I ran my weekly portfolio update this week and found I was down 6% since the end of the year. I am actually pretty satisfied with this. Why? Well, mostly because the S&P 500 and Dow are both down about 9.5%, and the Nasdaq composite index is down 13%.

My decent performance, at least in comparison to the major indexes, is due to three general changes I made to my portfolio: Completely avoiding growth stocks for the time being, trying to stay around 50% in cash , and investing in resources and energy.

When the market timing indicators here started turning negative in December, the standard call to trim your portfolio went out. In my case, that meant getting rid of my weak stocks, which now were the same growth stocks that had been leading the pack in the summer. It was particularly hard to say goodbye to Baidu after those fantastic gains it gave me, but I’m sure we’ll run into each other again soon.

This left me with, well, no stocks in my portfolio, which shows just how heavily invested in the growth stock leaders I was. They had treated me wonderfully during the past year, but were not at all what I wanted to be invested in as the new year approached. I now somehow had to find the next leaders to spend half my cash on, in a pretty terrible market.

So I instead turned towards the boring, uninteresting stocks of the resource, energy, and gold sectors. Honestly, how exciting is mining coal? Still, I had to give them credit for their surprising performance in such a negative market climate. So I purchased four of them: Cleveland-Cliffs (CLF), Arena Resources (ARD), Yamana Gold (AUY), and Cosan (CZZ). The first two are involved in general resource operations, the third is obviously a gold stock, and the last is a major player in the ethanol field.

To date, they have all performed positively. ARD, AUY, and CZZ have returned 5%, 9%, and 7% gains respectively. Normally I wouldn’t be happy at all with numbers like that over two months, but with indexes down 10% I can’t complain much. Cleveland-Cliffs has been the big winner, returning 30% gains since I bought it.

For the time being I’m happy. But believe me that I have my finger on the trigger, ready to jump on stocks like Google and Baidu that are now extremely cheap. I will be waiting for some reliable performance from the market in general before doing that though. I believe we are near at turning point in the market. We’ve had a steady number of 30-50 lows for the past few days, and it seems like the market is just waiting to dart one way or the other.

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A few months back, I opened an account at HSBC Direct and moved nearly all my money over to this online bank. This was after quite a lot of deliberation on trying to balance the advantages I would receive from online banking compared to what I would be losing from local banking.

So what have I learned in six months of online banking?

1. It is extremely difficult to survive without paper checks. Nearly all major online banks do not offer paper checks. They instead tout their online, free bill pay systems, which for the most part work very well. I have a few checks that go out each month automatically for utilities, loans, and rent. Yet I still find myself writing a paper check about once a month. For instance, this month I had to pay the DMV for registration on my new car, and I couldn’t possibly have mailed them a check through bill-pay instead. This Sunday I need a check for my new apartment deposit.

   I keep $300 in my local checking account for these situations, but often times the check is more than $300, which means I need to transfer funds from my online bank. The problem is that it takes a full four business days to complete this transaction. So if I ever need to write a check for more than $300 without four days notice, I am in a bit of trouble! The only solution I see is to keep more money in my local checking account, but that reduces the benefit I get from interest. Speaking of which …

