I Can Has Moneys?

One of the problems with working a day job and then working freelance work is that when I’m done with all that, I’m not terribly enthused about spending any more time in front of a keyboard. So in times of excessive freelance work (like this month) my writing on my blogs suffers. Sorry. So what do I do for extra money, you might ask?

Well, I write. I write for a couple of websites that pay me very well for my scribbling about tournament poker. Poker is a worldwide market, and since I have played poker for several years and written about it on another blog, I managed to hook up with two of the biggest poker sites in the world for freelance work. I write tournament recaps for PokerNews, the largest poker news site in the world, and I write for the PokerStars blog. PokerStars is a site where people play poker for money online.

I know, how am I going to talk about fiscal responsibility when so much of my money comes from gambling and money derived indirectly from gambling? Well, there are a couple of ways I can address this.

First - my writing income is a job, period. There is no gamble there, nor am I taking money from anyone who is gambling. I’m providing a service to an employer, and they are compensating me for it. Just like my primary day job, where I work in a niche construction market.

Secondly - while I do play poker, my poker money does not touch my household money, and vice versa. It’s been a long, long time since I dipped into household money to fund any of my poker play, and more recently my poker money has funded several real-life purchases, like my new (used) MacBook. So while I do play poker and gamble, the money that goes out in those pursuits comes in from those pursuits, and at least my hobbies are self-supporting now, which is more than I can say for when I played golf.

But there have been a ton of tournaments going on around the world, and that’s kept me at the keyboard more and more this month and not as available to write here or on my poker blog. But I’ll work on that, now that some of those freelance gigs are wrapping up and I am limiting the number of people I’m working for in a given month to 2 or 3, rather than the 4 I was working for at the beginning of the month.

I’m happy to say that this little starter blog has been featured in the Carnival of Personal Finance #168! Head on over to One Caveman and check it out!

On another note, I was reminded yesterday of just how much I overspend on food. On the way back from the theatre (Job #3, freelance lighting designer) I stopped by Harris Teeter to pick up some lunch, thinking that I should spend $10 on a bucket of chicken for 2-3 meals instead of $6 on one meal at McDonald’s. Good thinking, even though I actually ended up spending $30 at the grocery store. It’s ok, though. Stouffer’s frozen dinners were on sale 4/$10, so I picked up eight frozen dinners for $20, plus a jar of peanuts, a bag of chips, a soda, five yogurts and a meal from the deli. That $28 pretty much covers my meals for the week, as I typically have a yogurt for breakfast, then frozen meals for lunch and dinner.

It’s not that my wife can’t cook, or that I can’t cook. But we have issues with portion control, and a frozen dinner diet actually helps us lose a little weight. We can cook on weekends when we have the time to do so, and through the week we can eat small and cheap with frozen dinners. A couple of Stouffer’s meals and a yogurt make it really easy to keep to a 1,500 calorie diet (as long as I stay away from the sodas and beer), and I can typically eat for about $7-8 per day, as opposed to $20 or so if I eat out both meals. So if I can eat for most of a week on $30, that’s a huge savings, and the biggest leak in our spending.

So it might be that if you lead a busy life, microwave meals could help you trim the waistline and the food budget!

So everybody knows that you need to keep a little rainy-day money set aside. An emergency fund, if you will. I currently keep $2,000 in my emergency fund, which isn’t really enough were something tragic to happen like the loss of a job, but it’s enough to cover if the fridge goes down while I’m working at getting out of debt. My bank offers savings accounts, of course, but the interest rate on that is ridiculously low. I think my money would appreciate more in mason jars buried in the back yard.

Now I do keep a little money in a savings account at my bank, about $1,000. That’s what I call my “slush fund.” Because some of my income is intermittent, like my writing revenue, I keep a little in Wachovia savings linked to my checking account for the months when my writing income is low. Then, when I get some big payments from my writing work, I replenish my slush fund until the next slow time.

