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wreath1

Every once in a while I like to profile a small business on my personal finance blog. Not only do these small business case studies provide inspiration for other prospective entrepreneurs, but the stories behind them are often very interesting as well.

Winter Wreaths, Inc.

Today I’d like to introduce you to Winter Wreaths, Inc., in Franklin, ME. Winter Wreaths Inc. is a small family run business that decorates and ships traditional and authentic Maine Christmas wreaths and Christmas centerpieces across the United States and beyond.

Winter Wreaths, Inc. owner Lisa inspects a fresh delivery of reindeer moss.

Winter Wreaths, Inc. owner Lisa inspects a fresh delivery of reindeer moss.

Owners Mark and Lisa Herrington (who happen to be my aunt and uncle) purchased the business earlier this year and have been very busy getting everything together for this winter’s Christmas wreath ordering season. I asked my aunt about her decision to buy a small business.

“I always wanted to do my own business but couldn’t figure out what to make or do that might make a bit of income, plus I was always unsure about the book keeping end of things. This opportunity came up and it felt like the right thing to do to help my dream along.”

In addition to shipping authentic Maine balsam fir Christmas wreaths, Winter Wreaths offers a variety of Christmas table centerpieces, candles, greenery and jams.

A Legacy of Entrepreneurial Spirit

order traditional maine authentic christmas wreaths

One interesting thing about Winter Wreaths Inc. is that my aunt and uncle operate it out of my great-great-grandparent’s house which has remained in our family for 6 generations.

100 years ago my great-great grandparents operated a store on the property (see photo comparisons above). The old store is now gone, but that same entrepreneurial spirit continues through my aunt and uncle’s Maine Christmas wreath business.

My Aunt Lisa sums it up, “It has been nice to be in this house again. Franklin, ME is a little town but people are always stopping by to see what is going on. It feels like old times .”

Indeed, there is now quite a bit of activity at the workshop and it has brought new life and excitement to what many consider the “downtown” area of this historic and quaint coastal New England town.

workshop

The house’s barn (which once held horses and cows) has been converted into a charming store front and workshop that is just overflowing with character.

winter wreath barn

All wreaths and centerpieces are hand made right here in Maine by experienced local craftsmen and feature locally sourced decorations (reindeer moss, Indian berries, pine cones, chestnuts and a hand-tied red velvet bow).

The previous owners of Winter Wreaths, Inc. are still very active in the business helping the new owners along.

“It also helps that the Marshalls (previous owners) are so helpful and sticking with us through this first year. Mary and I have reversed roles, she now decorates wreaths and I do the book keeping! She’s here and I can ask her for help whenever I need to.”

When it comes to ordering traditional Maine-made holiday Christmas wreaths and decorations, Winter Wreaths, Inc has you covered! Buy your own authentic “Made in Maine” Christmas wreath or decorative centerpiece today! As an added bonus, most wreaths come with a complimentary jar of locally made blueberry jam (ask for details)!

uncle markShipped to Your Door!: Can’t make it to Franklin, ME? Don’t worry, Winter Wreaths, Inc. offers shipping on every order (click here for pricing and order form)! Here’s my uncle Mark labeling one of the season’s first Christmas wreaths for shipment! But don’t worry, there’s a whole rack of wreaths behind him, maybe one of them is for you! Check out Winter Wreaths’s Website or call 207-565-3593 and order a Christmas wreath or centerpiece today! Maine Christmas wreaths and centerpieces also make great holiday gifts for family, friends and coworkers!

Order Your Official Maine Winter Wreath Today!

Order an authentic “made in Maine” balsam fir Christmas wreath or centerpiece today to add warmth and charm to your home this holiday season. You can visit my Aunt and Uncle’s website or facebook page or you can call them directly at 207-565-3593.

Tell them their nephew Ben sent you!!!

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A lot of the articles on my personal finance blog deal exclusively with how to save money. Unfortunately, I often fail to look at the “personal” part of personal finance and focus more on the finance side (maybe MBA graduates shouldn’t be personal finance bloggers!).

The truth is, there’s a lot more to personal finance than just saving money. If you want to achieve a healthy financial balance between spending and saving money, its helpful to understand this concept.

For instance, take a look at my family’s decision to buy a boat this year.

We could have saved money renting a boat, but the convenience of owning our own boat led us to purchase our own boat.

We could have saved money by continuing to rent boats, but the convenience of owning our own boat been worth much more to our family. Here’s are Grady White sitting in our slip at the marina.

I’ve written a variety of personal finance articles over the years making the case that it almost always makes sense to rent a boat rather than buy a boat. Not only can boats be very expensive, they can also be very expensive to maintain.

Yes it’s true that we saved a significant amount of money renting a boat for a few years (vs. buying a boat), but now that we’ve experience owning our own boat for a few months, I’m beginning to have a clearer appreciation for the “personal” side of personal finance.

Our Personal Finance Decision to Buy a Boat:

In the case of whether or not we should buy a boat, the biggest factor we looked at was convenience.

grady white kidsRenting a boat wasn’t difficult to do, but it usually meant driving a long way to get to a particular marina that rented boats.

On the nicest days, there was a very limited selection of boats available to rent (if any at all). Then there was the uncertainty of knowing how to operate the boat and going through the orientation process, signing all the paperwork, loading supplies, and not being familiar with the cruising grounds or where to buy fuel, etc.

Being able to go on a spontaneous boat ride and not have to worry about any of the drawbacks listed above is awesome.

This “awesomeness” has a value to us and the value of this “awesomeness” is what made up the “personal” side of our “personal finance” decision to buy a boat.

