rocket finance

Facebook and PF Challenge

I just opened a new facebook account under the name Rock Etc. Feel free to “friend” me if you get the chance. I created the account so that I could participate in a new game created by Debt Kid called PF Challenge. Currently I am competing in a personal finance blogger tournament. I defeated Ron from Wisdom Journal in the first round and then I was soundly defeated by Jeremy from GenX Finance in the second round. The tourney is double-elimination so I still have another chance to “go all the way”.

The PF Challenge application still has a few bugs, but they are being worked out. The game is a fun way to compete and to learn more about personal finance.

Sign up and challenge me or another of your favorite pf bloggers!

Posted in fun | 1 Comment »

When is payday?

How often do you get paid and does it affect how you spend and budget?

I have been working a more or less full-time since 1997. The other day, I was thinking about all of the different paydays that I have had over the last decade:

• Paper check every Friday afternoon - kind of an odd way to do business. The check had all of the requisite taxes taken out, but the check was handwritten. This was an hourly job with a lot of overtime, so the amount was different every week. Most of my fellow employees “drank” most of their check by the following Monday. My employer did not even give a stub.
• Direct deposit every other month - this was a strange set-up as well. The work was sporadic, so I never knew exactly how big the check was actually going to be.
• Bi-weekly direct deposit on Wednesdays - there were two months out of the year where the dates fell so that I would get three checks instead of the usual two checks per month.
• Paper check every 1st and 15th - pretty normal. In ten years of working (part-time) for this employer, I only lost one paper check before I could make the deposit.
• Last weekday of the month - just started this one. I’m not sure what I think about it.

Technically, our pay period should not affect our budget, but I think that payday frequency can have an effect on how well the monthly budget is followed. If I had the choice, I prefer to be paid every two weeks. I think that it makes us plan our spending, but if we have problems, relief is in sight.

I find that a weekly pay period can encourage bad habits with your money. It is just too easy to waste a little here and there when you know that the next payday is just around the corner.

Currently, I am paid on the last weekday of the month. Even though our monthly take-home pay is the same whether there are one, two or four weeks between pay periods, I find that a single monthly check has been the hardest to deal with. To make things more difficult, our monthly budget is still feeling the effects of our move and our expense patterns have not quite settled into a routine. When we get in a pinch in the middle of the month, it is too easy to look to a credit card for a temporary fix. I plan to spend a day in the near future to bring back budget discipline. The FNBO Direct online billpay has help to bridge some of the gaps. Having our bills paid from our savings account helps us to maximize float interest and smooth over small budget surpluses and deficits.

Does the timing of your payday affect your budget habits?

Posted in budget | 12 Comments »

Any poker players here?

I have never played poker for money. I have played a half-dozen hands of Texas Hold ‘Em just for chips with no money backing them, but nothing more serious than that. I won a couple and lost a couple and pretty much enjoyed the experience. On the other hand (no pun intended) I watch poker on television whenever I get the chance.

I know, I know. What a complete waste of time, right? Watching degenerate gamblers fiddle with chips while the announcers make corny comments.

But it fascinates me.

I enjoy competitive sports of all kinds and poker includes all of the drama of traditional competitions except for actual athleticism. I enjoy the guy who can bluff well, the player who wins pots by betting at the right moment and especially the player who can tell what an opponent is holding by looking at his eyes. Further more, I am a math guy and the tension between odds and gut instinct keeps me on tenterhooks as plonkee would say.

And I have a lot of questions:

• Do professional gamblers report winnings from cash games to the IRS?
• How much of a tournament “cash” does the winner actually get to keep after taxes?
• What does a professional gambler do for health insurance?
• How many gamblers go bankrupt for every gambler that makes it?
• Is it legal to play poker for money in your own home?
• How does one go about convincing his wife that spending $10K on a poker tournament buy-in is a good idea?
• How much money do you have to win before you are considered a “professional poker player”?
• How much do the dealers make?

I was recently invited to participate in a home poker game where the buy-in is $5. I have not yet decided if I will play. The competitor in me wants to do it. My ego makes me think that I can be good at it, furthermore, and $5 doesn’t seem like a high price to pay for a little fun with the guys. But . . .

Do financially prudent people gamble? I believe that part of a good financial plan is to model your habits after successful individuals . . .

I believe that I might be susceptible to addiction. You should see me tear into donuts or a Whopper. It is one of the reasons that I don’t drink. Is it wise to expose myself to the temptation of gambling?

A $5 home game once in a while seems like something that I could handle, but what if my children know that daddy gambles? What if they start the habit at a young age and it ends up hurting them?

Is it simply a wise use of my money?

