"There are plenty of ways to get ahead. The first is so basic I'm almost embarrassed to say it: spend less than you earn." - Paul Clitheroe

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Shannon Christman

Is Picking Up Pennies Still Worth My Time?

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picking up pennies“If Bill Gates saw $100 lying on the ground, it wouldn’t be worth his time to pick it up,” a friend told me once. She reasoned that he would make more during that time by doing something else. At an estimated salary of  $1.38 million per hour, Gates would likely make more than $100 in the two seconds it would take to pick up that $100 bill.

Is It Worth It If You’re Off the Clock?

“But what if he’s off the clock when he sees the $100?” I asked my friend. “Then it would be worth his time.” I realize that people like Bill Gates are never really off the clock, and in fact, that $1.38 million per hour includes even the minutes he’s sleeping, but my point was that he could just as easily spot the cash when he’s on the beach as when he’s doing business. Then he’s making money in his leisure time, not when he’s earning his salary.

Even if the $100 flew in his office window while he was working, I added, he could easily continue certain types of work – thinking of new ideas or talking to an assistant, for example – while he bends down to pick up the cash. Then, during those two seconds, he would have made $233 instead of $133. Even minimum-wage workers are allowed a few seconds to stretch, so no one is cheating his or her employer by picking up a penny on the clock.

The Value of Picking Up Pennies

Odds are, you’re not Bill Gates, you don’t make $1.38 million per hour, and you never see $100 bills lying on the ground. You probably see quite a few pennies, though. Is it worth your time to pick them up? If you could make a living picking up pennies, one after the other,  40 hours a week, you would make $37,440 a year, assuming two seconds to pick up each penny. Some people, like my friend, would say that picking up a penny is not worth your time if you make more than $37,400 annually. I say that, even if I made $500,000, picking up that penny would be worthwhile because I would then have made $500,000.01.

The amount of money you make is irrelevant to whether it is worth your time to pick up a penny. However, other factors may lead you to choose to let the penny remain there. By picking up a penny on a busy sidewalk, you risk being trampled and having to pay much higher medical bills. If you pick up a penny whose previous owner you can identify, you may be stealing (at least ethically, if not legally). Picking up a penny on a first date might give your date the idea you’re cheap, and you could miss out on a second date. (Though, if he’s a keeper, he will be thrifty himself and may beat you to the penny.)

For Most, It’s Worth It

You may be too tired to pick up the penny; your back may hurt; a child may appreciate finding it more than you would. Any of these circumstances could provide a legitimate reason to let a penny remain on the ground. “I make too much” is not a good excuse. If you had picked up the penny, no matter who you are, you likely would have made more.

Do you think it’s worth picking up pennies? Share your thoughts in the comments below!

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How to Start a Lending Library for Your Church or Other Organization

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how to start a lending library

Public libraries are great money savers for readers, but what can you do if your reading interests are more specialized than those of the general public? Many community organizations, historical societies, and places of worship offer small libraries of special-interest materials for their members. If your organization does not have a lending library, consider starting one of your own. Here’s how.

How to Start a Lending Library

You already share interests with your fellow SCUBA divers or philatelists; why not share your books? Bed and breakfast owners might also consider offering their guests a small selection of reading material to enjoy during their stays. Starting a library is not as expensive or time-consuming as it sounds. Specialized library supplies can be replaced with common office supplies, and a small collection doesn’t require an elaborate cataloging system.

Begin by asking members of your organization to donate books and other media on your subject of interest. You may wind up with some items that are outdated or in poor condition, but you will most likely get some generous donations, as well. You can also ask for monetary donations to buy new materials; if you do, ask the group for recommendations on the best books and videos on the subject.

Once you have enough materials to start a library, decide how you want to organize them, how you want to let people know what’s available, and how to manage the circulation. You can also consider promoting the library by writing reviews of items available for checkout in the organization’s newsletter.

Organizing the Books


This can be as simple as placing them in alphabetical order by author, or as complex as using the Library of Congress cataloging system. When I put together the library for our church, I alphabetized the fiction books and used the Dewey Decimal system for the non-fiction so that people could find books on similar subjects next to each other. (I searched the public library’s catalog for the same or similar books to get the appropriate Dewey Decimal number.) You can group materials by subject on the shelves and alphabetize within the subject.