Whether you’re buying a boat, deciding between renting or buying a ski condo, or determining whether or not to buy a new or used car, don’t lose sight of the “personal” side of your personal finance decision. It’s too easy to get burned out on the “finance” side if you don’t properly value the “personal” side of the personal finance equation.

It’s not always just about saving money!

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The Best Way to Brew Coffee

From percolators, French presses and traditional drip coffee makers to espresso machines, Keurig K-Cups and Aeropress coffee presses, there are many different ways to brew a cup of coffee. I’ll review them all and determine once and for all, which method brews the best tasting cup of coffee (at least in my opinion)!

When it comes to running a blog (personal finance or otherwise), the experts say you should stick with what you know. So in addition to my regular blog articles about paying down debt and investing, I thought it would be fun to spend a little time talking about the best way to brew a great tasting cup of coffee.

After all, you can save a ton of money if you learn how to make a quality cup of coffee yourself (see David Bach’s Latte Factor).

So what makes me an expert on brewing a cup of coffee you ask?

Well, as a commercial ship captain, coffee has become a very essential part of my professional life. Anyone who’s ever spent time working aboard a ship will tell you that there’s two things you should never run out of at sea; the first being toilet paper and the second being COFFEE.

Working long and odd hours tends to grow a person’s dependence on coffee, and with little other recreation at sea, there always tends to be some lively discussions about the various methods of brewing the best tasting cup of coffee.

caribbean coffee ship

Here’s a photo of my ship docking for supplies in Curacao on October 31st, 2013.

Combine this with the persnickety captains I’ve had the “pleasure” of working with over the last two decades (who get really upset if their coffee isn’t prepared “just the right way”), and you’ve got a ripe environment for developing an informed opinion and pallet for the perfect cup of coffee (and the best way to brew it).

1st Place: French Press Coffee Brewers

best french press brewer reviewsMy favorite methods of brewing coffee is via a “French Press” coffee pot. There are many coffee snobs, coffee purist and coffee aficionados who contend that French Press pots are the best way to brew coffee. Based on my own experiences (and those of my shipmates) we agree that the French Press method of brewing coffee is an excellent way to brew a rich, smooth and full bodied cup of coffee.

How to brew coffee with a French Press:

Advantages of French Press Coffee Pots: French Press coffee pots always receive the best reviews. While a lot of this has to do with tradition and the long standing use of French Presses in high end coffee shops, the truth is you get a consistent full bodied and rich cup of coffee (if you know what you’re doing). French Press coffee makers also give the user complete control over the coffee process from ensuring the water is the correct temperature to making sure the coffee grounds are steeped (brewed) the correct amount of time in the brewing water. If you know what you’re doing, you simply can’t beat a fresh cup of coffee brewed in a French Press. Another great “perk” of a French Press is they are relatively inexpensive (less than $40 for a high quality one) and don’t require any electricity (provided you have access to hot water).

Disadvantages of Brewing Coffee with a French Press: The biggest disadvantage of brewing coffee with a French Press is that it takes a little practice to get used to. Like the Aerobie AeroPress (in second place below), there are a lot of variables that go into making a consistent cup of delicious full bodied coffee when made in such a “hands on” way. There is a lot of work that goes into making a cup of coffee brewed with a French Press the results are definitely worth it.

Where to Buy a French Press Pot: We’ve found Bodum French press coffee brewers to offer the best value and quality, you can order Bodum French press brews through Peet’s Coffee & Tea Website. While you’re buying things from Peet’s website, you might as well order some of their amazing Major Dickason’s roasted coffee (Major Dickason is one of our crews’ favorite coffee).

2nd Place: AeroPress Coffee Press and Espresso Brewing System

aeropress review best price Remember how awesome and revolutionary those Aerobie Flying Rings were when they came out in the 1980’s? They were far superior to other flying disks and Frisbees available and they totally disrupted the market for outdoor throwing sports. Believe it or not, this same company “Aerobie” is at it again with the introduction of their Aerobie AeroPress coffee brewer and espresso maker (I know, it’s super weird, right?). One of the officers on my ship introduced me to the Aeropress coffee brewing system a year or so ago and it has quickly become one of my favorite ways to brew coffee.

Advantages of the AeroPress Coffee and Espresso Maker: Reviews for the AeroPress coffee have been very positive. Overall, you’re simply not going to find a better value in terms of being able to brew a high quality cup of coffee. For less than $30 the AeroPress offers its user a very intimate connection to the coffee brewing process allowing for a very strong and rich cup of coffee (like a percolator) but creating a very smooth finish that stays true to the nuances found in different types of coffee beans and coffee roasts. It may not be the best method for busy parents rushing to get ready for work and get the kids off to school, but if you have a few extra minutes in your day (and you really enjoy coffee) I bet you’re going to love the Aeropress system from Aerobie.

Disadvantages of the AeroPess Coffee and Espresso System: While the AeroPress scores high reviews all the way around, it is a little more labor intensive than some of the other methods of brewing coffee. From ensuring you have properly grounded beans and heating up the water, to stirring in the coffee grounds and pressing the brewed coffee through the filter, the average cup takes around 8 minutes to brew properly. Also, if you’re not paying close attention, it is relatively easy to side load the AeroPress as you’re pressing it through and spilling the hot coffee all over the place (I’ve done this on more than one occasion and it wasn’t pretty!).

