Friday Wisdom: The Four “D”s

Dwight Eisenhower was an incredibly productive man. 34th president. Golfer. Artist. Five-star general. Supreme Commander of NATO. Came up with ideas that we still use today, including DARPA (which founded both NASA and the Internet) and the Interstate Highway System. And all in 8 years. The man got so much done it boggles my mind.

I read about his productivity system here, and thought I’d share it with you, because it’s very simple and doesn’t require any changes to your basic thinking. None of this getting up early or exercising or complicated systems to remember to use.

Instead, remember the four D’s.

Do
Decide
Delegate
Delete

The system classifies all tasks into one of these four D’s. Tasks get classified by two criteria: urgency and importance.

Urgency: Does this task have to be done right away? Or can it wait?
Importance: Does this task help me meet my goals as a person?

If a task is both urgent and important, Do it. Now.

If a task is important, but not urgent, Decide on a time to do it. Commit to that time.

If a task is urgent, but not important, Delegate it if you can. See if you can share that task with someone else. Most of us don’t have secretaries, but if it’s something like mowing the lawn, consider paying a neighborhood kid to do it.

If a task is not urgent and not important, Delete it. Don’t bother with it. Social media and television often fall into this category, but not always. Gossip about other people just about always does.

That’s it. Nothing complicated about it and nothing that tries to make you into someone you’re not. You decide what is important to you, and what is urgent, and build your priorities based on that.

Friday Wisdom: The Word “No”

No. It’s a powerful word. It makes people angry, makes them sad, upsets them, and makes them rail at you. If you’re not used to using it, it confuses people when you do.

It’s also essential to your sanity.

When I was growing up, saying “no” got me in trouble. It got me yelled at. I was about 12-13 the first time I dared tell Mom “no”. It was kind of stupid … I’d bought a pack of stickers with my allowance that I really liked. Mom liked them, too, and couldn’t find them anymore at the store. So she asked if she could have mine. I said “Mom, I paid for these with my own money and I really don’t want to give them up.” I kept the stickers, but paid for them with a screaming match that ended with both of us in tears.

I learned that Mom didn’t handle it well when she didn’t get her way. You gave her what she wanted or faced a whiny lecture, a spanking, or worst, a screaming fit. I learned to do what she wanted and never mind what I wanted, just to avoid getting yelled at. I’ve continued with this conditioning for a lot of years – I always caved quickly in any disagreement to avoid a fight – until I realized that I was so busy catering to everyone else’s wants and needs that I had no idea who I was. I was literally losing myself because I wasn’t saying “no” when “no” was what needed saying.

Your wants and needs are just as important as anyone else’s. Not more, not less. Equally so. What’s more, you don’t need a better reason to say “no” than “I don’t want to.” If someone is emotionally healthy and respects you as a human being, that will end the discussion. Any attempt to argue or plead or guilt you into it to get you to change your mind is manipulation. That’s toxic, and sometimes that toxicity can come from your own mind. Look for “I should/shouldn’t”, “what will X person/group think if I say no?”, and “have to” in your thinking, to decide whether you really want to do something or not. If you catch yourself thinking in any of the terms above, you don’t want to do whatever it is.

Learning to say “no” to the people I love was one of the hardest lessons I’ve ever had, but it’s freed my mind. Some of them still don’t handle it well, and that’s okay. They don’t have to like it. I can’t care for those I love if I can’t care for myself, and caring for myself sometimes means saying “no” to other people.

 

 

Compound Interest, Or Why You Should Start Investing Now

This is one of those things that a financial adviser tried to tell me at 25, and he was right.

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.

— Albert Einstein

Interest — the fee that is paid for the use of money — is a concept that most adults are familiar with. If you put your money in the bank at 3% interest, that means that the bank will pay you 3¢ for every dollar of yours in the bank, because they use that money for other purposes and track how much they owe you. The reverse is also the case – if you borrow money at 10% interest, for every dollar you borrow, you pay back a dollar and a dime.

That’s simple interest. Compound interest earns you more money still. Consider that bank account that earns 3% interest again, except that this time, it’s compounded quarterly. Every three months, the bank looks at how much you have in that account and deposits 3¢ for every dollar in there. Say you start with $100 in that account. Instead of paying you $3 directly in interest, they’ll put it in the account. Leave it in there for three months, and they’ll pay you 3¢ on the dollar on $103 instead, and you’ll have $106.09. Another three months with no change, and that becomes $109.27.

