New Way to Bank Extra Cash

Today I am taking off for a quick three day / two night business trip.  I don't travel that often, but every couple of months I need to attend an out town meeting or drop in with a supplier.  As a part of my quest to squeeze a little more money out of my budget I am going to try and use these business trips as a way to increase my income.

How can I turn my travel into extra money?  First, I signed up for all of the frequent traveler accounts that I may use while on the road.  My employer lets its employees keep the rewards they rack up for personal use.  For the first couple of trips I wastefully failed to claim these benefits.  I now have accounts with each of the major airlines that service my local airport and a selection of hotel chains that I will use for lodging too.  In fact, with only three business trips and two night of personal hotel stays I have nearly earned enough points to get a free hotel stay, worth $60, by simply doing things I would do anyway.  Using these programs I will earn something of real value as I schlep around for work.

The second way I can put money back in my pocket from business travel is to use my daily spending account wisely.  Rather than be forced to collect receipts for every little purchase while I am out of town, I am given a fixed amount of money to spend per day.  This money, typically called a "per diem" allotment, is intended to cover my food, tips, and miscellaneous expenses I incur.  While this amount is not exorbitant it is certainly more than I need if I spend my money wisely.  A typical per diem can be anywhere from $30-75 per day depending on the type of trip.  Even at $30 a day I can eat pretty well in almost any city and pocket the extra.  In the past I have let this potentially lucrative extra income go to waste by viewing my business trips as an excuse to let loose from my normal budget and "eat like a king."  I would order a $20 steak for dinner and skip the hotel's continental breakfast, while not even thinking about the splurge as wasteful.  Of course, I would only order like that at home, on my dime, for a special occation.

It is important that I remain ethical in how I use my travel dollars.  Like with taxes, I want to claim all that I am rightfully entitled without bending any rules or abusing the system.  For example, it may be in my best interest to fly on an airline that is within my favorite frequent flier program, but it would be unethical to force my employer to pay more for a ticket just so I can maximize my personal gain.  It would also be unethical for me to accept free meals from a client or even worse to solicit those meals in order to pocket my per diem cash.  As it should be with all things it will be ethics first and frugality second.

From now on, it will be like a game to see how much extra cash I will have left at the end of the trip.  It should take some of the sting out of being away from my lovely wife (who hates when I travel) and sleeping in an unfamiliar bed.  Wish me luck and safe travels.  Thanks for reading.

On another note, today the Festival of Frugality #115 went live over at Broke Grad Student.  One of my posts, Frugality Making a Come Back, was featured.  If you have some time head over that way to check out the carnival.

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$940 in Found Money!

At the start of the year I wrote down my goals for 2008.  One of these goals was to create found money, which is money created outside of my normal income.  For now I have embarked on this goal primarily by selling unused stuff on eBay for extra cash.  Most of what I have sold is old inventory from my failed multi-level marketing business.  I bought this stuff for about $2,000 and the debt is still hanging around on my credit cards.

I have finally completed all of my auctions and tallied up the results.  I had a lot of sales, when you look at the gross amount, but unfortunately I found that the fees and shipping expenses greatly cut into my returns.  The gross amount taken in from all of the auctions was $940!  Next, we subtract the PayPal fees that averaged 4.5% and we end up with $898 that arrived in my checking account.  Next we must subtract approximately $45 in listing and final value fees paid to eBay (or about 4.8% of the gross).  Next we must subtract the shipping costs.  I was completely blown away by how much shipping has gone up because of fuel costs and surcharges.  Thankfully I learned quickly and increased the amount I charged after shipping the first round of product and loosing money on two of the sales.  In total I spent $272 on shipping.  That leaves me with $581 in "profit."

My return of $581 equates to a massive loss for the MLM business venture (should I write off the loss on my 2008 taxes?), but then again a few days ago all of this stuff was just sitting in a closet taking up space.  It is important to realize that $581 is much better than $0.  I hope this may inspire some readers to dig out their closets and start to pull in extra cash in the same way.  As to where the money will be spent, it seems that we needed new work clothes/shoes, text books, a printer for the computer, and repairs for the car.  In the end I think there may be a few extra bucks left for debt payment, but only a few.  That is another battle that is just getting started.  I wish everyone luck with their own efforts to create found money.