How to Make Amazing Iced Coffee at Home: With the AeroPress coffee brewer you can make an exceptionally tasty cup of iced coffee by doubling the coffee you put in the Aeropress brewer and then squeezing the coffee out over a full glass of ice. The concentrated coffee melts the ice and dilutes out the beverage to a very delicious and smooth iced coffee!

Best Place to Buy the AeroPress Coffee System: Not only does Peet’s Coffee & Tea Website have great deals on the best rated French Press coffee brewers, they also have exclusive deals and pricing on AeroPress Coffee Brewers too! (YES, YES, we love our Pete’s coffee around here!). While you’re buying things from Peet’s website, you might as well order some of their amazing Major Dickason’s roasted coffee (Major Dickason is one of our crews’ favorite coffee).  If you really want to impress your friends you can buy some Jamaica Blue Mountain Coffee at $44.95 per 1/2 Pound.

3rd Place: Brewing Coffee in a Percolator:

best coffee perculator reviews Coffee perculators have been my parents preferred method of brewing coffee since long before I was born. As a matter of fact, they received two identical coffee perculators as wedding gifts nearly 45 years ago and it wasn’t until just recently that the first of the two coffee perculators failed. Fortunately, my grandmother had carefully stored the second perculator in her home and after presenting it to my parents as a replacement it fired right up after 4 decades laying dormant!

Advantages of Brewing Coffee in a Percualtor: In addition to making a very cool noise as the coffee is brewing and completely inundating the house with a fragrant coffee smell, coffee perculators brew a very strong and rich cup of coffee compared to standard drip coffee machines. If my parent’s experience is any indication, coffee perculators seem to have an incredibly long service life as well.

Disadvantages of Brewing Coffee in a Perculator: My biggest complaint about brewing coffee in a perculator is the fact that the coffee is super hot (near boiling) when it is poured. If you’re a wimp like me this means waiting a while for the coffee to cool off before enjoying. Another issue I’ve noticed brewing coffee with a perculator is that it masks the nuances between different types of coffee. What I mean by this is that even though perculators brew a great cup of coffee, the perculation process makes the differences between a dark Italian vs a more medium roast less perceptible.

Where to Buy Coffee Perculators: It’s not very often that you’ll see coffee percolators for sale in department stores anymore, however, you can still order them online through most major on line retailers. Buy a top rated Presto Percolator at Walmart.com!

4th Place: Traditional Style Drip Coffee Machines

best home drip coffee machine reviews Anyone who’s ever enjoyed a cup of coffee (especially in the USA) has almost certainly had coffee brewed using the method. In fact, there is more coffee brewed in the US using standard drip style coffee machines than all other coffee brewing methods combined.

Advantages of Drip Coffee Machines: The biggest advantage of drip style coffee machines is their convenience and ease of use and the overall quality of the coffee’s flavor (much smoother than a percolator style coffee brewer). If you buy a drip coffee machine with a timer, you can literally set it and forget it and wake up the next morning to a fresh pot of coffee. Another advantages of drip coffee machines is that you can easily adjust the strength of the coffee by adding more or less coffee to the coffee filter. Drip coffee machines are also very inexpensive compared to some of the more exotic methods for brewing coffee.

Disadvantage of Drip Coffee Machines: One disadvantages of Drip Coffee Machines (whether you’re using a cheap Black and Decker Model or a Commercial Grade “Bunn” Model) is that it can very hard to brew a consistent cup of coffee. Even if you measure out the coffee exactly the same every time, you have no control how the actual hot water interfaces with the coffee in the filter chamber which helps create these flavor inconsistencies. Although drip coffee machines also allow users to brew up to 12 cups of coffee or more, the “shelf life” of the coffee is very short (especially sitting on a hot burner) and quickly starts to degrade the quality and flavor of the coffee after 10 or 15 minutes (you might not be able to tell, but I can).

Where to Buy the Best Drip Coffee Machines: I recommend the Hamilton Beach BrewStation Summit Available at Walmart.com today at a Special Roll Back Price!

5th Place: Keurig K-Cup Single Serve Coffee Brewing Machines

Best Deal Keurig K-Cup Machine Reviews Introduced over 10 years ago, Keurig K-Cup single serve coffee brewers gained wide acceptance as a quick and convenient way to brew a high quality single serving of coffee. Although they originally showed up in commercial applications (such as office building break rooms, convenience stores and waiting rooms) as the price came down more Keurig K-Cup coffee brewers were purchased for individual use in homes and apartments across the country.

Advantages of Brewing Coffee with a Keurig K-Cup Machine: Keurig K-Cup coffee brewers are known for brewing a very consistent cup of coffee. In addition to being super convenient (i.e. quick and easy), almost all the major coffee companies and coffee brands offer their coffee in K-Cup compatible packaging. In fact, Keurig’s patent on their K-Cup technology expired in 2012 which made it possible for virtually any company to package and sell Keurig compatible coffee packs that will work in Keurig brewing machines. This has also led to a slight decrease in price for Keurig compatible coffee (although you’re still looking at between $0.60 and $1.00 per cup when brewed at home).

Disadvantages of Brewing Coffee with a Keurig K-Cup Machine: There are several cons against the Keurig K-Cup coffee brewing system that has prevented it from scoring higher on my list. First, the coffee comes out a little bit too weak for my taste. Second, although the expired patent and increased competition for Keurig K-Cup brewers market have lowered prices a little bit, at nearly $1.00 a cup for brewing at home, the Keurig system for brewing coffee is one of the most expensive ways to brew your own cup of coffee. Finally, but no less important, Keurig K-Cups have the perception of creating an unnecessary amount of waste in the form of the one time use cups (although the introduction of reusable K-Cup containers has helped reduce this negative association).