Should a newbie like me even think that I have a chance at winning anything? I can’t even remember which is a stronger hand: a straight or three-of-a-kind. . .

Photo by ian of leam.

Posted in about me | 7 Comments »

Just to show my heart is in the right place

Today’s article is a guest post from Tisha Kulak, who writes for Creditorweb.com, where she writes about credit card offers, finances, credit cards, and responsible credit card use. Even though I do not share the same pessimism about our planet as some in the mainstream environmental movement, I believe that wise stewardship of our resources is a good idea. Here, Tisha gives some ideas about how to Go Green with Your Credit.

More and more people are increasing their efforts to clean up and protect the environment and the planet on which we live. In the age of technology and a broader range of options for living, it is becoming a bit simpler to go green with very little effort. If every one did their part, not only would we be able to create a simpler, more positive and healthy lifestyle for ourselves, we would be doing it for everyone around us.

In addition to the contributions from the citizens of the world, more and more companies are also becoming more active in protecting the environment and therefore making it easier for us as consumers to participate.

Here are 7 simple ways to go green with your credit:

Stop the Junk Mail

Not only is junk mail habitually annoying, it is also a huge negative on our environment due to the amount of trees it takes to make the paper on which junk mail is printed. It also affects the environment due to the amount of landfill space it inhabits when consumers file it away in the trash. There are several companies now accessible online that will help you limit or stop the receipt of junk mail for a reasonable fee. In addition to the service these companies provide, many will go one step further by donating to an environmental cause each time a new client registers.

Opt for Paperless Accounts

Many credit card companies, utility companies, and other corporations who supply monthly statements to their customers now give the option to ditch the paper statements and access their accounts online instead. In return for going paperless, many of these companies will donate to an environmental cause or participate in improving the environment by planting a tree.

Decline a Receipt

Whenever you pay for gas at the pump with a credit card or pay a visit to the ATM, if given the option, decline a receipt. You will save a lot of trees and prevent a lot of waste. Just make sure you keep an accurate spending record since some people rely entirely on receipts for their expense tracking.

Join a Club

Signing up as a member of an environmental organization will not only enlighten you on the efforts to go green, there can also be other advantages. Some organizations offer their own credit card. Apply for a one of their cards and using it for your purchases will provide the organization based on a percentage of your money spent that will be used to fund and sponsor different environmental projects.

Reap Environmental Rewards

In addition to environmental club-sponsored cards, there are also other credit cards which offer rewards points which can be converted into donations to your favorite environmental group. With the increasingly tightened budgets, many families are finding it harder to justify a donation to a favorite cause. Using an environmental rewards card allows you to buy what you need and still contribute to green efforts without spending another dime. Research which cards benefit your favorite charity or cause before committing to one card.

Creatively Recycle Old Plastics

With the exception of picking door locks, credit cards that have expired have many uses if you put on your thinking cap. Kids crafts, guitar picks, and even an emergency ice scraper are all ways to keep using your plastic for the good and not just tossing it into the trash. You will not only be helping to improve the environment, you will also improve your creative side.

Posted in credit card | 2 Comments »

Global Warming Update

I must be a masochist for continuing to post on this subject, but even though my subscriber count decreases on global warming posts, the controversy fascinates me. In some ways I think we are watching the propagation of another great “scientific” myth. Human history is littered with ideas that at one point were considered conventional wisdom and the next they were utterly disproved. Conventional wisdom once told us that a heavier weight would fall faster than a lighter weight, that rotten meat “spontaneously generated” flies, that certain racial groups are mentally superior, that bloodletting helps cure disease and that the earth moves around the sun.

As for global warming, I do not oppose a vigorous discussion of the hypothesis and a serious consideration of the idea that mankind is causing large-scale warming of the planet. I shared in an earlier post that I once believed that man was causing the warming. The thing that frustrates me is that our media is not even-handed with the data. They are quick to trumpet the latest evidence that supports global warming, but never really report credible opposition to the theory.

As a result, our governments are being pressured by a constituency that does not have all of the facts. Pressured to make decisions that could cripple economies. Pressured to make decisions that line the pockets of an elite few.

For those of you who are interested in the other side, here are three recent articles that call for your consideration:

An article by Dr. David Evans who was a consultant to the Australian Greenhouse Office from 1999 to 2005. Here is one particularly important statement:

The world has spent $50 billion on global warming since 1990, and we have not found any actual evidence that carbon emissions cause global warming. Evidence consists of observations made by someone at some time that supports the idea that carbon emissions cause global warming. Computer models and theoretical calculations are not evidence, they are just theory.