Cataloging

A library of more than a hundred items or so should have a catalog to let people know what the library owns. Sophisticated cataloging software is available, or if you have a volunteer with computer skills, you can customize an ordinary database for the library’s catalog. There’s always the low-tech route, too—for our church library, we use index cards for a card catalog and place the cards in a box.

Each database entry or catalog card should include, at the minimum, the item’s title, author, and location on the shelf. I would also include publication date, publisher name, series, and subjects. The Library of Congress has a list of formal subject headings used by public and academic libraries, but you may choose to devise a set of subject headings that better suit your organization’s membership. (For example, the formal subject heading for books on the theology of end times uses the word “Eschatology,” but few members of our congregation have formal theological training, so our catalog cards say, “End times.”) I recommend keeping a list of subject headings so that the terminology is consistent throughout the catalog.

People may search for a book by its title, author, subject, or series, so be sure any computerized database is searchable in these areas. If you are using index cards for the catalog, make a separate card for each and alphabetize them all together.

Keeping Track of the Books

To manage the circulation (keep track of what’s checked out), you may either choose to set hours of operation and have volunteers staff the library, or you may design a self-checkout system that allows people to access the library at any time. If you choose the latter, it’s unlikely that you will be able to collect any fines, but you should still decide on and post guidelines for how long readers can check out items so that no one has to wait too long for a popular book or DVD. If you choose a self-checkout system, you might also consider holding orientation sessions (especially when the library is new) to let people know what’s available and how to check it out.

Preparing the Books

You can prepare materials to add to the library at a relatively low cost with items from an office supply store. To start our church library, I used address labels, envelopes, index cards, rubber cement, and contact paper. I printed out labels with the church’s name on it to place on the title page and labels with the book’s shelf location (Dewey Decimal number or first three letters of the author’s name) to place on the spine. On hardcover books, CDs, videos, and DVDs, I covered the spine label with contact paper; on paperbacks, I covered the entire spine and the vertical cover edges with contact paper (to reduce the wear that comes with multiple readings).

I then took a small envelope, cut off the top half of the flap side of the envelope, and sealed the bottom half to create a card envelope, which I glued in the back of the book using rubber cement. I wrote the title of the book on an index card with columns for people to write their names, phone numbers, and due date beneath the title and placed the card in the envelope pocket. (Caution: If your library is open to the public, learn about any applicable privacy laws before using cards with personal information on them.) Library users can take out this card and place it in a second box to indicate that the book was checked out.

Maintaining Your Lending Library

If you expect your library to grow beyond the original collection, you should also consider how you will handle donations and/or budget to buy new books, as well as how you will hold library users responsible if they do not return an item. (Will you expect them to pay to replace it with an identical item, ask them to donate a similar item, or just tell them to keep it and enjoy it?) Think, too, about what you will do if the library grows too big: will you weed out old books or find more storage space?

Each lending library has different needs, and each librarian or library committee (which may be just you) will have different ways of meeting those needs. Whatever decisions you make about how to operate your organization’s library, you will find that a little work and a small budget can create a valuable resource for everyone in your organization. As a bonus, you (the librarian) will often get to be the first person to read any interesting books donated to the cause!

Have you started a lending library and have any tips? Share with us in the comments below!

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You Need More Than Money to Join the Upper Class

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join the upper class

I used to think social class was directly tied to wealth — if you were rich, you were upper class; if you were poor, you were lower class. If you were neither rich nor poor, you were middle class. Of course, even then I had a sense that because “rich” and “poor” are such relative terms, a rich person has more money than I do, a poor person has less, that most of us think of ourselves as middle class even if we’re not.

My parents own a home in a retirement community in Florida. The people there dress down, get involved in all kinds of activities — everything from a kitchen band (whose members play utensils like instruments) to a rowing crew — and are generally pretty friendly. You might consider them middle class, but many have accumulated more wealth than the average American, and they maintain two homes, one in Florida and one up north.

Upper Class vs. Middle Class

Once when we visited my parents, my husband and I drove to a nearby community (also inhabited mostly by retirees) for dinner. The entire atmosphere there was different. Everything about the neighborhood shouted, “Upper class!” The buildings were fancier, the clothes dressier, and the people not as friendly. My parents’ neighborhood has several athletic courts, a community building, and boat docks; the other community boasts several blocks of restaurants and boutique shops. As we strolled down the streets, where I felt a bit uncomfortable in my middle-class clothes, it struck me that many of the people who lived there could have a lower net worth than my parents and their neighbors. They might be upper class, but they are not necessarily wealthy — in fact, they could be deep in debt.

Social Class is More Than Just Your Net Worth

I finally realized that social class is not just about how much money you have, but also about how you spend your money and how you present yourself. Earning a high salary is not enough to break the bonds of social class, nor is winning the lottery. Those who are born to the upper class have the advantages of being taught from infancy upper-class social skills and vocabulary and of being surrounded by the things (clothes, furnishings, etc.) that signify good taste. Anyone who wants to be a part of the upper class, but is born in a lower class, must be a sharp observer who can understand and imitate the social graces of the upper classes. (Incidentally, those of us in the middle and lower classes also learn the social skills, vocabulary, and tastes of our respective classes, but few people try to imitate us.)

Class and wealth are closely related, and it’s unlikely that someone in the upper class is broke or that someone in the lower class is a millionaire. If you knew that Bill had $10 million net worth and Bob had $10 net worth, you could probably guess which class each belonged to. However, Bill might wear his hair in a mullet, decorate his home with velvet Elvises, and invite all his friends over for NASCAR parties, while Bob makes a high salary but spends it immediately to pay the mortgages on three homes, a vacation in Europe, and new Dolce & Gabbana suits.

Do Appearances Matter?

A reader commented that looking poor may prevent you from socializing with wealthy people, who can help you increase your own wealth. This argument has some merit. Appearances and actions do mark us as members of a particular social class and, in some sense, actually make us part of one class or another. However, not all wealthy people are part of the upper class, and not all upper-class wealthy people will refuse to socialize with you just because you are not wealthy or upper-class, as well.

Many middle-class people and even some lower-class people have accumulated a great deal of wealth. Socializing with wealthy people of the class in which you feel comfortable can be of more benefit to you than trying to fit in with a group of people who not only make more but also spend more than you do. Middle-class, wealthy people have contacts who can help you find a better job; they also know how to save and invest the money they do earn. Advice from them could be even more valuable than advice from someone who spends their income on all the trappings of the upper class.

I often wonder why so many people think upward mobility is a goal worth the effort. To fit in with the upper class, not only would I have to learn how to act differently from the way I grew up, but I would also have to spend a lot of money on the right clothes, the right car, the right home, and the right education. And even if I do learn to fit in with members of the upper class and benefit from their wealth-gaining insight, I still might not be able to increase my income enough to cover the extra expenses.

Why Do People Overspend On Upward Mobility?

Juliet B. Schor, The Overspent AmericanJuliet B. Schor, in her book The Overspent American, argues that we spend more money on socially visible goods, largely because we fear “falling down” to a lower class. Ironically, overspending almost guarantees that we will fall if we lose our source of income. If we already spent all our money to buy prestige, we would have nothing left to buy necessities. I wonder why we don’t fear climbing up the social ladder instead. After all, it costs a lot to live like someone in the upper class. Plus, moving into a new social class requires a new way of presenting ourselves, and when that happens, there’s no guarantee that we will still feel comfortable with our old friends in the social class where we used to be at home.

I’m not arguing for a caste system. I certainly believe we should be free to move from one social class to another, and I enjoy interacting with people from all social classes. I also have nothing against anyone whose goal is to be part of the upper class. But I, for one, am happy in the middle class. I’d rather maintain my position here, where I already feel comfortable being myself, and maybe one day I will have enough money to retire to a nice, middle-class retirement community in Florida.

Photo credit: Flicker.com/ caribb

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10 Inexpensive Alternatives to Flowers at Funerals

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alternatives to flowers at funerals

Romantics will tell you that fresh flowers are perfect objects of condolence because they symbolize the beauty and brevity of life; allergics will tell you that they would prefer their sniffles and tears at a funeral to be from grief. Whichever position you hold, I hope you’ll agree with me that fresh flowers can cost a lot for the amount of time they last – which are just a couple of the reasons you might want to consider other alternatives to flowers at funerals.

10 Inexpensive Alternatives to Sending Flowers

When the deceased was well known, a grieving family may receive so many flowers that they hardly notice the particular arrangement you lovingly selected. Often, other means of condolence can be better appreciated and less expensive than fresh flowers.

  1. Send a potted plant. For those who want to stick close to tradition, consider sending a potted plant from your garden in a basket or pot from a thrift shop; grieving family members can transplant your gift into their yard and have a lasting memorial to their loved one.
  2. Donate to charity. This is becoming more common; many obituaries will suggest a favored charity to receive gifts in lieu of flowers. If no charity is suggested, be sure to choose one the deceased would appreciate; don’t give to PETA if his favorite meal was surf and turf or donate to a church if she was an atheist.
  3. Housesit during the funeral. Consider housesitting during the funeral, particularly if you did not know the deceased well but are close to a family member. Sometimes homes of grievers are targets for burglars who browse the obituaries looking for names of family members and funeral times.
  4. Offer babysitting services. Likewise, many families could use a babysitter during the funeral. Families with children too small to attend the funeral would greatly appreciate having someone they know to stay with the young ones so that everyone else can attend. If you plan to attend the funeral yourself, offer to take the kids away for a few hours while the adults make funeral arrangements.
  5. Write a letter. Tell the family how much you appreciated the person who died. A letter works well if you were closer to the deceased than to the family. Tell stories about their loved one that they might not have heard; recall fond memories so that they have an opportunity to smile during a sad time.
  6. Create a photo collage. You may be able to display a photo collage of the deceased at the meal for the funeral. A collage gives mourners something to gather near and often sparks memories for those who see it.
  7. Cook a meal for the family. If you don’t cook well, consider putting together a tray of lunch meat (assuming they are not vegetarians) so that the family and those who visit during the days following the death have something to prepare easily when they get hungry. (Food is often the last thing on their minds.)
  8. Offer to help with laundry or run errands. It’s difficult to manage these duties alone while planning the funeral or managing details of the estate. One fewer thing on a to-do list can be a big relief for someone who is grieving.
  9. Offer correspondence services. If you know the family well, offer to make a list of names and addresses of everyone who sent condolences, to make calls to far-away friends and relatives who might not have heard about the death, or even to answer their incoming calls for a while so they can rest.
  10. Stick around. Mourners often say that the hardest time is after the funeral when all the commotion has died down, and they are left alone. Be sure to check in on a friend who has lost a loved one several weeks and months after the funeral. Call or send cards each month saying, “You’re still in my thoughts and prayers,” or make a point to schedule more frequent visits if your friend now lives alone.

Remember, each person mourns differently. Know the person you are trying to comfort and offer what will be most appreciated. Some will want to talk; others will need some space. If you’re not sure what to do, consider asking your friend how you can best help him or her get through the difficult grieving process.

Do you have any other ideas for alternatives to sending flowers? Share them in the comments below.

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The Best Time to Pay Bills

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calender bill reminder

We still pay most of our bills manually, by which I mean we don’t have automatic payments set up. While I recognize the advantages of automatic bill pay (no postage, time saved in writing out checks, etc.), I actually enjoy the task of paying bills the old-fashioned way. I like writing out checks and recording the bills by hand; it helps me better monitor our family’s spending.

I generally pay bills the day I receive them. Due dates seem to be getting closer and closer to the date of receipt, and I don’t want to risk having to pay a late fee because the post office was slow in delivering my checks. By paying bills as soon as I get them, I break one of the personal finance rules my parents taught me – wait as long as possible to pay bills so that you can collect the interest on the money.

Is it better to wait or pay bills immediately? The question is moot if you don’t have the money available, but when you have it, the risk of late fees has to be weighed against the potential loss of income. For payment on loans, of course, it’s usually best to pay right away because your debtors will be collecting less interest on your money, but what about when the cost is the same no matter when you pay?

This week, the question of when to pay came up when I got a property tax bill for $2,700, which was not due for two months. If I had that money in a savings account earning 0.25%, I would earn just over $1.00 in interest. While I have been known to take advantage of opportunities to save $1.00, I wouldn’t risk forgetting the bill and losing the early-payment discount rate for that amount. My money market account, however, pays somewhat better – over two months, I could earn about $10, an amount I consider worth waiting to pay a bill for.

Even more significantly, by paying the bill early, I would lose out on the opportunity to make even more on that $2,700 through investments. Last week, my husband made $100 on a similar amount of money through a short-term stock market trade. Our $2,700 could earn a lot in the stock market in two months, but we could also wind up with a loss if we have to sell a stock that’s down when the bill comes due.