The reverse is also the case, if you borrow money. If you put $100 on a credit card at 10% interest, your minimum monthly payment might only be 2-3% of the balance. Let’s say we pay a minimum payment at 3% of the balance. The first month, you pay $3, but the interest is 10%. So interest is actually 10% of $97, or $9.70, and that gets added to the total amount you owe. Next month, you’ll owe $106.70.

Uh-oh.

I paid on it, but the balance went up?! That’s right. Compounding interest can make your balance go up, not down, if you only make minimum payments. That’s why you should always pay enough on any revolving debt to pay all of that month’s interest AND some of the principal. Doing so is the only way you can keep your balance going in the right direction. For installment loans, this math is already done for you in a process called amortization, and the interest on the loan is included in your calculated monthly payment. Credit cards don’t do that, though, and minimum payments can get you into real trouble as in the example above.

As an extreme example of the power of compounding, consider this question. Which would you rather have, a million dollars or a penny doubled daily for 30 days? Go do the math, I’ll wait. (The answer is under the cut tag at the bottom of this post.)

Here’s the trick — making that happen takes time. The more time you have, the more money you get. So, even if you have to start with $5 a week or $5 a month, the earlier you can start, the more time that money has to make more money for you.

The second reality is that banks don’t pay 3% interest. Most of them don’t even pay 1%. It’s garbage, really, because inflation typically runs 2-3% per year. If your money isn’t earning that much, you’re losing value over time. The deal a bank gives you for the use of your money is really crappy. For that reason, I recommend investing any money that you’re putting aside for two years or more – not just retirement, but things like college savings or a down payment on a house or a wedding. That money you put aside earns more money for you while you wait.

But can’t I lose it all in the stock market? you ask. Good question, and the answer is yes, you can, but you have to make some pretty serious investing mistakes for that to be likely over the long haul. I’ll talk about that in Monday’s post.

Continue reading “Compound Interest, Or Why You Should Start Investing Now”

Friday Wisdom: Know Your Stomping Grounds

When you move into a new area, you’re busy. New job, finding furniture, making new contacts, going out, maybe getting a car. There’s a thousand things to do, but I want you to add this one to your list: Learn your surroundings. Mark your home on a GPS or app, then spend a couple of hours getting lost in your new neighborhood. Take the back roads, not just the main roads. Note down the location of anything that looks interesting.

Why?

Because you never know when knowing the back roads in your area will come in handy. I’ve had to find my way from home to the mall to pick up my brother from work after a tornado ran through the neighborhood. I’m currently using a detour through the back roads to get to work because the main roadway to my work is so pitted with potholes that it’s causing accidents and flat tires and it’s too cold and wet to fix it. That road is for all intents and purposes unusable and will be until the weather warms up and the pavement can be torn out and re-laid. Accidents and road closures happen for a variety of reasons, and you’ll want to be able to get home/to work/to the grocery store no matter what’s gone wrong.

Because the best local stuff, the stuff that makes where you live cool and unique, won’t usually be on the main roads. That’s where you’ll find the malls and the big box stores and the chains, not the local fare. The local fare will be on side roads and hidden in tiny strip malls, and the local fare is usually far superior to what you’ll find in a big box store.

Because you’ll learn more about your neighbors and the kinds of people that live around you. Knowing your neighbors can indicate best times to shop, whether it’s a safe neighborhood, possible drug and gang activity, and can alert you to things that may be amiss or not as advertised. It might tell you whether borrowing a cup of sugar from your neighbor is a smart idea or not.

Take the time. You’ll be glad you did.

Co-tenancy Agreements And Why You Should Have One

If you’re just starting out on your own, chances are you’re sharing your living space with someone else. Whether it’s a blind pairing or two or more friends sharing a pad, living with roommates instead of Mom and Dad can be an exciting adventure.

The Problem With Roommates

The problem is that everyone’s a little different. Some people are raised in messier homes than others. Some people manage themselves and their things more carefully than others, and some people have a more relaxed attitude than others regarding what is “their” space. You’ll never truly know a person well until you’ve lived with them for a while, and too many roommates learn the hard way about someone they thought they knew well.

Conflicts among roommates can be draining and stressful, and can be expensive. These conflicts vary widely from situation to situation but most often cover the following areas:

  • Cleanliness
  • Personal property disputes
  • Payment of bills
  • Guests
  • Noise levels

If all of you signed the lease, getting rid of a problematic roommate without breaking your lease can be difficult and depends on your local laws. Landlords are notoriously reluctant to get involved in roommate disputes, and usually will only do so if the property is being damaged or other tenants file complaints about you. Furthermore, most often all co-tenants will be held “jointly and severally” responsible for payment of all amounts due, meaning that they don’t care who pays it, but you’re all in trouble if it doesn’t get paid.