I strongly encourage you to read the entire article. Dr. Evans was a believer in global warming and occupied a place of prominence in researching the phenomenon, but changed his mind after viewing the evidence first-hand.

A statement by the American Physical Society, that at least some of it’s 50,000 members do not believe in the theory. Furthermore, the APS has opened a debate on the issue. This debate should be highlighted by our news media. Here is one interesting quote from the Daily Tech blog post on the subject:

In an email to DailyTech, Monckton says, “I was dismayed to discover that the IPCC’s 2001 and 2007 reports did not devote chapters to the central ‘climate sensitivity’ question, and did not explain in proper, systematic detail the methods by which they evaluated it. When I began to investigate, it seemed that the IPCC was deliberately concealing and obscuring its method.”

Seems that I am not the only one who questions the IPCC conclusions.

The final article for today is actually a bit whimsical, but the photos that are highlighted illustrate how some global warming proponents have misrepresented educated guesses as fact. And now they are getting sued for it. For those of you who struggle with metric to English conversions, 30 cm is a little over 11 inches - this is how much the ocean is going to rise over the next 100 years - according to the global warming advocates.

I’ll be back tomorrow with more on personal finance.

Posted in global warming | 10 Comments »

A new gas card rewards strategy

Most regular readers of Rocket Finance know that we use the Chase Freedom Card almost exclusively. We have earned over $500 cash back (including the sign-up bonus) during the past fourteen months. The Freedom Card cash back rewards are 3% on your top three spending categories. Once you save up $200 in your rewards account, you can redeem your reward with an extra $50 for a total of $250. All other purchase categories earn 1% cash back.

When we first started using this particular card we were only spending about $175 a month in gasoline, approximately $25 at quick serve restaurants and then another $100 in the wireless/communications category. We were earning about $9 per month in bonus category spending. However, as a result of our move and the uptick (upsurge?) in gas prices, we have had several statement periods where our spending eclipsed $600 in the 3% categories and the problem with the Freedom Card is that once you reach $600 in spending in bonus category spending, the cash back percentage drops back down to 1% regardless of category. In essence, 3% earnings are limited to $18 per month, but 1% cash back is unlimited up to your line of credit. We are leaving money on the table.

So we are going to put another credit card into regular usage: the Chase PerfectCard Mastercard. The PerfectCard is offering 6% cash back on gasoline purchases for the first 90 days and 3% thereafter. The card also comes with a generous introductory 0% balance transfer APR with a capped fee, although we won’t use it for balance transfers. Unlike the Freedom Card the PerfectCard is really only a gas card. It offers 3% cash back for gasoline, but only 1% on all other purchases. Furthermore, the PerfectCard rewards are capped at $15 per month.

So, in order to max out our rewards, we are going to use the Freedom Card for groceries, wireless/internet/cable, and quick serve restaurants. I doubt that we will ever go over $600 in these spending categories. The PerfectCard will be our gas card.

I know that many in the personal finance blogosphere strongly oppose credit card usage, and I understand and sometimes share their concerns. However, if you stick to your budget and pay off your balance every 30 days, your credit card could help you save an extra $30 or $40 every month.

Posted in Uncategorized, credit card | 5 Comments »

Should you fill up with regular or mid-grade gasoline?

Last week I mentioned that we were leaving on a cross-country road trip and that I was going to conduct an experiment to see how much our gas mileage improved with mid-grade gasoline. Deamiter was quick to point out many potential problems with my experiment. He was right and the results of my test are not conclusive. There were too many variables.

My original plan was to fill up with mid-grade gasoline during our 1,000 mile journey to Wisconsin, drive around for the first three or so days of our visit and then start purchasing regular unleaded about half-way through. We would use each grade for approximately 1,500 miles and for a similar ratio of town to highway driving.

The first part of the plan worked great. In fact, it was better than great. A supply and demand fluke caused most of the gas stations in Nebraska, Iowa and Illinois to price mid-grade unleaded below the price of regular unleaded. We paid up to $.10 cheaper for mid-grade all across the United States. I meticulously recorded the number of gallons and miles and figured our miles-per-gallon at every stop. However, I also started to realize that the test was not very scientific, here are some of the reasons:

• We used several different brands of fuel. There really aren’t too many gas chains that are consistent from CO to WI. Furthermore, when traveling with three kids, five and below, you can’t always pick where and when to stop.
• I don’t think that all gas station pumps “click-off” at the same point. I suspect that the difference can be as much as a quarter of a gallon. Enough to throw off MPG calculations.
• We did not alway fill up with the same amount. Sometimes we had to stop after two hours and once we went four hours without a stop! We filled up every time.
• