the kona (read: hawaiian beans are in here) next to the hazelnut flavored coffee.  Note the word flavored.  That word should be a big warning sign.  They should label it, “Death star coffee flavored like hazelnuts so that the death will be sweet.”  But they don’t.

If you buy coffee that is supposed to be just plain coffee flavored out of the chute next to the flavored death star stuff then spill a little of the beans into the bag and then smell the beans.  Your nose should be able to tell if miracles have happened and your kona coffee smells like coffee or if the evil siths of hazelnut have taken over and your imported beans are really just polluted with bad ju-ju.

Save your money on the coffee that’s been polluted, report to a store manager that the devil responsible for putting the coffee in that chute should be chastised heavily, and then buy something else that may not be what you wanted, but will not be polluted.  Unless of course you’re into flavored coffee, in which case by all means just dump the arabica beans into the bag and proceed with your business.  I’m embarrassed to have written this post because I prefer home roasted coffee if possible.  But I’m a coffee snob and I have to deal with that burden every day.

I just paid a library fine bigger than I thought they could get.  Due to some stellar miscommunication with my bride a huge library fee was due.  I could have used her card that didn’t have a fee on it, but I pledged to be responsible for all fines on my card when I signed up at the library and so I bit the bullet, took a deep gulp and paid the fine.

The woman at the counter asked me if I knew how much the fee was and I said, “Yes.”  She was rather surprised.  I knew we’d screwed up, I knew what we owed, and I paid it.  It was the right thing to do, even if it was painful to do.  Stupid tax that, had I done this three times, could have bought me a bass guitar this last weekend in fines.  Lesson Learned most definitely

Dear Power Company,Sorry for the huge increase in power consumption last night.  Neither myself or my wife happened to shut the windows in the front room when we went to bed and as the temperature dropped to around thirty-four degrees the heater ran all night.  Fortunately we caught it this morning and all of the temperatures appear to be balancing out as well as a reduction in heater use.Doh!Randy Petermanhttp://www.watchmymoneymaker.com

We don’t generally have to deal with collections.  To my knowledge I have been ahead or on time with all of my payments for a year and a half.  Unfortunately this last Saturday we got a call form a store credit card collection agency that I was completely unaware of.  My wife was also unaware of the problem as we ran into some issues with email notification and spam filters combining to a net gain of nothing and a net loss of a stupid interest rate and late fee.  We’ve paid the card and now we’ll cancel it.  I don’t like store cards and I don’t know why this one was signed up for, I think my wife was offered tremendous savings of some sort.  We’ve lost the savings, but gained a lesson.

When dealing with a collection person remember several things about their job:

1. Their job is to get money from you
2. They are rewarded for getting money from you
3. They are trained to ignore your personal situation and to demand money
4. They hear all sorts of everything every day and are numb to what you have to say
5. Rational discussions don’t mean anything because their job is not to be rational, it is to get money from you

So in dealing with these people, and they are people, though they may seem like monsters or jerks or rude people, just realize that their job is not to wave fees, reduce penalties, take your side, or help you get things straightened out.  In fact, in most cases you shouldn’t even talk to them.  The best way to deal with them is to not deal with them.  Instead, if you get a call from a collections agency, find out who it is they’re collecting for and then call the company they’re collecting for and bypass their job’s inherent socially aggressive issues.

Remember that they’re trying to figure out your payer type.  That is they’re looking for the type of person you are to find the argument that will talk you into paying them right now, which means they get rewarded. As soon as they get rude tell them they can stop being rude and work with you or you’ll hang up.  They may respond in various ways, but in the end don’t let their attitude cause you to get worked up.  This is what happens to me when I’m discussing things with people and they begin to ignore intellect and rationality.  They know that if you’re emotionally charged that this will get you to act one way or another.  Don’t let them get you worked up.  Hang up first.

Remember that if you’re legitimately in debt to someone you should attempt to pay it as soon as possible, but don’t let their problem be your problem.  Tell them that you’re glad to know the total you owe and you’ll figure out how you can go ahead and pay it on your time and schedule.  Say, “Thank you, good-bye,” and then hang up.  Don’t give them a foot in the door.  Hang up and then genuinely figure out how you can pay your debt and put it behind you.

Have you ever wished you had an extra $200.00 a month? I know I used to wish that. The moved buffer theory is the theory that you should be putting the buffer in your budget at the ‘top’ of the budget rather than in each category. A buffer is an excess amount of money that is put in place to deal with a greater demand on your finances than is normal. If you’re familiar with “emergency funds” then you might describe the buffer as a preventative emergency fund built into your plan. If you are like me then you originally set up your budget with the buffers into different categories so that each category could absorb fluctuations in the category.

Evaluate the chart above representing a traditionally buffered set of categories. Can you see that the categories with buffers are theoretically more likely to use the buffer? By giving yourself access to more money you are more likely to absorb the buffer. The problem is that you should have some buffer somewhere because in real life all of the numbers are not known ahead of time (unless you are super lucky). By setting yourself up with a ’safe’ budget you are more likely to overspend potential savings (which is not the same as blowing out every budget category in overspending).

Instead, I would propose that you actually calculate a conservative amount for each budget category. What would you say to cutting each category by 20% and moving that buffer into its own category that goes untouched and your target for expenditure is reduced? That way if you over-spend in a category (or the water bill shows up and you find out you took showers that were too long, or watered the garden a wee more liberally than you had expected) you have a buffer category with funds for paying the water bill, but you don’t find yourself likely to spend a lot more in each category. The weakest link in your budget, the category that you’re overspending on, is dealt with, and you can review it for next month to see if it needs more funds, but you don’t just feed all of the categories excess money each month.