Enter the Co-Tenancy Agreement

A co-tenancy agreement is a written agreement signed by all roommates in the house. It discusses division of chores, cleanliness expectations, house rules, who is responsible for paying bills, and more. RocketLawyer offers a free co-tenancy agreement form online,  but such agreements usually discuss these items:

  • Division of household chores and how often they are to be done
  • Where personal property is to be kept
  • Is smoking / drinking allowed in the space?
  • House rules on guests
  • Noise policies and quiet hours
  • Who is responsible for paying bills and when that person is to be paid by other residents
  • Use of common property and other people’s property (e.g. can everyone drink that milk or does it belong to someone?)
  • How violations of the agreement are to be handled and consequences for violating the agreement

A co-tenancy agreement allows roommates to resolve disputes by referring to the written agreement, and if properly executed and documented, gives roommates legal recourse in dealing with a problematic roommate.

Who Should Sign It?

Everybody who is a legal occupant of the space should sign it. Guests don’t need to, but typically the resident that brought them in is responsible for their presence and their behavior. All residents should discuss the terms and agree on them, then set it down in writing and sign it.

A Final Word

If you don’t know a prospective roommate, or don’t know them well, you should absolutely execute a co-tenancy agreement with them prior to moving in together. Even if you know someone well, you should consider one. Just in case.

What Should Be In A Renter’s Toolkit?

Renting has its advantages, especially if you move around a lot, switch jobs a lot, or just don’t like doing household maintenance. Someone else is responsible for the heavy-duty work that goes with owning property, so you don’t need to own as much stuff as you would if you owned your place.

But, even renters need some basic tools, and there are some things that if your lease allows you to do it yourself, you should because it will be faster and less hassle than calling maintenance to do it. You’ll probably also want to hang pictures and so forth, something that the majority of leases today allow you to do within reason.

So, what tools does a renter really need to own? These are the ones that I found useful in my years of renting.

  • Curve claw hammer — generally the smaller weights will suffice for a renter
  • Flat screwdriver #1, #2, #3
  • Philips screwdriver #1, #2
  • Level (there’s an app for that)
  • Picture-hanging kit (nails, screws, anchors)
  • Measuring tape 25′ (laser is fine)
  • Set of Allen wrenches / hex keys (generally both SAE and metric)
  • Box or utility knife
  • Spackle knife – you’ll have to fill in any holes you make in your walls before you leave!
  • A sturdy plastic or metal box to hold the lot

These items are nice to have but not required:

  • Impact driver or power drill
  • Screwdriver set
  • Drill bit set

As a renter, that’s really all you need. Homeowners will need much more, but that’s a topic for another post.

How To Navigate A Grocery Store

How you shop a grocery store depends on what you’re looking for, but no matter what your primary goal in beating the system is, there are tricks to it.

The first and most important rule is to remember that a grocery store’s layout is not by chance. Everything is carefully placed to get you to spend as much as possible on things you don’t need, preferably those items with the most profit margin, since grocery stores have a razor-thin profit margin. CheatSheet lists some of the many ways that grocery stores are carefully planned to get you to spend.

So, here are some tips to help you make the most of your hard-earned dollar in the grocery store.

1. Make A List And Check It Twice

Don’t walk into the grocery store without a grocery list. Before you leave, go through your shelves and your fridge, to see what you have and what you need. Keep an inventory of your pantry to make sure that any needed items get replenished.

This can be done either on paper or on your favorite phone app – of which there are many.

2. Eat Before You Go

Never, ever walk into a grocery store when you’re hungry. Eat out or grab something out of the vending machine at work if you have to. If you do, you’re almost sure to buy things you don’t need. A better choice is to plan a meal at home just before a grocery store trip – you’re shopping full and have already been in your kitchen recently, so you have a good idea (and hopefully have written down) what you need.

3. Coupons and Savings Cards

If your grocery store has a phone app, consider using it. Sure, it helps them, but it also helps you. At the very least, have and use the savings card for your favorite grocery store. You can save quite a bit.

That said, I’ll say this: don’t buy something you wouldn’t ordinarily buy just because it’s on sale. That means you’re falling for the trap of buying things you don’t need just because it looks like a sale. You’re still spending more money than you save in the end, no matter how good the deal.