Best Place to Buy Keurig K-Cup Coffee Brewers: Order the highly reviewed Keurig Elite K40 at Walmart.com Today!

6th Place: Brewing Coffee Using an Espresso Machine

best home espresso machine gaggia classic review Perhaps the most “hardcore” way of making a cup of great coffee is by using an espresso machine. Although espresso machines are a little bit of an overkill when it comes to making a simple straightforward cup of coffee (espresso machines are really only needed when making fancy European coffee drinks like Lattes and Cappuccinos) , they can be used to brew a great tasting cup of coffee.

Advantages of Brewing Coffee with an Espresso Machine: Assuming you have access to a quality espresso machine, the actual process of brewing a cup of coffee using an espresso machine is actually very easy. The process actually looks and sounds very cool too and is a great way to “impress” your friends and/or coworkers. The flavor of coffee “brewed” with an espresso machine (after it has been diluted down to the consistency of coffee) is very “creamy” and smooth although not as rich and strong as with a French Press or AeroPress.

Disadvantages of Brewing Coffee with an Espresso Machine: Because you’re using an espresso maker (high pressure steam is forced through a “puck” of compacted coffee and filtered out) what you end up with is not a cup of coffee but a shot highly concentrated coffee (i.e. espresso). In order to tone the mixture down so it is more consistent with a traditional cup of coffee, it will need to be “diluted” with water. Some espresso machines will actually do this for you (the one we have on our ship will), but most of the time you’ll need to adjust the additional water content yourself. Not only does this defeat the whole purpose of having an espresso machine to begin with (in my opinion) but it also gives the coffee a slightly diluted taste no matter how much or how little water you used to dilute it.

Where to Buy an Espresso Machine: Buy the highly rated Mr. Coffee Cafe Barista Espresso Maker at Walmart.com!

More Tips for Brewing the Best Cup of Coffee: Grinding Coffee

I think we all agree that nothing beats brewing coffee with freshly ground coffee beans. But did you know the type of grinder you use can significantly affect the taste and quality of your coffee?

That’s right! If you do grind your own coffee, here are some tips to make sure you’re getting the best cup of coffee and the best value for your money.

Coffee Grinders: Blade vs. Burr:

best burr coffee grinder

Most coffee experts (including myself) agree that Burr coffee grinders are the best grinders for grinding coffee. Coffee snobs are quick to point out that blade style coffee grinders simply cut the same beans over and over again and create a very inconsistent blend of coffee grinds (from course coffee grinds to powdery coffee grinds).

TIP for Grinding Coffee: Try experimenting with different coffee grind settings to see if you can tell the difference!

Blade coffee grinds also generate a lot of static electricity which can affect the brewing process and flavor of your coffee not to mention that blade grinders are very load and will wake up your kids early in the morning (not fun, trust me!).

Burr coffee grinders are better than blade grinders because they grind out more consistent coffee grounds. A good quality Burr grinder also offers multiple grind settings to adjust the size of the coffee grounds. Burr coffee grinders are also much quieter vs blade coffee grinders and are less likely to wake up your kids or your wife or girlfriend (or both!!!). Burr coffee grinders also produce less static electricity in the grinding process.

Where to Buy a Good Quality Burr Grinder: The Cuisinart Supreme Grind Automatic Coffee Grinder is an excellent choice at only $59 order today through Peet’s Coffee & Tea Website!

I hope you’ve enjoyed my comparison tests of the best way to make a cup of coffee, and yes, please feel free to visit our sponsor (Pete’s Coffee) below!

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

A recent advertisement by esurance (by Allstate) claims that one of the reasons they are able to save you money on car insurance is because they have a fleet of Ford Fusion hybrid claims cars.

how does esurance save you money

I certainly commend esurance for being socially responsible in their use of hybrid vehicles to reduce their carbon footprint. Indeed it is a great thing and I don’t disagree with their statement that they will save close to 69,000 gallons of gas by 2017 with their fleet of hybrid vehicles.

However, I do take issue with their implication that hybrid vehicles actually result in a net savings that is passed passed on to consumers. As I explained in a previous article, there are few situations where it makes sense from a cost savings and personal finance point of view to buy a hybrid vehicle. The math simply doesn’t add up. So how does esurance’s costing savings claim stack up?

Here’s a screen shot from my hybrid fuel savings calculator I created for that article using the two vehicles.

According to esurance's claim that they save money driving a fleet of hybrid claims vehicles, the average hybrid car would need to be driven for 5 years (150,000 miles) to reach the break even mark.

According to esurance’s claim that they save money driving a fleet of hybrid claims vehicles, the average hybrid car would need to be driven for 5 years (150,000 miles) to reach the break even mark.

As you can see in the graphic above, the average esurance vehicle would need to be driven for 150,000 miles before you would get to the break even point when comparing a Ford Fusion S Hybrid versus a conventionally powered Ford Fusion S.

Having seen some of the older Progressive claims vehicles still on the road (10 year old Ford Escapes for example) and recognizing how many miles claims agents drive each year (insurance agents I’ve spoken with average at least 30,000 mile per year), it is very possible that esurance might actually see a slight cost savings by operating a fleet of hybrid vehicles. Whether or not these savings are actually passed on to consumers is hard to gauge.

I guess esurance consumers will have to wait at least 5 years to find out!

Just remember, switching to a hybrid vehicle is a very socially responsible decision to make. Just make sure you fully understand the financial implications of buying a hybrid vehicle and don’t by into the hype that you’ll ALWAYS save money when buying a hybrid vehicle.