2. Making interest on all banking accounts really adds up! A major reason many people use online banking is for their high interest rates, on both savings as well as checking accounts. While I had been using the online bank Emigrant Direct for my savings account, I had never seen it worth the hassle to setup an interest bearing checking account at a local bank that would earn me 0.25%. Now that all my accounts earn interest automatically though, I find all those dollars really adding up. Also, being able to transfer money from checking to savings instantly earns me more interest in the end, instead of my previous method of having to wait a week for the funds to move over.
3. Not having any ATM fees, ever, is just as good as it sounds. A few days after setting up my account, I went to my favorite local sub place – and forgot that they only accepted cash. The cashier pointed to the ATM machine in the corner, and I told him thanks but I’d rather avoid the $3 machine fee and $2 fee from my bank for not using an in-network machine. And then it dawned on me that my new online bank didn’t charge any fees and reimbursed any machine fees! I have to say that this has been my favorite aspect of online banking. Whether it’s visiting my family in Ohio, withdrawing some money at a casino, or just needing some quick cash for a turkey sub, not having to worry about ATM charges is fantastic. The ATM fees still initially go through, but are reimbursed in one to two weeks.
4. Depositing is a slight inconvenience. I know, depositing by mailing my check should be just as easy, in theory, as depositing at the ATM. But it isn’t. Normally, I would deposit any checks I had at the time I was making a withdrawal, which was easy enough. Now, I have to find an envelope, write out the address, find a stamp, and make a trip to a mailbox (which for some reason is a mile away from where I live). Besides that, I am more hesitant to put checks in the mail. I like depositing into an ATM because I can see the result immediately online. Not to mention mailing cash for a deposit is impossible. So instead I’ve met halfway by depositing in my local account and then transferring to my online account. Still this isn’t ideal as it now takes seven business days to get that money.
5. Consolidating accounts into one bank makes organizing my finances much easier. Before, when my checking account was at a local bank, my only option to earn decent interest on my savings was to have it in an online bank. Besides the delay in transferring money between the accounts (as mentioned above), it also meant multiple logins to see my account status, multiple statements, etc. Now my account, my wife’s account, our savings and our business accounts are all at the same place. As long as we don’t surpass the $100,000 FDIC limit, I see this being a good thing.

Overall, I am very happy with my decision to move online. The slight inconveniences are far outweighed by the advantages. I didn’t go into too many details on my specific bank, HSBC Direct, but suffice it to say I am very happy with them. They were one of the online banks that offered complete ATM fee reimbursements (something the popular ING Direct does not), no other fees to speak of, competitive interest rates, and a great online interface.

They do not, however, offer referral bonuses, which may be why you don’t see it mentioned as often as ING Direct on other personal finance sites.

I kid, I kid!

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At the beginning of last year, I began my job at an investment advisory service. Though I had never been very interested in investments before, dealing with them in my everyday life spurned my interest forward. I went out and bought books recommended by personal finance blogs, such as A Random Walk Down Wall Street and The Little Book of Common Sense Investing.

I was promptly poked fun of by my coworkers.

Not because I was a neophyte in the investing world, but because I was reading books by preachers of index funds. What was so bad about index funds, I wondered? It sounded as though market timing was a myth best practiced by practitioners of voodoo, individual stocks were for the insane or insanely rich, and choosing a successful mutual fund was a fool’s errand.

What I learned was that in the end, index funds are a viable choice, but by buying one, putting a blindfold on, and selling it when you retire, you are submitting yourself to be a toy of the stock market and its investors. So instead, I followed the advice of my colleagues and invested in growth stocks, using market timing to balance the cash I had in my portfolio against the performance and strength of the overall market.

At the end of the year, my portfolio was up 39.32%, which I was extremely happy with. Now I must admit that I credit a fair portion of this with beginner’s luck. Not to mention I was being guided by people with ten, twenty, thirty, and forty years of investing experience – both in terms of stock recommendations as well as market timing recommendations.

So what were my big winners and losses of 2007?

Winners

• Apple (AAPL): Up 132%. This was the very first stock I bought at the beginning of the year. I kept it for the entire year, recently selling it before Macworld as it seemed as though the enthusiasm for the stock was dwindling.
• China Fire & Security Group (CFSG): Up 32%. A tiny company that racked up tons of contracts for installing fire and security systems in Chinese infrastructure. This one was up nearly 80%, but dropped at the end of the year.
• Garmin (GRMN): Up 115%. I was extremely enthusiastic about this stock, as I saw GPS’s becoming the next iPod, and thought Garmin had the best chance of capturing that. And they did – up until them losing their source of maps, Navteq (which they later regained). This permanently damaged the stock however, and it is now worth half of what it was in October. Luckily, I sold it right after this announcement, taking a short term loss but saving most of my gains.
• Dawson Geophysical (DWSN): Up 47%. Dawson found oil for companies by blowing up dynamite underground and studying how seismic waves reflected around. Cool stuff. Sold in October after it had cooled down for a month.
• Aecom Technology (ACM): Up 48%. Probably the “easiest” gain I had, in that it went up straight for nearly two months. This was a global infrastructure play, that especially benefitted from growth in China. Like Dawson, it also flattened out in October.
• Audible (ADBL): Up 23%. An online source for audiobooks. I mostly mention this because I sold it shortly before it was bought out by Apple! Ah well.
• Baidu (BIDU): Up 112%. The Google of China. I always regretted missing out on Google, so I figured this would be a good alternative – and it was, up until recently. Luckily I sold this before most of its recent decline. I still feel as though it will be a strong stock once the market regains some of its footing in the tech sector.