We have already used this tax money to our advantage by getting it out of escrow several years ago. When we received a notice that our tax authority had no record of receiving a check from our escrow account, we called the mortgage company and discovered that our responsible payment record and level of equity had earned us the right to close the escrow account and pay our own taxes – not only is that money now ours to invest until the tax bill comes each year, but our mortgage is also $200 lower each month!

I probably should have held the tax bill for a while before paying it, but I didn’t. Yes, I lost some money, but I gained some psychological advantages – a sense that I had one less thing on my to-do list, and one less payment to consider when figuring out what money we will need available in the upcoming months. I paid the bill within a week of receiving it – but I dropped it off at the tax collector’s office, which I passed on my way to the doctor’s office, so that I could save $0.84 in stamps.

Image courtesy of Aunt Owwee

Managing Subscription Costs

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How many subscriptions do you pay for? Be sure to count not just magazines and newspapers but also services (warranties, computer virus protection, cell phone contract, ISP, etc.), memberships (gyms, fan clubs, business associations), and entertainment packages (Netflix, cable or satellite, online game sites, etc.) Count anything for which you are billed on a regular basis, other than housing and utilities. The number might be higher than you think. And it’s likely that the total cost is higher than you think, too, especially if you make automatic payments. If subscriptions are costing more than you would like, consider these methods for determining which ones to cut out when you cut costs:

First, consider whether the subscription actually makes you more money than what you spend on it. My weekend newspaper subscription does, because I clip and use a lot of coupons. So does my high-speed Internet access, which I use for earning money. Some magazines offer free subscriptions; others offer enough coupons and money-making/money-saving ideas that they pay for themselves. Does your specialty business magazine keep you updated on news in your industry? Acting on that information may help you increase your earning potential.

Be careful about counting service contracts as money savers. As with many warranties, you may be better self-insuring. Yes, you could save hundreds – even thousands – on an emergency repair if you have a service contract, but you are more likely to go several months or even years without needing the service. (Companies wouldn’t offer service contracts if they didn’t make money on the regular payers who never use the service.) Find out if you can pay a per-use fee for repairs or technical service; if you can, it might be better than keeping up a “subscription” you may never use.

Talk with members of your household and nearby friends you to be sure you aren’t duplicating subscriptions. A friend recently told me that her household subscribes to more than a dozen magazines and that they get two subscriptions to their favorites so that more than one person can read them at the same time. I know that periodicals can become outdated quickly, but not so quickly that you can’t wait a few hours until someone else reads them! The same goes for online services – if you can share one subscription among family members, do so.

Consider eliminating subscriptions with similar content. When I had my first baby, I signed up for two or three free baby magazines. They were so much alike that I still can’t tell you which one was which. Had I been paying for them, I would have cancelled all but one. If you find some of your subscriptions starting to look too much alike, choose your favorite and cancel the rest. You can always buy a single issue of the newspaper if your son’s picture appears in the one you don’t get or pick up a single magazine at the grocery store checkout if it has a particularly interesting feature.

If you maintain a subscription for certain times of the year – for example, keeping expanded cable only to watch the NFL Channel during football season- it might be worth the disconnect/reconnect fees to subscribe only during that time. If you can, choose shorter subscription lengths for subscriptions of seasonal interest; the lower rates for longer time periods are beneficial only if you are sure you will still want the same subscription continuously for the next several years.

You may also get more enjoyment out of your subscriptions if you cut down on the number of them. For example, simultaneous membership to several online game sites might give you access to more games, but you still have only a set amount of time to play each month. Consider subscribing to one at a time and getting as much play value out of each site before you move on to another site with different games.

Before buying a higher level of subscription, look closely at what additional benefits you receive. Will you really read all those personalized reports or go to those VIP events? If not, keep your regular subscription. If you’re not sure, give yourself a set amount of time to try out the extras. At the end of your trial, be honest with yourself about whether you have used and truly enjoyed the extra benefits. Ask if they’re worth the extra expense. If not, return to a regular subscription.

Finally, if you really want to cut back on your subscription expenses but don’t want to cut out any of your favorite subscriptions, consider asking for a renewal as a gift. It’s possible that your loved ones already considered giving you a subscription but changed their minds because they don’t know what you already receive or whether you have renewed your subscription recently.

Subscriptions you purchase should be something you enjoy and use regularly. If you find that they have become yet another obligation, it’s definitely time to cut down on them. You shouldn’t have to keep on paying for something if you no longer find it interesting or helpful.

Image courtesy of Eric Rice