For more information on hybrid vehicle cost savings (and a copy of my fuel savings mpg calculator) check out my article Vehicle Fuel Efficiency MPG Savings Calculator!

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

volvo v60 polestar review

I love Volvos! I’m not exactly sure when my “infatuation” started (or why for that matter), but when the canary yellow limited edition Volvo 850 T-5R station wagon was released in 1995 my affinity for Volvo was set and I knew that someday I would own that car!

volvo t-5r vs polestar

To me, the car was perfect. It was a high performance sports car built with the practicality of a station wagon. With the exception of it’s canary yellow paint job, it was a true “sleeper” car (meaning you could crush just about any other car at the stop light and they’d never know what hit them) and it had Volvo’s reputation for safety and bullet proof reliability (at the time) backing it up as well.

Unfortunately for me, I was only 17 years old at the time and that particular model only ended up being manufactured that one year (1995).

A few years later I did buy a used 1996 Volvo 854 Turbo (which was pretty fast in its own right) but it never quite captured my excitement and enthusiasm the way the 850 T-5R had.

volvo 854 turbo

In 2002 (at the urging of my wife) we bought a brand new silver 2002 Volvo S40 1.9 Turbo because it was “sportier” (tho it was nowhere near as fast as the 854 Turbo) and more importantly, it was easier to drive around in the big city than the larger 854 sedan (we were living in Boston at the time). While we also loved our Volvo S40, it too did not evoke the same enthusiasm and passion as that first Volvo T-5R I saw in 1995.

The following year (2003) my wife and I realized we had gotten a little too deep into consumer debt and committed to paying off our debt, buying a house and starting a family. There were not going to be any new Volvos for us for a long time.

Through it all our 2002 Volvo became an integral part of our family and after 13 Years, 180,000 miles and 3 kids, the car is still going strong today (although it is really starting to show its age being a New England car) and has solidified Volvo’s place in our family.

2002 volvo s40 bike rack ski rack

Here’s our 2002 Volvo S40 that we bought new 13 years ago. It is still going strong after 180,000 miles, 3 kids and whole lot of fun! But it still isn’t a T-5R!

With the car pushing into its 14th year of existence and our family’s “need” for a car suitable of transporting 5 people (2 Adults and 3 Kids) my wife and I are starting to seriously look at a new or “newer” car to replace our old 2002 S40.

As a personal finance blogger, and as a person who has struggled with car buyer’s remorse in the past (not for our Volvos, but for a leased Toyota 4 Runner), I really wanted to find an inexpensive used Volvo (or similar) with low miles.  I wanted to make a smart financial decision and buy a new car for the right reasons.

And Then This Thing Shows Up at My Local Volvo Dealership…

volvo v60 polestar review

Ladies and Gentlemen, say hello to Volvo’s new Limited Edition V60 Polestar Edition. Channeling the same understated sporty elegance as Volvo’s first “supercar” (the T-5R), the Volvo V60 Polestar Edition is a grocery getting rocket ship worthy of any parent’s longing. Sure, Volvo has released “R” editions and “R-Design” editions over the years, but there’s just something about this new Polestar edition that makes me want to have it NOW!

The car wasn’t even supposed to ever come to Maine. There were only a limited number of them shipped to the US and I was confident that they would end up in the warmer states this time of year. Especially with winter setting in. But as fate would have it, there my “new” dream car was staring me right in the face as I drove past the local Volvo dealership on my way back from my daughter’s gymnastics class.

My wife might say I’m going through a midlife crisis a few years early (I’m 37), but the car just seems so perfect the same way the T-5R did 20 years ago.

But with a sticker price MSRP over $51,000 it just wouldn’t be a smart financial move for us even if the banks did approve us for a loan. Especially where we’re still trying to pay off our mortgage.

Should I Buy my Dream Car?

As tempting as it is to pull the trigger on this awesome car, the reality is it just wouldn’t be a smart financial move (especially now with three young kids).

To help me think rationally and not make such an impulsive decision to buy an expensive car I may soon regret, it helps to put things in perspective.

8 Ways to Talk Yourself Out of Buying a New Car:

1) If my mortgage was paid off, would I borrow money against my house to buy this car? This alternative way of looking at financial purchases was first introduced to me back in 2003 when my family first got serious about our personal finances. Even if I had the money to pay cash for this car (which I don’t), I wouldn’t in a million years borrow money against my house to buy this car that my kids are going to do nothing buy destroy with the pre-packaged applesauce “squeezies”, left over snack bags of rotten grapes and pretzel crumbs.

2) If I did finance the car, am I going to be as excited paying $800+ per month a few years down the road after the excitement of the “new car” is gone? Most likely I’m not going to be.

3) Would I rather take the difference saved by buying a slightly used car and put it towards my children’s college savings or pay off the remainder of our mortgage balance? Most likely I would (although it sure would be a lot of fun driving that car around).

4) Do I really need to buy a $50,000 sports car at the beginning of a cold Maine winter and be afraid to drive it anywhere and have it covered in the nasty salty brine de-icing chemicals that are sprayed on Maine highways? ABSOLUTELY NOT!

5) Do I really want to worry about the kids bumping into the car with their PowerWheels, Bikes and Razor Scooters while the car is parked in our driveway or in our garage? Probably not!

6) Do I really need to be behind the wheel of a car that can go 160 mph (electronically limited) and the potential speeding tickets AND JAIL TIME that come with that? Nope, not me!