… and losers

• Comscore (SCOR): I work a lot in online advertising, and saw how much we were spending, so I tried investing in a company that profited from that. Unfortunately, this particular company did not, and is still a very volatile stock.
• Loop.net (LOOP): No matter how good the fundamentals look, this stock was a great lesson in why you can’t ignore common sense such as not investing in any stock relating to the housing market.
• Jones Soda (JSDA): I knew this one was quite the gamble, and thought I had found the bottom at 10. This was after a drop from nearly 35. It went up to 14 before falling all the way down to 6.5, where it is now. Luckily I sold it with only a small loss.
• Crocs (CROX): I actually ended up with a gain in this stock, but that gain was quartered after a horrible earnings report.
• Volcom (VLCM): Another clothing stock that I tried to capitalize on. My younger sister, who knows quite a lot about clothing, had never heard of them – maybe I should have taken that to heart!

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When I first read that my country was giving me back $1200, my initial reaction was outrage. Every day I read about the trillions of dollars of debt we’re in, how the nation is going into a recession, how the dollar is losing value as we owe more and more to other nations, and yet the government is giving away its money?

Now I understand that the idea is people will go out and consume things with this money, which in turn helps stimulate the economy. Yet what most people seem to think will happen is the rich people will save the money, not helping the economy one bit, while the poor will spend it on something they can’t afford in the first place.

While I consider myself far, far away from “rich”, I count myself as one of the people that will be putting this money right into savings (or maybe towards my college loan). As do most other personal finance bloggers it seems.

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My wife and I are excited. We will soon be buying our first piece of “real” furniture – a leather sofa and loveseat. First, I should probably define the term “real”. Our first apartment, a cheap place in the farmlands of Sunderland, Massachusetts, consisted of all hand-me-down furniture or collectibles we found near the trash compactor. We were in college, and not concerned with the differences between, say, particle board and solid oak.

After we got married, we moved to another apartment, lugging our boxes of wedding gifts with us. Of course, the gifts consisted of mostly smaller items (dishware, appliances, photo frames) and not furniture. I have to admit it was mildly amusing displaying a beautiful Waterhouse crystal we received on top of a $9 coffee table from Ikea.

Ah, Ikea. Our love-hate relationship continues to this date. I hate it for its horrible quality chairs, uncomfortable loveseats (of which we are the reluctant owners of), and the ten hours I spent assembling a desk, table, entertainment center, and chair. I love it for its extremely reasonable prices, entertaining showroom, and absolutely delicious cafeteria food.

Considering the fact that we lived literally two minutes away from an Ikea, our apartment not surprisingly consisted of mostly Ikea furniture. And for the most part, it has worked out nicely – besides the aforementioned chair and loveseat.

Now my wife and I are packing up again, and moving to our fourth apartment in six years. We paid a bit more than we liked, but are ending up with a gorgeous place built literally two months ago. After coming home from signing our lease, we took a long look at our sad, depressed, pillowless couch and decided it was time for a new one.

So we made our way over to Jordan’s Furniture, a massive furniture store nearby. I had downed a few cups of coffee, stowed away an emergency Red Bull, and prepared for a long day of searching for a couch.

Yet as we stepped off the elevator into the sofa showroom, I saw it: A beautifully designed leather couch right smack in the middle of our price range. Hoping for the best, I slowly sank down onto the couch only to find … utter bliss. It was the perfect balance of firmness versus comfort, with a luscious leather covering that also proclaimed strong resistance to spills and stains. I hesitantly turned over the price tag to read the manufacturer details, and was pleasantly surprised to see that it met all of the standards of a good quality sofa.