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Open Wallet: 2007 Taxes

I got down to business with our taxes yesterday afternoon. I have written before about how I was excited to do our taxes this year, especially because this will be the first year for us to itemize. I guess it really takes a personal finance geek to get excited about itemizing. I used the online program from Turbo Tax to make the process as painless as possible.


Right off the bat I got a bad surprise. Despite completing DW's W-4 to claim no exemptions, her employer still withheld no where near enough taxes. I had a feeling this was happening as I would look at the pay stubs, but I wasn't exactly motivated to decrease her take home pay. The Turbo Tax software I used keep a running tally of your results. I input my W-2 first and was greeted with a refund of several hundred dollars. Next I input DW's W-2 and saw us swing to owing $400. Bummer.

The next step was to start inputing the itemized deductions and credits. It cost me $29.95 to use the Deluxe version of Turbo Tax to get this done, but it was worth it to me for the sheer time savings. If your tax return will not require itemizing (meaning your deductions will be less than $10,300 for joint filers) you should use the FREE version.

The biggest of my deductions was the mortgage interest deduction. We bought a house back in May 2007 so we get to claim this credit for the first time. We also paid 1% of the loan in points and $243.21 on our share of property taxes. All of this pushed our real estate related deductions to $9,127.

The next deduction on the list was $167 for automobile registration for our two cars. After that I had to decide between deducting estimated sales tax or the $2,400 in state income taxes. I got a little lazy and just went with the income tax route. Our sales tax rate approaches 9% between state and local so that may have amounted to more, but it is also a pain in the rear to calculate. Finally, I claimed $400 in business expenses for 2007. This includes some use of my personal vehicle for non-commute work related driving.

The final positive to the bottom line was to claim the Hope Credit for my wife's 2008 tuition. I made sure to pay the bill in December 2007 so it could be claimed on our taxes ASAP. Her half time course load at community college was $665 for this current semester and it was 100% refundable. She will have one more year of Hope Credit left that will apply to 2008 so I look forward to that next year as well.

After deductions and credits we are owed a federal refund of $509.00. It is less than I had anticipated but any refund is better than none. The biggest effect on the bottom line came from my wife's too-low withholding and then a $665 education credit.

As for the state, I will be getting a $410 refund. I used the same data as the federal and Turbo Tax pulled it right over (for a fee of $30 of course) and eFiled for me. I'm not sure why but every year I have gotten a nice sizable state refund. Maybe I should increase the number of exemptions I claim. No sense in giving them an interest free loan every year.

Here is the breakdown:

2006 2007 Adjusted Gross Income $53,170 $66,121 Less: Itemized Deductions $0 $11,692 Less: Standard Deduction $10,300 $0 Less: Personal Exemptions $6,600 $6,800 Taxable Income $36,270 $47,629 Income Tax Liability $4,686 $6,361 Less: Tax Credits $0 $665 Net Tax $4,686 $5,696 Federal Withholding $4,659 $6,205 Estimated Payments $0 $0 Telephone Tax Refund $40 N/A Total Payments $4,699 $6,205

Net Refund $13 $509 State Refund $272 $410

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Issues of the Day

Today the Carnival of Personal Finance #136 was hosted at Green Panda Treehouse.  My post $272 of Found Money was included along with a ton of other great content.  I know that I'll be spending some time today browsing through all of the great links.

In other news, I had to bite the bullet and reformat my computer last night.  My operating system had gradually descended into unusable territory so it was time to rebuild the system.  Because this happens with a predictable pattern (thanks Micro-shaft) I was fairly well prepared.  I already have an external backup drive in place so it was only a matter of copying over the most recent additions to the My Documents folder and exporting my Mozilla bookmarks (which are now full of great personal finance blogs).  I highly recommend everyone buy an inexpensive external drive (or two) and make regular backups.  From a purely financial perspective, all of the information you would loose in a hard drive crash could be worth hundreds or even thousands of dollars.  There are also the irreplaceable digital pictures, home movies, or other priceless data that you will want to save for a lifetime.  Think of a backup system as insurance for all of the hard work you have put in creating, downloading, researching, and writing the content stored on your computer.