7) Do I really want to deal with the ridiculous cost of maintaining a high performance sports car (especially one from Sweden)?  Nope; I know all too well about how much it costs to “properly” maintain even a standard edition Volvo. Polestar vehicles are going to be even more expensive to maintain due to the limited availability and exclusivity of the one of a kind parts.

8) Do I really want to take a hit on the depreciation of the vehicle as soon as I drive it off the lot (and every year thereafter)? Don’t think depreciation is a big factor on high performance European Automobiles? Try comparing the price of a new BMW M3 or Audi S4 to a model that is 3 or 4 years old. Or you can read my article on the shocking cost of buying a new car vs. buying a used one.

I really love this car and I’m super happy for anyone that can reasonably afford to buy their dream car without making financial sacrifices in other areas of their lives. For me though, taking a little while to think about the decision to buy a new car vs. acting on solely on what I “wanted” has likely saved my tens of thousands of dollars down the road.

But rest assured that the dream is not lost. I still believe that someday down the road, I’ll be able to pick up a slightly used version of this car at a steep discount. And who knows, maybe I’ll even find a rare Volvo T-5R to park next to it!

Hopefully my experience will help you in your decision as well!

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

PayHip Review: How I Sell My eBooks Online

Are you thinking of writing an eBook and selling it online?

After researching the best way to sell my new eBook online last month, I quickly became overwhelmed with the options available.  There were some reviews of reputable eBook distribution sites, but I wanted to add my own to help take away some of the frustration I had when trying to find the easiest and most inexpensive way of selling my eBook online.

paperbackstack_550x498

Although I’ve written hundreds of blog posts, I had never actually taken the next step and self-published an eBook with the intention of selling it.

My only real requirements were for people to go to a reputable site, purchase the book, and then be able to download the book immediately after purchase.

Some sites wanted to charge a flat monthly fee for selling eBooks, others charged a commission for each eBook or unit sold. Other eBook selling sites wanted to charge me both a monthly fee and a commission for each item sold (since this was my first time writing and selling an eBook, I wanted something that was “low risk”).

PayHip is a Legit eBook Selling Option:

After testing several different sites, I finally settled on PayHip to handle the processing of my eBook sales. PayHip is free to join and you only have to pay a small commission (5%) if your book sells. PayHip also gives you the option of easily selling other types of electronic media as well including Music, Video, Excel Spreadsheets, etc.

After the successful launch of my first eBook, I’m in the process of writing “premium” versions of my free Debt Snowball Calculator and Rental Property Investment Analysis Calculator programs in Excel to experiment with selling them online with PayHip as well.

The process of setting up an account and uploading my eBook file was easy. Registration literally took about 5 minutes to complete including setting up a brief author bio and uploading a cover photo of my eBook.

Tip: A great “FREE” resource for creating your own professional eBook cover yourself is through www.myecovergenerator.com. This is what I used to create a professional looking cover for my eBook as pictured above.

PayHip links directly through your PayPal account (assuming you have one, if not a PayPal account is also relatively easy to set up) so people buying your book can feel secure that their payment information is handled safely.

Once the sale is complete, the proceeds from your book sale will be immediately available in your PayPal account (minus the small commision fee) where it can then be transfered to your checking account, etc.

If you have any additional questions about selling your eBook through PayHip please leave them in the comments below and I will try to get back to you as quickly as possible.

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

It’s been 10 years since my wife and I decided to pay off our debt and live debt free (with the exception of borrowing money to buy our first home). While most readers of my personal finance blog have been overwhelmingly supportive of our debt free success story, there have been a few people who have said living debt free is NOT a good idea and will negatively affect our 3 Official FICO Scores from Experian, TransUnion and Equifax.

If you’re a fan of personal finance expert Dave Ramsey, your immediate response is probably something like “If I’m living debt free, who cares what my credit score is?“.

The truth, however, is that your FICO Scores are used for a lot more than just determining your credit worthiness and how much money you can borrow. FICO Scores are considered when you submit rental applications, apply for automobile or homeowners insurance, and even as part of your background check when applying for a job. A high FICO score is generally considered as a sign of responsibility and trustworthiness.

So how has paying off our debt and living debt free actually affected my 3 FICO credit scores?  You might be surprised!

When we started our financial journey of paying off our debt in 2004 (after I was declined a loan for buying a used motorcycle), my official FICO credit score (I can’t remember which of the 3 FICO scores my bank used at the time) was 610.  10 years later of living debt free, paying down debt and not borrowing money (with the exception of our mortgage) my 3 FICO Credit Scores from Equifax, Experian and TransUnion are 828, 828 and 827 respectively (as seen in the screen shot of the MyFico FICO Score Report Page below:

FICO Score and debt

To help illustrate the relationship between paying off our debt and how it affected our credit scores, I’ve created the following graph which compares our debt level vs. credit score over the last 10 years:

Debt Reduction vs. Credit Score Over 10 Years

paying off debt vs affect on fico credit scores

As you can see from the two sequenced graphs above, as we paid off our non-mortgage consumer debt our average FICO credit score continued to rise. Even after we paid off our debt, and didn’t acquire any new debt, our credit scores continued to rise.

While each individual situation is different, the biggest reasons I believe our FICO scores improved significantly after paying off our non-mortgage consumer debt (credit cards, consumer loans, auto/car loans, student loans, motorcycle loans, personal loans and furniture loans) are as follows.

1) As we paid off our credit cards, the ratio of available credit to our actual balance improved. Experts suggest that the less percentage of available credit you use on your credit cards, the more positive your credit score will be.

2) Having an additional 10 years of credit history also helped improved our credit score. According to myFICO (the only source for your 3 official FICO credit scores from Equifax, TransUnion and Experian), the older your credit history is, the higher your credit score will be (all other things being equal).

3) Although we haven’t paid any interest on our credit cards since we became debt free in 2006, we’ve kept one of our credit card accounts open and occasionally purchase an item with it (paying it off within a few days). Keeping these positive accounts “open” on our credit reports has also helped ensure a strong FICO credit score.

4) We are still aggressively paying off our mortgage and this has been another important factor in ensuring our credit scores have improved.

Curious what your official FICO Credit Scores are? Find out today at myFICO.com!

For more information on improving your credit scores, settling old accounts, disputing items on your credit report, and clearing negative data from your credit file check out my articles How to Clean Up Your Credit Reports and How to Remove Late Payments from your credit report with a “Goodwill” Letter.

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

As I predicted back in August of this year, 2015 contribution limits have been raised for 401k plans ($18,000 vs. $17,500). For a breakdown of all the 2015 IRS cost of living adjustments (COLA) to IRA, SEP, SIMPLE, 401k and 403b plans (and their comparison to 2014 and 2013), I’ve created the following infographic based on the IRS’s official press release:

2015 401k IRA 403b Contribution table infographic

Remember to take these cost of living adjustments into account when you adjust your 401k contribution amounts during your company’s upcoming open enrollment period.

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

Has your current or previous employer offered you a lump sum buy-out package in lieu of your pension? Deciding on whether or not to take a lump sum payment instead of monthly pension payments can be a very difficult decision to make.

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On one hand, you like the idea of having control of your hard earned money. On the other hand, the assurance of having a reliable source of income each month would be nice too.

To help you through this difficult decision, I have created this simple guide to decide whether or not you should accept a lump sum package from your employer or if you should opt to continue under the pension’s original provisions.

Cash Now vs. Cash Later

Let’s look at the following retirement lump sum vs pension scenario:

Ben is 55 years old. His company has offered him a lump sum retirement package of $150,000 today OR $1200/month for the rest of his life starting 5 years from now. Which scenario is the better deal?

To answer this scenario, we need to calculate the “present value” of what $1200/month for the rest of Ben’s life starting 5 years from now would be worth in today’s dollars. In other words, what is the current value of Ben’s pension offer.

We calculate today’s value of Ben’s pension by using what is called the delayed perpetuity formula which I explain in detail here:

The formula for finding the present value of a delayed perpetuity is p/r(1+r)^t

Where:

p = The total amount paid each year from the pension 12 months x $1,200/month = $14,400

r = The opportunity cost of capital (6% in our example) read more about this value here.

t = The number of years the perpetuity is delayed prior to initial payment (5 years in our example)

Microsoft Excel makes this really easy for us and we can just plug the numbers into any cell using the formula: =14,400/(0.06*(1.06)^5)

As you can see we get a “present value” of $179,342 for Ben’s pension.

You can download the free pension vs. lump sum buy-out calculator I created here.

Screen shot of Free Excel Spreadsheet used to calculate the present value of a pension (notice the formula used in the formula bar).

Screen shot of Free Excel Spreadsheet used to calculate the present value of a pension (notice the formula used in the formula bar).

Conclusion:

Since we already know the “present value” of the lump sum offer $150,000 AND we’ve calculated the “present value” of the pension payments starting 5 years from now $179,342. We can conclude (mathematically speaking) that keeping the pension and not opting for the lump sum buyout is the better deal.

Disclaimer: Everyone’s situation is unique. This analysis does not account for variables such as income taxes, lifestyle choices, other funds available, Social Security or any other factor which may affect your overall financial planning. Be sure to seek advice from a certified professional before making your decision.

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

2015 Open Enrollment Benefits Guide

It’s that time of the year again! That’s right…it’s Open Enrollment season!

Open enrollment periods (typically occurring at the end of the year for most employers) are the times when employees are able to make benefit package selections for the upcoming year.

2015 employee benefits guide

Knowing how to maximize your benefits for your family can help save you thousands of dollars a year but it will require a little planning on your part.

This guide will help you make the most of your employer’s 2015 benefits package and help ensure you’re getting the most value out of your employer sponsored benefits package.

2015 Health Insurance Plan Benefits:

Make sure you take time to review your employer's various health insurance options during the 2015 open enrollment period.

Make sure you take time to review your employer’s various health insurance options during the 2015 open enrollment period.

Under the Affordable Care Act (Obamacare), employers are not allowed to deny coverage for anyone based on preexisting medical conditions. They can, however, use “wellness programs” that offer incentives to employees for being pro-active in leading a healthy lifestyle or for engaging in other “preventative” activities such as receiving annual check-ups.

Physicals: Some companies are now offering health insurance plans with smaller deductibles or “credits” in 2015 if employees participate in a “voluntary” physicals during open enrollment periods. In theory, these screenings may detect early stages of a more serious disease which can be more easily treated than if the disease goes undetected until it becomes a bigger problem.

Some people are reluctant to participate in these voluntary physicals as they feel it is an invasion of their privacy. I see it as a win-win situation as around (you’re saving money and have better monitoring of your health).

Wellness Programs: Your company may offer discounts or free memberships to gyms, fitness centers, health food stores, tennis clubs or similar facilities. Take advantage of these opportunities. It would be a shame to let them go to waste. One company I visited had a cafeteria in which the “healthy” meal options cost substantially less than the fatty fried “unhealthy” options (more of a lifestyle choice than a benefit, but I still thought it was a cool idea).

Varying Coverage Levels:  If you’re employer offers several different tiers or levels of health insurance coverage (such as premium or plus plans or gold, silver and bronze level plans) take a look at your average medical expenses over the previous 2 or three years and calculate what your out of pockets costs would have been under each of the various coverage options.  Compare your out of pocket expenses and co-pays to the premiums you’d pay for each plan to identify the best savings for you.

Potential Savings: Maximizing your employer’s medical benefits could save you a thousand dollars or more a year depending on your family’s medical needs.

2015 Flexible Spending Accounts, Medical (FSAs):

I wrote a detailed report on 2015 Medical Flexible Spending Accounts (FSAs) last week and they are another benefit you can use to save close to $1,000 a year or more using pre-tax money (money you don’t have to pay income tax on) to pay for certain “qualified” medical expenses (co-pays, contacts, glasses, therapy, orthodontia, etc.).

Maximum Contribution: You’re allowed to contribute up to $2500 each year into a medical FSA account to be used towards qualified medical expenses. If you’re in the 25% tax bracket, you could save $625 in taxes each year!

Roll-over Provision: Also, under the Affordable Care Act (Obamacare), employer’s are now allowed to roll over up to $500 of unused funds (from employees accounts) towards the following year (unfortunately, it is up to the company if they want to offer this feature).  Be sure to talk to your employer’s human resources department to see if they honor this option.

Before the Affordable Care Act, any money left over in your FSA was turned back over to your employer. The made people reluctant to participate in their company’s medical FSA because they didn’t want to take the chance of losing the money.

Potential Savings: As mentioned above, depending on your income and federal and state tax burden, you could easily save $1000 or more each year by maximizing your employer’s FSA account.

2015 Dependent Care Flexible Spending Accounts (FSAs):

2015 dependent fsa flexible spending account guideSimilar to medical FSA’s profiled above, you can save a tremendous amount of money on taxes by utilizing Flexible Spending Accounts to pay for dependent care related expenses such as child care or any other person claimed as a dependent on your federal income taxes (child care, elder care, etc.).

Maximum Contribution: The current limit for dependent care Flexible Spending Accounts is $5000 (2015 Dependent Care FSA Limits have not been announced yet).

Potential Savings: If you have at least $5000 of child care each year and you’re in the 25% tax bracket, you could save $1250 in taxes each year by maxing out your dependent care FSA.

2015 Life Insurance Benefits:

Just because your employer offers life insurance as part of their benefits package, it doesn’t mean you can’t get a better deal somewhere else.

Group Life Insurance: Most employers offer some sort of group life insurance plan for their employees. Group life insurance is good for many people because it “groups” people of varying health together allowing people with higher risk health to get relatively inexpensive life insurance.  However, if you’re in good health, your premiums are helping to offset the cost of your less healthy co-workers.  You can usually get better coverage with a term life insurance policy.

Individual Term Life Insurance: If you’re relatively healthy, you can actually get an excellent term life insurance policy much cheaper than what some companies offer through their group life insurance options.  Shop around for the best term life insurance rates.  Never buy whole life insurance policies unless you have no other way to get insurance.

Life Insurance Value Depreciation: Remember that most life insurance policies are not adjusted for inflation. If you buy a 20 year $300,000 term life insurance (and something were to happen to you after 15 years) that $300,000 wouldn’t have the same buying power down the road as it would today.  Read more on inflation’s effect on term life insurance.

2015 401K Plan Benefits:

401k Contribution limits are expected to rise in 2015 but we won’t know for sure for a couple more weeks.  Regardless, open enrollment periods are a great time to review your current 401k contributions to make sure you’re taking full advantage of your employer’s 401k benefits package.

Consider Increasing Your Contribution Levels:  Remember, increasing your monthly contributions does not affect your take home pay on a dollar for dollar basis.  For more information, check out my article on 401k contributions and their affect on your take home pay.  You can also reference this handy table below:

401k Contribution Take-Home Pay Calculator.

401k Contribution Take-Home Pay Calculator.

Company Match:  At a MINIMUM, make sure you contribute enough money to your 401k plan to get your employer’s maximum matching contribution.

Be Careful When Maxing Out Your 401k:  As I’ve written in the past, make sure you don’t max out your 401k contributions too early in the year or you might miss out on your employer’s matching 401k payments the last few months of the year.

Annual Compensation Limits:  If you make over $260,000 per year (lucky you) you should also check out my article on 401k compensation limits and how they could affect your company’s matching 401k payments.

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THANKS for reading my personal finance blog! You can learn more about my site here or you can jump right into the juicy stuff by reading my family’s own detailed debt free success story (which has formed the foundation of this site). Please consider signing up for my free email updates!

Are you thinking of increasing your monthly contribution amount to your company’s 401k plan?  Perhaps you’ve wanted to increase the amount you contribute to your 401k plan each month but weren’t sure if you’d still be able to meet your monthly financial obligations with the decrease in net take-home pay.

We’ll there’s good news you may not realize regarding 401k contributions!

Increasing your monthly 401k contributions does not affect your take home pay on a dollar for dollar basis.

Increasing your monthly 401k contributions does not affect your take home pay on a dollar for dollar basis.

Take a look at my handy 401k contributions table above.  If your household income pushed you into the 28% tax level, a $500 increase in monthly 401k contributions would result in your monthly take home pay “ONLY” dropping by $360.

Increasing your monthly contributions by $200 (at the same 28% tax level), would result in your take home pay being about $144 less per month.

As you can see from the 401k contributions chart above, increasing your 401k contributions closer to the annual 401k contribution limits is not as difficult as it may seem.

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