Now that we have found the perfect couch for us, we have to try to swallow spending what still seems like a mind-boggling amount of money for some pieces of wood and cushions. I do try to keep reminding myself of a few things though. First, this is furniture – not exactly a luxury. Yes, it’s leather, but I did some research and leather couches cost about 10-30% more than fabric couches, and last three years longer (more considering how fond of scratching our cats our). Second, this would be the first purchase of “real” furniture we have made, from a furniture store besides Ikea. And third, of all the furniture in the house, couches are probably one of the most important pieces.

So now we arrive to the final financial question of this piece, which is whether to take the no interest, no payments for one year offer. My gut instinct is to not even consider the possibility. These are the type of plans I see offered in bright neon lights on late night television to people who spend money on things they can’t afford. I could buy the sofa and loveseat right now, paid in full, without a problem.

But is that the best decision financially? If I were to keep this money in a 4.25% interest bank account instead, I could make a decent chunk of change through interest over the year. The only negative is if I somehow forgot to pay the balance in full before the year was up. Considering I have never had a late payment on, well, anything, I would consider that fairly unlikely.

Either way, I know I cannot wait to relax in something besides a twelve year old, faded mustard couch missing back pillows and sporting hanging metal staples.

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As the holiday season approaches, I am sure many of you with friends or family living far distances away are already dreading the inevitable tasks of getting that massive stack of gifts shipped from your house to theirs. Sure, your grandmother would absolutely love that antique rocking chair, but there’s just something wrong about paying more to get a gift to someone than on the gift itself.

So how do you avoid spending the majority of your gift money on shipping? All you need is a little comparison shopping and a bit of online form wrangling, and you’ll save a bundle sending that bundle. Here are some tips in chronological order:

When Shopping:

• If you are looking at buying a gift but worried about the shipping cost, consider buying it online from a retailer such as Amazon.com. That way, you can have the gift directly shipped to the person (including gift wrapping, for a slight surcharge of course) at much lower a cost than if you had shipped the gift yourself.
• If you have to buy the gift locally, remember that shipping costs aren’t based on weight alone. All carriers charge extra for very large packages, or oddly shaped packages which are referred to a “non-machinable”. Be sure to check the carrier’s website to see if the gift you are looking at might be the victim of non-machinable surcharges.

Preparing the Shipment:

For boxes, often the box the item itself comes in suits the purpose perfectly. Just cover the box completely with some postal wrap, paper grocery bags, or something similar. If you need a new box, here are some options:

• If you plan on shipping via USPS priority or express mail, you can use their boxes for free! You can either pick some up at the local post office (though they often have a limited selection), or order them online and have them shipped to you for free. Just be sure to double check which boxes you are using, as the priority and express boxes look very similar but can only be used for that shipping method.
• Don’t forget about using flat rate boxes! The USPS offers two flat rate box sizes, and as long as you can stuff your gift into either of them, you can ship that box anywhere in the U.S. for $8.95 via priority mail. This can save a very large amount of money depending on the weight of the package and where it is being sent to. Note that while it’s unlikely you will be caught and thrown in jail, using these boxes for any other purpose (such as sending them via UPS or FedEx) is a federal crime. Also, the USPS will not accept them for anything besides the priority or express mail.
• Often you can find free or cheap boxes online at sites such as Craigslist, BoxQuest, or Boomerang Boxes. You can also order boxes online from companies such as ULine - just be prepared to pay high shipping costs (a bit ironic, no?)
• If you’re feeling adventurous, you can often find loads of extra boxes outside of retail stores. Might be worth checking next time you’re buying something there, but I wouldn’t exactly recommend staking out their trash.
• If all else fails, boxes at places such as Staples and Wal-Mart are somewhat reasonably priced. Just make sure you avoid boxes at actual shipment stores such as MailBoxes Etc, which would be happy to charge you $5 for a small box.
• In general, you are better off going to your local office supply store for other packaging supplies compared to buying online. Unless you are buying in massive quantities, the savings online just aren’t there – especially when you then have to pay for shipping. In general, bubble wrap is a good choice as it is reasonably priced but easy to package with. Newspaper is always an option, but never underestimate the trials and tribulations a fragile package might endure on the way to its recipient – so don’t skimp on packaging!
• Stumped for ideas for wrapping paper? Whimsy makes high quality, unique wrapping paper. You could also print out your own wrapping paper in Microsoft word, or if you’re feeling green this Christmas, make wrapping paper by recycling magazines.