4. Look Down, Look Down

A grocery store shelf has a plan to it. The stuff at eye level is the most expensive stuff, the stuff the grocery store wants you to buy most. The stuff directly below that is the next most expensive, then the stuff at the top. The best bargains will be on the bottom shelves, including the large bulk containers.

5. Unit Prices Rule

When shopping for food, always look at the unit price to determine the value you’re getting. The retail price tells you how much you’ll spend for that box, but the unit price tells you how much bang is in that buck you’re spending. Usually, the smaller the box, the less bang you’re getting for your buck. When comparing two brands, compare the unit price, not the retail price, because those prices are normalized against a standard unit.

5a. Bulk Isn’t Always A Bargain

Generally speaking, large containers mean you’re paying for more food and less packaging, so the unit prices will be better on large containers. However, if you buy such a large container that you’ll never use it all before it goes bad, you’re throwing your money away on the portion you can’t use. If you only use a small container of milk, don’t buy a big one, because you’ll waste most of it.

On things that don’t spoil, go for the bulk packaging so long as you have the space to store it! Bulk is a great way to get paper products and cleaning products.

6. Cheaper Isn’t Always Better

Yes, that store brand can is 20¢ cheaper than the national brand. Sometimes, that’s a really good deal, but only if the store brand is equivalent quality to the national brand. It isn’t, always. The reality is that store brands can be very hit-or-miss in quality, and an item that is poor quality will need to be doubled up or replaced more frequently – and if that is true, are you really saving money?

Be cautious with off-brands. Try different products in the off-brand, but you’ll find sometimes that the off-brands don’t cut it and you’re actually saving money by spending a bit more on a high-quality product that lasts longer or that you can use less of to get the same effect. My experience tells me that you’re almost always better off with the national brand for these products:

  • Trash bags
  • Toilet paper
  • Paper towels
  • Paper plates
  • Canned peas (off-brand frozen veggies are usually fine)
  • Dishwashing detergent
  • Laundry detergent

7. About Display Placement

You know those displays of various things on the end of every aisle? Those are called end-cap displays, and those are items that the store is being paid to set out in a special place, or things that they want to sell more of. If it’s not on your list, skip it.

Also, have you ever noticed that the candy and/or cookie aisle almost always coincides with some essential that every parent needs? I’ve seen candy across the aisle from peanut butter, bread, fruit juice, and even diapers. Dirty pool, if you ask me – that’s a great way to get a harassed mother shopping with her kids a chorus of screams for candy. This isn’t an accident. As I said above, grocery stores are carefully planned by psychological and marketing experts to encourage you to make impulse purchases. Consider not having the kids (or your SO/spouse) in tow when you grocery shop to avoid this trick.

8. Don’t Hesitate To Ask

Grocery stores are forever moving things around on shelves and reorganizing the store. They also have a nasty habit of placing a key item that everyone buys somewhere that no sane person would ever think to look for it. This behavior is on purpose — it’s intended to force otherwise savvy and organized shoppers to slow down, hunt the shelves, and look at everything on display in hopes of encouraging one or more impulse purchases.

Don’t waste your time or money on this ploy. Find a clerk and ask them where the item you want is to be found. They know the store very well usually and will help you find it without any further fuss.

9. Where The Goodies Are

This is a tip for the health-conscious shoppers. If you’re trying to eat better, the good stuff is around the perimeter of the store. Frozen, dairy, meats, produce — all these items are to be found around the edges of the store. There are a few items in the middle that you’ll want, but by and large, the middle of the store is where you’ll find the junk. Stay to the edges, with a few forays for specific items, and you’ll shop more health-consciously.

One caution, though — the flowers and the baked goods near the door are designed to bombard your senses, so focus on your list and ignore the rest.

10. Groceries Can Be Had Online, Too

There are a number of grocery delivery and pickup services out there, where you can shop online, make your picks from the comfort of your couch, and have it brought to your door for a nominal delivery fee. They don’t always offer all the things you buy, though, so I don’t find that it works for me, but if you’re busy, it can be a godsend.

It can also keep you out of a lot of the head games played by the grocery stores, so if you’re tired, it’s an appealing choice.

11. Don’t Use A Bigger Basket Than You Need

When you have an empty space, the temptation is to fill it. The bigger basket you use, the more you’re tempted to buy. If you’re only going in for a few items, use the hand-carry basket, or seek out the smaller half-carts.

A Final Word

A grocery store can be a minefield of budget-busting choices. Shop mindfully and don’t let yourself get sucked into the head games, and you’ll eat well for less than eating out would cost you.