There is little doubt that real life will happen, and the potential for surprises is great, but by taking out some of the waste where it didn’t appear to be in the first place, you may save yourself a lot more money in the long run. If you can save $50.00 a month in reduced buffer excess and put it into an investment fund, pay off debt, or possibly grow other areas of your life, its worth considering! I have begun to see a several hundred dollar a month buffer that I didn’t know existed because before I was spending it. Consider your choices as you budget. This method may not work for everyone, but for us, it has been a real relief.

Note: The Moved Buffer Theory Budget is based on the Theory of Constraints by Eliyahu M. Goldratt - only applied where I haven’t seen it applied yet. You might consider checking out Critical Chain, a book that applies the Theory of Constraints to business management.

If you want to be successful in life then there is one principle you must learn first: Learn principles. What makes a chef great? They know the principles of cooking and flavors and how they balance and then they can take unlikely ingredients and mesh them together into a signature dish. What makes an engineer great? They learn principles and then take those principles and apply them systematically to their work. What makes money managers great? They learn principles, apply them and keep their finances in order and grow their net worth.

Elementary school and primary school, and unfortunately some college classes tend to be about rote memorization. The best teachers I ever had were the ones who took the principles behind the things I was memorizing and taught me those instead of merely cramming data into my head. As a web developer/programmer I have memorized a lot of coding things, but I didn’t begin to think as a programmer until I learned the principles behind smart programming (sometimes called ‘patterns’). My finances were a mess even though I had heard good personal finance bits and pieces, but it wasn’t until I learned the principles behind sound personal finance (influenced by blogs like the Simple Dollar, NCN, and Dave Ramsey’s “The Total Money Makeover“).

Smart, successful people will be able to think with abstraction. They’ll be able to identify the principles that make up great process and then merge those principles, where they apply, to their different areas of expertise. Recently I read a book called, “Critical Chain” and it had lots of good principles in it. It is how I run my budget (which I posted a bit about before, but I’m going to write a further detailed article later), but it wasn’t how I ran my budget before reading it because I hadn’t clearly seen the principle. Once I learned it, I was able to see how it could apply to other areas in my life.

Learn principles, learn how they can be applied across broad scopes of your life, and then forget about rote memorization. It could save you thousands of dollars, millions of dollars, your life, or a few minutes time here and there, but get past the short term rules and start thinking bigger.

I had a great post idea earlier today. Great to the point that I thought it would be my best article to date. Or not. It doesn’t matter because I wasn’t at a place where I could write it, and I failed to write it down! So now you can imagine that this post is brilliant. But its brilliance lies mostly in that as a manager of life (and finances), you need to be prepared to document ideas and be able to come back to them so that you don’t lose important things, or blog posts.

Every time I go to an evening doctors appointment I end up springing for dinner for my family. Usually around $30.00 or so (we’ll pick a place like Jason’s Deli which is potentially more nutritious than a fast food restaurant, but not much more expensive). The evening appointments cost the same as the day appointments at the doctor’s office, but I can avoid missing a lot of work time during the day. The nicety of going in the evening is offset by the eating out, but when you’re sitting there at the restaurant having spent more money than you’d like for the evening you have to account for your choices.

I think I may try taking an afternoon appointment in the future and make up missed work time in the evening because it’ll still cost me less than appointments and dinner. Its time to do investigative surgery and at least try the other approach and see if it saves the money it should save. Hopefully a lesson learned and we’ll just move forward from here.

If you have not see the Strongbad “Trogdor” video, here it is.  I know its weird, but since Homestar Runner and Strongbad tend to be internet icons, I’ll let you decide if the internet is weird before the video, or after the video.  You see: my wife’s relative had her house burn down on Monday last week.  Burninated.  Most everything is gone or destroyed.  It is pretty tough since that sort of event is so life altering.  She’s still waiting on more information about insurance and hasn’t begun (to my knowledge) the process of discovering the costs of rebuilding.

As you can imagine, this post is a reminder to back up documents off-site, or to keep them in a safe-deposit box at a bank/secure location.  I need to do this, too.  Some of the documents that she had are gone forever, some can be had for a fee (reproduction and shipping and handling costs), and some are going to be sorely missed.  Things like children’s first moments, photos, some computer data, and of course various valuables that are destroyed when flames hit them.

Consider her fire as a great lesson for us to learn from.  Consider her blessing in not being home for the fire (and therefore unscathed).  Make sure you have life-important things like wills covered in duplicate.  Make sure you have considered a location to store offsite data (external hard drives or sites that offer low-cost data hosting for such cases are a good idea).  Make sure that you tell your loved ones they’re loved - you never know what might strike, but you do know it won’t be Trogdor.

Note: This post is a tiny bit light hearted because the relative is actually doing pretty well emotionally.  I’m actually feeling kind of sick, but such is life.  Gotta travel tomorrow, so we’ll see how that goes. 

What if you lose everything that makes you financially wealthy? I am going to explore some of this in a video podcast soon, but I wanted to share a story I heard recently that just hit this point home. I know a person who had a tremendous job that promised above average income and a whole list of benefits - but that job came at a cost: it began to affect his relationships.

A time came when the financial pursuits and the relational pursuits had come to a very strong and intense decision making point. The person had to ask himself: what matters most? The way he put it was very powerful: if you lose something and it hurts, you’ve given it priority. The question that he had to ask himself was whether or not his priorities were right.

His story ended well because he was able to continue to earn a solid income, and maintain his relationships as well as strengthen them. This isn’t always the case, but you need to be prepared to let go of what doesn’t matter - and as much as this blog is about personal finance money should not be your number one priority.