Shipping Methods

• The very first step is to compare prices online. Make sure you know the weight of your package, the size (though as long as it is machinable, as discussed earlier, the shipping price shouldn’t differ based on size), and of course the destination. As a general rule of thumb, often the USPS will be cheaper for lighter packages traveling shorter distances. Here are direct links to the various shipping calculators:
  • USPS Shipping Calculator
  • UPS Shipping Calculator
  • FedEx Shipping Calculator

  On that note – where’s our flashy, easy to use, shipping rate comparison tool? I was surprised to find there is no Shippr.com.

• When calculating postage, you may notice that the weight of your shipment does not actually effect the cost all that much. Instead, the zip code you are sending to and the speed at which it is delivered has much more of an impact on the price. One handy tip to know is that the USPS only charges extra per pound, not per ounce. So if you’re one half-ounce over four pounds on that box you’re sending, see if there’s any way to lighten the load. You could save yourself 15%-45% on the shipment cost!
• If you’re shipping your holiday presents in November, then you will most likely be looking for the cheapest options: Parcel Post for the USPS, and Ground for FedEx and UPS. It is worth mentioning that USPS Priority Mail is often just a tad more expensive than first class, but can get there twice as fast and allows you to use their free boxes. UPS and FedEx ground generally deliver by four to five days.
• If you need to rush shipment, all three services offer variations of guaranteed two day or overnight delivery. Just don’t be surprised that you’ll have to pay a pretty penny for it.

Sending the Package

USPS:

• The most straightforward way to send is to simply bring the package to the post office, of course. Unfortunately, we all know what that can involve: Long lines of cranky people and equally cranky postal service employees.
• To avoid long lines, pay for shipping using an automated system and print the label yourself. This is easily accomplished online at the USPS site using a credit card. The only tricky part is making sure you pay for enough shipping to cover the weight of your package. Remember that you can often round up with no extra cost and give yourself a bit of leeway.
• Besides paying online, a fair number of post offices also have automated machines now, which besides having much less of a wait also are open for extended hours. It’s as simple as placing the box on the scale and using the touchscreen to fill out some basic information.
• If you have printed and paid for a label, you can bring your package to the post office and just leave it on the desk – no need to wait through the entire line! Even better, you can have the post office pickup the package for free. Just fill out that form, leave the package by your door, and it will go out with mail the next day. Note that pickup is only free with priority or express mail, but as discussed earlier the often negligible price difference between parcel and priority mail is worth it for this alone.

FedEx or UPS:

• Both carriers list drop-off locations online. Remember to see what shipping methods the location supports (some will only ship express packages), and that drop boxes sometimes have limits on what size and weight packages they can accept.
• If you have a Staples, Mailboxes Etc, or Kinkos nearby, chances are they send out FedEx or UPS. However, make absolutely sure you do not pay for shipping at the store. Print out and pay for a label online, so that you can just drop off the package. If you pay in the store, you will pay a 30-50% markup on the actual shipping cost!

Tracking, Insurance and Damage Claims

• The USPS offers at tracking number, but this number only serves as a means to tell if the package has been delivered or not. It does not tell you the estimated delivery date, nor where the package is in the mail syste. On the other hand, FedEx and UPS both provide detailed tracking information on the package.
• All services offer insurance, though generally insurance through USPS is more expensive than the other carriers.
• You will hear hundreds of horror stories with damages or losses about any of the carriers. Generally, due to their detailed tracking, FedEx and UPS often are able to assist with lost packages better than the USPS.

