J.D. at Get Rich Slowly recently published an interesting article on lazy money mistakes. I’ve made several of the lazy money mistakes he writes about and one in particular just about a month ago that really bugs me. I foolishly sent in a student loan payment late and lost a 1% interest rate reduction.

There is no way to explain this other than pure stupidity and laziness. I had the money in my checking account to make the payment  early. I had a reminder set on my computer, as I do for all of my bills. All I had to do was write a check, put it in an envelope, and mail it. I had never been late with a payment before (as evidenced by the interest rate reduction I suppose), but life just got busy and I lost focus on my finances long enough to miss this payment. That cost me a small late fee and probably a fair amount of money in extra interest over the life of the loan.

It seemed that I had everything in place to keep making this payment on time, yet I still failed. Apparently, automation really is one of the most important things you can do to manage your money well. David Bach writes about this in-depth in the The Automatic Millionaire.

I have to admit that I never really fully bought into the importance of automation before, but I think I’m sold on it now. Of course, this particular student loan company doesn’t offer automatic payments and I have to mail in a payment coupon along with a paper check. When automation isn’t an option, I guess you have to be extra careful to make payments early and hope that the non-automated business will get caught up with technology some day. A secondary reminder system would probably have helped too. As would have writing out the checks and stuffing the envelopes ahead of time so that all I had to do was toss it in the mailbox. Oh well, nothing to do now but chalk another one up to stupid tax and move on.

What about you? Do you have any lazy money mistakes or tips for preventing them in the first place?

By Eden, Mon 20 Jul 2009, Comments Categories: Finance, Reflecting on Stupidity

I recently read Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions, by Dan Ariely. This book is well written, and easy to read. The many experiments described in the book are presented in a lively way which elicits interest, and Ariely goes into just enough detail without boring the reader by getting into esoteric points which are more appropriate for journal papers.

If you think you’re a rational person, read this book as soon as possible. It will help you understand how we are wired and/or conditioned to be irrational, and we typically aren’t even aware of it. This concept can be a bit disheartening, but the good news is that we can fix at least some of this irrationality by being aware of how it can occur and by making a steady effort to compensate for it. The key, it seems, is increasing our awareness and planning to be irrational (this concept is explored in-depth in The Black Swan
as well).

This may not be a ‘personal finance’ book, but it offers a lot of insight into how and why we make decisions and it presents a lot of examples tied directly to money. Not only is this book very interesting and enlightening, but I found it to be quite entertaining as well. I would put this one near the top of your reading list.

By Eden, Fri 17 Jul 2009, Comments Categories: Books

I just finished reading 48 Days to the Work You Love by Dan Miller. I found this book to be generally helpful and easy to read, but it doesn’t offer anything groundbreaking or terribly enlightening either. I thought it had a lot in common with What Color is Your Parachute, though I found 48 Days to be much more readable and less boring (maybe it’s just me, but I didn’t care for What Color is Your Parachute at all).

48 Days to the Work You Love will likely help you find inspiration, motivation, and just may spark a few ideas. However, there isn’t much ‘meat’ to the book. It only glosses over these topics at a high level and leaves you still to do the work of figuring out the details and coming up with a plan for finding new work or making money on the side. It offers nothing that you can’t find on hundreds of websites for free, but if you want to spend some money on this book you’ll have it packaged into an easy-to-read, paper format.

If you think that earning an hourly wage, working for someone else is the only way to make a living, you can certainly benefit from reading this book. If you already know that isn’t your only option, and/or you are already earning money on the side, you probably won’t find anything new here. I’d say it’s worth reading if you think you need some help finding a new direction with your work and income. If you already have that part figured out, there isn’t anything else for you here.

By Eden, Thu 16 Jul 2009, Comments Categories: Books

It’s been a while since I updated my credit card debt payoff progress. That’s probably because I haven’t been focusing on paying them off very much lately. Of course, I’m not using the cards, so even just paying the minimum payments is reducing the balance. However, I’m not paying much extra so the progress has slowed quite a bit lately.

My starting balance was $25,559.82 when I started this blog in September, 2007. Through the end of June, 2009, the balance is now $7,876.90. The total paid off so far is $17,682.92. That’s about 22 months, for an average monthly reduction of $803. I was doing much better with that, but over the last few months I’ve only paid a couple hundred dollars toward the debt.

I started 2009 with the goal of paying off the credit cards completely. I’m no longer on pace to make that happen, but I’m still hopeful that it can be done. If I can cut out some more spending and find some extra sources of income it might still happen. At the very least, I want to finish paying off the smaller of the two cards, which has a balance of $2,905.70. Getting at least that much done shouldn’t be a problem.

By Eden, Wed 15 Jul 2009, Comments Categories: Credit Cards, Debt

I weighed in at 260.6 pounds this week, for a gain of 0.8 pounds. That leaves me with 50.7 pounds to lose for my iPhone Weight Loss Challenge.

I followed my diet well Monday through Friday, but completely went off the deep end on the weekend and didn’t follow it at all. This carried through to Monday too, so I’m guessing the three days of gluttony did some damage to the previous five days of good eating.

On the other hand, I know my 3.6 pound loss from week one was probably a bit of a fluke so I don’t feel too bad about adding less than one pound this week.

My average lost per week is now 1.4 pounds. I’ll be happy as long as it is over one, but my goal is to lose two pounds per week.

I didn’t do as much exercise as I should have last week either. I’m back on my diet today and hopefully will be doing more exercise this week too.

As always, you can see my all-time weight loss progress chart here.

By Eden, Tue 14 Jul 2009, Comments Categories: 54 Pound iPhone Challenge, Weight Loss