I also had a few more of my Found Money auctions come to an end.  I have added almost another $100 to previously posted amount of $272 so the current total is over $350.  I have four more auctions that will close next weekend which will likely put me into the $500 territory.  I can not wait to get this money applied to my credit card balance.  Of course I am only human and I did spend some of the money to buy a much needed printer (I did not have one at all before and I really needed it).  I researched the best budget printer and ended up finding a great solution for $50.  That will be my only indulgence, so look for my credit card balances to drop by at least $400 extra in time for my February Net Worth Update coming up in 10 days.     

Thanks for reading.  As always, if you like what you've read, please subscribe to my RSS feed and/or come back again soon.

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$272 of Found Money

Last weekend I got off my butt and started the process of selling some unused clutter on eBay to create some "found money". It is one of my goals for 2008 to work hard to create extra cash to speed up the process of paying down my debt.

So far I have completed 10 auctions of inventory from my failed MLM business. I looked at other auctions to get a feel for how much money I might generate, and it turns out there is a fairly robust trade in this company's merchandise. This is in spite of a company-wide ban on online selling, through auction sites or otherwise. Because I no longer have any affiliation with the company I could care less about their unethical no-internet rules. Supposedly these rules are put in place to "protect the brand image" but I think it may actually be more about making sure the market does not get a chance to set prices. If a consultant does not know what the product is really worth they are more likely to buy inventory from which they will never recoup their investment (like what happens to most who start with the business).

Anyway, here are the results. I have received $272 for the 10 completed auctions. It seems useful to look at this in a few different ways. First, the retail price for the items I sold is $1,048. That means the average eBay bidder got a 74% discount off of retail price (good for them, bad for me). The second way to look at these sales is to determine how much money I lost in the transaction. According to my records, I paid $568.30 for these items. That means that I lost $296 by purchasing over priced merchandise and selling it for much less. The final way to look at these sales is that I now have $272 that I didn't have yesterday. This is what actually matters to me now. I have put in a little effort and now I've got $272 cold hard cash.

I have started a second batch of eBay sales that will finish off the last of my inventory. I don't expect these auctions to pull in quite as much money but it should be more than pocket change. Also on my For Sale list will be some old books, DVDs, and CDs. I've noticed lately that my wife and I have nearly killed our media buying habits which at one time were pretty substantial and now nearly non-existent.

The final important task is to load up the car and haul these items off to the nearest Kinko's or UPS Store to get them out of my life. This too is a benefit because I will have less crap in my house. All-in-all this has been a win-win-win situation. I recommend everyone clean out the closets and create a little Found Money.

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Getting Smart About "Found Money"

Sometimes extra money, for which we have no plan, finds its way into our pocket. I call this unexpected money "found money" because it appears out of nowhere. To qualify as found money, the cash can not be something that we can predict ahead of time or can not be counted on to pay bills. The money might be an inheritance, a gift, or unexpected bonus. Found money can also be created by holding a garage sale, taking on extra hours, or starting a new revenue stream.

One of my goals for 2008 is to create an average of $333 of found money per month. I got the process started today by posting my old inventory from my failed MLM business on eBay. I put up the first 10 auctions that I expect to bring in a couple hundred dollars. I have also earmarked some old computer equipment and used books for sale over the next few weeks too. Nearly everyone has stuff taking up room in closets and attics that they never use. Turn it into found money and remove clutter from you life at the same time.

Once you have created the new cash it is time to put it to use. There is always the temptation to use unexpected windfalls to splurge or reward yourself with luxuries. I know that I am often guilty of this myself. Each year at Christmas my wife and I receive a rather substantial amount of cash gifts (from $500-1000), and we tend to use it to buy toys, gadgets, or indulgences. How do you spend money in these situations?

I found this great post from Advanced Personal Finance that deals with how people spend their found money. For me, I would tend to blow money that was a gift and invest money gained from cashed-in stock options. I am not certain why it seems natural for me to spend the money differently, but I am no psychologist. I plan to keep this in mind with future windfalls and strive to spend ALL of the money more responsibly. My plan is to reward myself with about 10% of the windfall by spending it on something fun I wouldn't otherwise buy and invest or pay off debt with the rest. I will use this particular found money from my eBay sales entirely to pay down debt.

Making $333 per month outside my normal earnings will be a big stretch for me this year, but if I succeed it will have a huge impact on my financial situation. It would be a total of $4,000 knocked off my debt in only a year for a little extra effort. Let me know how you plan to create found money this year, and where you will allocate your extra cash by leaving a comment.

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