Now, you can go into the holiday gift confident that you won’t be giving all your money to postal carrier. Stumped for a gift idea? Check out HappyCat Lights - personalized art as lamps. Get your favorite photograph, picture or design hand-carved for the perfect unique gift. Starting as low as $45, with 10% off using the coupon “moneymythos”.

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Sometimes, you just have to shake your head at how unbelievably kind fate can be.

At the beginning of this week, my business line received a call from, of all places, Fuddruckers. You know those glass bowls you drop business cards into for a free lunch? Well, for the first time in our life my wife and I dropped a card in. This was a call letting us know we had won a lunch for not two, but fifteen people. It was a very nice surprise to start the week with.

I should be honest here and, at the risk of insulting any Boston readers, mentioned I was still recovering from the Cleveland Indian’s loss to the Red Sox in the ALCS. Yes, I live in Boston. But it’s hard to steal a team’s affection away from a Cleveland hometown boy.

So the call from Fuddruckers helped brighten my mood a bit. Then, on Wednesday night I checked my email right before going to bed. I saw an email with the title “You won!”, and almost threw it into my spam box before noticing it was from Flexo over at Consumerism Commentary, one of the personal finance blogs I read every day. To be honest, at first I couldn’t figure out what this might be referring to. I opened the email to find out I had won the contest he had posted last week for a free Sumo Lounge “Omni” chair – basically, a luxury, incredibly comfortable, massive bean bag chair.

What a surprise this was! The last contest I won, in all seriousness, was when I was eight years old, opened a pack of Bubble Yum gum, and won a shower radio. Not only was I excited about winning, but I also really wanted the prize! From some reviews I’ve read, it’s a great thing to lounge on when playing video games. Even better, my wife is a huge fan of lying on the floor when reading, so at least now she can be more comfortable doing it. Thanks Flexo!

Then yesterday came the biggest news of all. A few days ago, I posted about living on a salary where a bonus accounts for a large portion of your yearly pay. Well this week was our fiscal end of the year bonus. My boss had mentioned several times that this was going to be a nice bonus, thanks due to a new, expensive publication we started and then sold out of a week later.

I can’t really say the amount of the bonus, as I don’t like revealing too many exact figures about my financial life, but I can say this: It was the largest check I have received in my life, and was more than three times the amount I had expected. When I received the check, my hands started shaking and I was having trouble getting oxygen. Funny how the body responds like that, even to good news!

This check hammered home one of the things I love about the company I work for: They appreciate and reward hard work. This past month, I have stayed late a large amount of days, and worked over two weekends, all in preparation for launching our new website. I think they noticed that, and besides simply telling me their appreciation, also expressed it in this bonus.

Now here comes the challenge: Budgeting this very large sum when I had only planned for receiving one-third of it. I threw around some numbers last night and came up with this plan:

• 30% to my dad, for my college loan. This will put me within two years of paying off the remainder of my loan.
• 20% to reach my goal for my emergency savings!
• 20% towards a down payment for the used car I plan on purchasing in December (don’t worry – I have been planning on getting a new car for several months now. It wasn’t the bonus that made me decide to do this).
• 20% to pay off the remaining eight months on my current car’s loan.
• 10% to test my self control.

As for that last 10% … I am honestly not sure what to do with it. I know that it is really only fair for me to spend some of that on something I would really enjoy, either a nice night out with my wife or a new gadget from Best Buy. The problem is, I have been near-salivating over an Apple Powerbook for the past half year. I have decided to get rid of all my current computer equipment and replace it with a single laptop. The thing is, I don’t need a new computer right now. So it’s going to be a very difficult decision to make regarding how much to spend of that remaining 10%, and what to spend it on.

Oh, and one more thing. Last night I got to go see one of my favorite groups, Mates of State, play at the Museum of Fine Arts in Boston. It was a great way to cap off a fantastic week.

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A couple weeks ago, our company gave each employee $300 cash in an envelope. We drove to the mall and were told we had 1.5 hours to spend it all, or we had to give it back. What a very cool concept. Had I been given a $300 bonus, I most likely would have saved it. Instead, I was able to buy a few items I really wanted, but would never have bought with “my own” money.