But for my emergency fund, I wanted to make a little more money. I mean, really, I won’t need to access that money immediately, I can handle a couple of days without it, and if it’s a real emergency, then I will break down and use a credit card then pay the card off with my emergency fund.

So I set up an account with HSBC Direct, an online branch of HSBC. I initially set it up there because my mortgage at the time was with HSBC and I had faith in the bank, not to mention the fact that they were offering 5.5% interest! With the drop in interest rates over the past year, that rate has fallen, but I’m still getting 3.5% interest on my savings. I have two online accounts with HSBC, one for savings that earns 3.5%, and one for online bill pay, which earns 1.5%. My car payment auto-drafts out of the bill pay account, and I just transfer money from my regular checking account into there each month. I also have a debit card for the bill pay account, so if I end up in a bind for quick cash, I can move some money from my savings into the bill pay account and withdraw with my debit card.

When we decided to refinance our house and get some cash back for new windows, I left that money in my savings account for several months until we got the work done (windows are coming next week!) to make a little more interest. In the three months that it sat there, I made almost $60 in interest, so that was a pretty good decision. So check out HSBC Direct by clicking the link on the sidebar, and make some money on your money!

So a few years ago I got my wife a cell phone. If by a few, we mean 6. But anyway. Our house happens to sit right in the middle of town, and also happens to sit right in the middle of a dead zone for her provider, AT&T. So her phone, which was the only phone in our house if I’m not home with my cell, was pretty much a paperweght unless she wanted to go out in the front yard to make a call.

I think we refer to that as a sub-optimal solution.

So I called AT&T and they sent over a new phone, with the hopes that the new phone with the new processing would work better. No such luck. So I started working on cancelling the service. Of course, when I got the new phone, I signed up for another 2 year service contract.

With a $175 early termination fee. Ouch.

Now I don’t really mind the early termination fees, that’s how phone companies can afford to give away free cell phones. But that’s a hefty chunk of change to get out of a contract with a phone that’s essentially useless. So I held onto the phone for a while.

But when I started doing the math on the truck repairs (btw, now that those repairs are over $2,000, I’m going to have to sell the truck for a lot more to get my money back. bummer) I turned my mad math skillz to my phone contract, and started shopping for service plans.

SunCom, which is who I have service with, and was recently purchased by T-Mobile, works great in my house. So that’s who I wanted to go with. Well, SunCom was running a special for $29.99 for 1,000 minutes, with unlimited nights and unlimited mobile-to-mobile minutes between SunCom customers. So all her calls to me are free, and she’s got another 1,000 minutes to talk to other folks. I added a block of 400 text messages for $5, and that brought the total plan to $35. Figure taxes and other crap, and it’ll run me around $40/month.

My existing plan with AT&T was costing me $70/month, so with the $30/month savings, it will take me 6 months to amortize the early cancellation fee and begin to actually see some savings. Since I had 13 months left on the contract, that means that over the next year I’ll actually save a little over $200 in cell phone service, and my wife will have a phone that works in the house again.

Back at the beginning of the year, we decided to buy Suzy a new car. If I’d read The Total Money Makeover before Christmas, we likely would have bought a good used car instead, but that’s a discussion for another time. We bought a brand new Nissan Versa hatchback, very good on gas, very dependable, and the first new car that Suzy has ever owned.

We secured our financing ahead of time through Capital One online, so we didn’t need to get hosed on trading in our 10-year old pickup just to make a down payment. So we kept the truck to haul things around and clan out our storage buildings, and over the past few weeks have used it to carry stuff to the flea market.

Well, last weekend the truck started to overheat on the way home from the flea market, so this morning when we left the house at 6:15 AM, we barely made it to the interstate before it started to overheat again. We pulled off, aborted our Saturday flea market attempts, and came home to get a few more hours sleep. When I woke up, adding about 4 hours sleep to the 2 I logged last night, and decided to go ahead and do some repairs to the truck.

When we took it in for an oil change in February, we got an estimate to fix every little thing that was wrong with the truck, including a coolant leak that was going to be pricy to fix. Obviously now we have to get that fixed before we can sell the truck, because unless we get it running well, we’ll see a lot less on the sale.

I checked out kbb.com, the Kelly Blue Book website, and it lists the truck as worth about $3800 in private sale for a vehicle of that make and model with that many miles on it. As is, I think I’d be extremely lucky to get $1500 for it. I think if I can spend less than $1,000 for it, and hopefully get about $3,000 for the vehicle, then it will be worth the money we’re gonna spend getting it fixed.

There’s a simple formula in deciding whether or not to fix up a car that you want to sell. First you figure out what you thin you can get for the car as it sits. Then find out what it will cost to fix the vehicle up. Then find out what you think the vehicle is worth on great condition. Check the difference, and if the estimated sale price of the vehicle plus the repair costs is less than the sale price of the vehicle in great condition, then you’ll make more money fixing the vehicle than if you try to sell it as-is.

So I drove the vehicle (slowly) over to the AAA Car Care Center and they’re checking it out for me. I took it over there because we’re AAA members, and we get a 10% discount on all labor there. Hopefully it will run me less than $800, and we can move the truck quickly. We’re gonna dip into our slush fund a little to make these repairs, so I’d very much like to make this transaction happen quickly to be able to re-fund our emergency money before long.

So that’s a little formula to help you decide whether or not to fix up a junker or not. I’m still fine-tuning whether or not to make the repairs to my truck, but I’ll get the repair estimate on Monday and make my decision at that point. Right now, we have to figure out how to get all our flea market stuff up the highway tomorrow without the truck, so any furniture-moving plans will have to be put on hold until next week or later.

So along every road there are stumbles, and my path to being debt-free is just like the any other. And this weekend represented one big stumble - books.

I read voraciously. And I love books. And I love serial novels, big, sweeping fantasy epics that take multiple volumes to finish. So this weekend I finished volume two of a series, and I hadn’t bought volume three yet. So I looked at my Amazon seller account (by the way, selling your used books on Amazon is a great way to move some of your excess bookage and get a few pennies back for them). I saw that I had about $25 in there, so I converted that into an Amazon gift certificate, thinking that it would be nigh-instantaneous process, and I could order my new book and satisfy my jones.

Not so much - 2-3 business days to process my gift certificate, and then a couple days to get my book. ARGH! I am sad panda. So as I head off to visit my parentals for my birthday, I happen to pass a bookstore on the way home. I pop in to see if they have the book I want in paperback, and break down and buy it in hardback.

Then I pick up another book in hardback.

Then I realize that I’ve spent $57 in the bookstore when I could have bought these two books on Amazon for more like $30. And I now have an Amazon gift certificate that I could have instead taken as cash into my checking account.

Not quite $100 for two books. Well done, Johnny. Well done.

It was a good book, but I’m not sure it was $100 worth of good. But that’s a small stumble. It’s actually smaller than the really stupid stumble I made this week. I stopped using credit cards months ago, because I paid them off and really do think that they’re evil. This idea of evil credit card companies was certainly reinforced by Aspire this week. I had called a while back to get them to drop the annual fee off the card, which was a whopping $79/year. They refused, and I had asked Suzy to call and cancel the card. Well, one thing led to another, and the card never got cancelled.

So the annual fee was applied. I threw away the credit card statement when it came, because I didn’t use the card. So when I missed the payment date for the annual fee, I got a $39 late payment charge, plus a finance charge on the $79, to bring the total balance to $119 for forgetting to cancel the card!

Suddenly my books look downright cheap in comparison. Dave Ramsey calls stuff like this “Stupid Tax,” and I certainly felt stupid as I paid the bill.

Go visit the Carnival of Snowflaking, which this time ’round features my article on selling at Flea Markets.

So our philosophy when setting up our booth at the flea market was similar to the thought process in pulling items to sell at a yard sale - anything we get for it is profit.

Now of course, that’s not strictly going to be the case. In hardline dollars and cents, there was a massive loss in the set of stereo speakers that I paid $300 for that I sold for $30. Until you figure in the fact that I paid $300 for those speakers in 1993 and hadn’t turned them on for at least a year. In the meantime, the $30 that I got for them can be immediately applied to a car payment, which all goes to our concept of snowflaking.

We chose items to sell at the flea market that we no longer use AT ALL, and no longer receive any joy of ownership from. If it’s something that we find useful even once every three months, it doesn’t get sold at the flea market. We’re looking for stuff that not only would we not miss it when it was gone, but we had forgotten we owned in the first place!

So once we selected an item, how did we figure out how to price it? We went through a series of simple steps and had a couple of rules for our pricing.

Rule #1 - Anything is worth $1.

I didn’t want to deal with change. It’s heavy, and messy to deal with. I’m looking for convenience, and there’s nothing convenient about a pocket full of change. So if we didn’t think something was worth at least $1, we put it on a section of the table that was $1 BOGO items. Realistically, my tenet of “anything is worth $1″ is pretty true, and I only mentioned the BOGO if someone seemed disinclined to pay $1 for an item. The idea is not only to make money but also to reduce clutter, so getting stuff out of the house was as important to me as getting maximum value for the item.

Rule #2 - Forget what you paid for it.

That money is gone. An you’ve gotten all the joy out of the item, or you’d still be using it or looking at it on a shelf rather than selling it at a flea market. So what you paid for it is irrelevant. It makes no difference that I paid a couple hundred bucks for an XBox. What matters is that I don’t play it anymore and someone was willing to give me $60 for it.

Rule #3 - Don’t mark anything with your final price.

There are no firm prices at a flea market. If you try to draw a hard line on pricing an item, you’re doomed. People who frequent flea markets love to haggle, and haggling is a contest. If the customer pays less for it than is on the label, they win. If they pay more for it than your bottom-line price, you both win! I frequently took half the sticker price on items, just to move them. A dollar in the hand is worth $5 on the price tag.

Rule #4 - Mark it $5 more than you’d pay for it at a flea market

That was my philosophy on a lot of things. If I’d pay $40 for something at a flea market, I marked it $50. That gave me not only a good flea market type price point, it also left me built-in haggle room.

Rule #5 - Beware of pricing things at mental sticking points.

People have different ideas of what’s a lot of money, but there are always certain things that you see consistently. $100 is a big number for a flea market item, so if you want $100 for something, you’ll get closer marking it at $95. $125 is a less scary number than $100, for some reason. I had several items marked at $45 just to avoid the $50 number. The psychology of pricing is important, because if your sticker price is too high, you won’t get the change to haggle, and that’s where you make your sale - when you talk to people.

So there are 5 rules (or tips) for pricing things at a flea market. Eventually I promise I’ll get to a breakdown of what sold and what didn’t, and why I think those things succeeded or failed.

I’ve read a lot of personal finance blogs where people talk about having garage sales, selling things on eBay, or selling things on Craigslist. All of those are great options, and I’ve done all those things myself for fun and profit over the past few years. But the one thing I haven’t seen anyone talking about is setting up a booth at a flea market. And in my opinion, overlooking the flea market would be a mistake if you have a bunch of excess stuff in your house (and let’s face it, you do!) and want to make a little extra money for it.

The flea market is to a yard sale what eBay is to Craigslist. Where a yard sale has a lot less overhead, you are dependent on the traffic in your area, or what you can generate with a newspaper or craigslist ad. With a flea market, you have a little bit of overhead and more hassle in moving stuff to the site for sale, but you have the benefit of increased traffic as well. Suzy and I have been planning to get started selling at a local flea market for a few months, and this weekend we bit the bullet. Here’s what we did, what we learned, and what we made in the end.

First off, we investigated two local flea markets. There is one about 30 minutes to the south of us, and one about 45 minutes north. We got up early one weekend morning and headed out to look at both markets and decide which one would be more profitable. The southerly flea market didn’t seem to have a great deal of traffic, and required a business license to have a booth. Most states and cities do not require a business license if you’re just reselling things out of your home, but check the laws in your area first.

We gathered up all sorts of stuff for our first foray into the flea marketing world - books, VHS movies, clothes, electronics, kitchenwares, whatever we didn’t want in the house anymore. We spent quite a bit of time pricing things and putting it all into plastic storage tubs for ease of transport. We have a pickup truck and a Honda Element, so we can move a lot of stuff at one time. Our initial outlay of cash was pretty low, as the rent for an outdoor space with two tables at the flea market we chose was $8 per day. We took two booths for two days, for a total outlay of $32.

We decided to spend $95 on a pop-up canopy from Wal-Mart, because the idea of sitting outside n August in North Carolina without shade seemed ridiculous to us. It turned out to be a great buy, as the tent not only saved us from the sun, but made our wares a little more attractive to people looking to get out of the sun for a minute or two. The tent went together in just a few minutes, and made a world of difference in our first flea marketing experience.

My first mistake on the weekend of the flea market was staying out wayyyy too late the night before. Flea markets open at 8AM or earlier, and the people that sell at flea markets also like to buy at flea markets, so the fact that we weren’t set up by 7:30 on Saturday cost us some customers. But the main reason it was a mistake to stay out til 2AM playing poker was the fact that we got up at 5 to load the cars and head out. That was brutal, so next weekend we plan to load the cars on Friday. We’ll still have to get up at 5, but we then can be set up by 7:15 or so. But when we finally got everything set up and set out, we started to move some things. Sales started off slow, but momentum built as the traffic picked up and more people came by.

We approached pricing things as we would at a yard sale, with complete disregard to what we originally paid for the items. These are things we are not using, so they no longer bring us any joy, and thus have no intrinsic value to me. $5 for something I paid $100 for ten years ago is better tha tripping over it on the way to the fridge for a midnight snack.

Another pricing tip - if you put price tags on your items, price them a few dollars higher than what you actually want for the item. Haggling is part of the flea market experience, and most folks who go to flea markets enjoy the haggle. I do to, so I tended to price things in increments of $5 more than I actually wanted for them. I sold a boom box for $5 that I had marked at $10, and a full-length mirror for $10 that we had marked at $20. It was worth the $10 just to not move it again!

The first day we had a whole table dedicated to books, at $2 per paperback and $3 for hardbacks. We also had a ton of VHS movies for $1 each. The VHS movies moved well, but when we sold two books all day, I made the executive decision not to bring books back and focus on more big-ticket items. Note - for us a “big ticket” item was $20 or more. We aren’t trying to pay off the car in one fell swoop here, just build up some momentum in our snowflaking and help make ends meet this month since I didn’t have much in the way of freelance writing work last month. My goal going into the weekend was to cover expenses (including the tent) and clear $100 profit.

We certainly exceeded our expectations, selling $191 on the first day, for a $56 profit and a freeroll on anything we sold Sunday. Sunday saw us with a better understanding of what people were looking for, so we targeted our selling better and sold a ton more. All total, our profit for the weekend was a whopping $456! We’ve already made plans to expand to 3-4 booths next weekend, and part of our profits this weekend will go to buying an additional tent so we can have more covered shopping area, and more shelter for my exceptionally fair-skinned wife.

I’ll be back later in the week with a detailed list of what we sold and what I considered to be our best decisions of the weekend.

I break Rule #1 all too often, that’s why I felt the need to start a personal finance blog. I’m Falstaff, a hillbilly from North Carolina who has a good job, plus a bunch of freelance work, and I still find myself broke more often that I like.

I’d like never.

My wife and I have the same disease that most Americans have. We have a terrible case of buy-itis. We see something we want, and we buy it. Or at least we did. Since the beginning of this year, when we found Dave Ramsey and his personal finance teachings, we’ve been living without credit cards and working to “act our wage” for a change. It’s been good, but it’s a tough ride. Here’s where I’ll chronicle our efforts at debt reduction and wealth increase. Come along for the ride, you can reach me in comments.

Welcome to the ride, you CAN has moneys!