Quite a few items came to mind when we were first told about this. I thought about splurging it all at Gamestop and buying six or so Xbox games, but I realized that was a bit excessive. I knew I wanted new running shoes, but didn’t want to fret with trying to find the right ones in an hour and a half. I briefly considered an I-Robot Vacuum, something I have always wanted, but unfortunately I just don’t think it would fare well in our apartment.

So here’s what I ended up with:

Shun 7″ Santoku Knife

I have wanted a nice, sharp knife for years now. When my wife and I got married, we received an expensive Cuisinart knife set, as well as an electric knife sharpener. I don’t recall the chef’s knife ever being particularly sharp, and the cheap knife sharpener probably didn’t help, but as of now it can’t cut, well, anything.

So I looked for the best knife I could find. First, I decided to go with a Santoku over a standard Chef’s knife, as they are supposedly more adept at cutting things like onions and peppers, but can’t handle cutting bones. Considering I never even knew you could cut a bone with a knife, I was happy enough with the Santoku.

As for the brand, I originally looked at Wusthof, the famous German knife brand. That was all well and good, but when I read that Shun was a Japanese company and had supposedly perfected the Santoku, I just had to have it.

And let me tell you – cooking with it feels like cheating. It’s an incredible knife, and I’m going to be sure to take care of it like a first born child.

Cost: $123 - $23 sale price - $14 gift card = $86

Keurig B60 K-Cup Coffee Brewer

I love coffee, and I need it. I drink, on average, three cups a day – probably about the norm for your standard office worker. In fact, I often have it around 9 or 10 at night recently, as I can’t seem to stay up past then without caffeine (yet I’m asleep thirty seconds after my head hits the pillow, no matter how recently I drank the coffee).

Anyway, I don’t drink coffee all that often at home. In the morning my commute is only seven minutes long, and at work I have access to a professional version of what I bought here. However, when I do need coffee at home (mostly during the weekends), I couldn’t find a reasonable way to make it. The problem is that buying a pound of coffee left me with old beans, as I didn’t use it quick enough. Making coffee in a coffeemaker left me with several cups extra, as my wife doesn’t drink coffee. I tried a French press, but didn’t love the taste and it was a pain.

I absolutely love this thing though. Thirty seconds to a cup of excellent coffee, especially compared to the terrible Dunkin Donuts I had gotten accustomed too. My wife even loves the machine for the hot chocolate and instant hot water for tea.

A bit excessive? Yes. I also wouldn’t have bought it if I drank coffee every day, as the cups for it can get expensive. But for my moderate usage, it’s perfect.

Cost: $150 – 20% coupon = $120

Dead Rising

Who doesn’t love killing a massive mob of zombies?

Cost: $30

I also picked up a cutting board and pizza stone, bringing the total to $300. The whole experience was a blast – we even got a nice lunch at The Cheesecake Factory after.

As for my real, end of year bonus I get in two weeks? Straight to savings!

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Emergency Fund: First, I have decided to change the amount of money saved in my emergency fund. While I was originally aiming for $10,000, I now feel as though $8000 is a reasonable enough amount on which my wife and I could live for at least several months should both of us be out of work. However, I feel very secure in my job, and when my wife starts working again it seems fairly unlikely we would both be out of work at once. Also, if worse comes to worse we have two wonderfully supportive families who could help out, though I doubt it would come to that.

Unfortunately, the actual amount in my emergency fund has not changed for the past few months. First, we had to pay $270 to fill 1/3rd of our oil tank. No, this should normally not be considered an emergency. However, our finances are still relatively tight with my wife not working, and I had forgotten to budget this expense in. The second reason is because of what I just mentioned: Without a second salary, we can only save money when I get my bonus checks. However, I will be getting a bonus in a week and a half, so I hope to see that green bar on the right get even closer to reaching its goal.

Student Loan: I am happy with the progress I am making on this. First, even though as I mentioned finances have been somewhat tight, I decided to increase my standard monthly payments to my dad from $300 to $400. Second, I feel confident in my ability to send at least another $1000 each bonus, which means my average monthly payment is about $730.

Lastly, I am interviewing next week for a part time job, the proceeds of which will go mostly towards this loan. That, on top of the fact that when my wife starts working again I will be able to increase the loan by yet another few hundred, means I can be looking at paying the rest of this $30,000 debt off in less than two years!

Car: With only eight payments left, I am close to finishing paying for my car, which I originally financed back in 2003. It’s tempting to pay it all off now, but considering I pay a paltry 1.9% interest rate I don’t see any reason to hurry it up.

Alas, it seems as though I won’t be finished with car payments completely. My wife and I have faced the harsh reality of living outside a city and trying to share one car. Unfortunately, unless her job schedule matches magically with mine, it’s nearly impossible. We are therefore looking at buying another car late this year. I’ll have more details on this soon, but we may be able to purchase my parent’s leased three year old, 17000 mile Honda Accord for an incredibly reasonable $15,000.

House and Retirement Savings: Alas, I am still a ways off from being able to contribute anything meaningful to either of these goals, so I have decided to remove them for the time being.

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When I was hired, I was told an interesting fact. Everyone at my company gets the exact same hourly rate. What sets, say, customer service apart from the president is the amount of their bonus check each quarter. Actually, this check isn’t really so much of a bonus as it is a different way of paying salary, as our “actual” salary is far below the norm for most positions here.

The mentality behind this is that the company is able to give bigger and better bonuses when the company performs well. I do have to say that I definitely feel a desire to help the company succeed when I know that I will directly profit from its success. On the other hand, bonuses can be smaller when the company isn’t doing as well – even when that is due to forces beyond our control, i.e. the stock market (my company is involved in investments and so is affected by people’s desire to invest).

Besides the issue of the actual amount of the bonuses, there are also distinct advantages and disadvantages to being paid this way.

The main disadvantage is obvious: It can make it very difficult to budget. When my wife was working, we had enough money each month to easily pay our bills and expenses every month. But since she quit in July, we are getting by just about by the skin of our teeth each month on my base salary.

As a quick aside, I have to mention how much the emergency fund helps in this regard, both psychology and as an actual resource. When I had to pay $800 to fix my car’s air conditioning system in July (yes, apparently even Honda Civics can break), I was able to draw that out of my emergency fund without a problem, instead of having to hope I was getting a bonus soon to pay for it.

There are some other smaller disadvantages as well. I miss out on a few months of interest by only getting paid my bonus once every three months, though honestly that’s not too big of a deal. Depending on the timing, it can make it harder to contribute the max to my Roth IRA, though again I’m still not at the point where an IRA is my biggest savings goal.

So you might wonder where the advantage might lie in all of this. Well, after being at this job for ten months, I have learned to live on the base salary I am paid. So when I get these sizable checks every few months, what do I do? I save them! I am not someone who splurges on a whim, so I am able to put this money to good use.

Currently, I split each bonus check halfway between the loan to my dad and emergency savings. It feels great to send my dad a nice sized check every three months on top of the monthly money I send him. In fact, with the recent increase I decided to make in my monthly payments to him, I’m now paying $800 a month when you take into account the bonuses. That means I will have my college loan paid off to him in just over two years, though with a prospect of a part-time job for me, and my wife actively looking for jobs again, I hope to have it paid off even sooner.

So in a way, I love being paid like this. If I did get paid my full salary every month, I might very well have the discipline to save it – but I’m not quite as confident about that as I am about my ability to save these bonus checks.

Of course, not everyone in this situation might be able to pay their monthly expenses using only their base salary. If this was the situation, here is what I would recommend: First, calculate how much extra money you need per month for your expenses. So say you are about $200 short each month when being paid only your base salary.

Next, set up a new savings account. You could also use an account that you either never (or rarely) withdraw from. Each quarter (assuming you get quarterly bonuses), deposit three times the amount of money you need each month from your bonus check to this savings account.

Now each month you can make a guilt free withdrawal from that account for $200 to help with your monthly expenses. As for the rest of that bonus check? Save it!

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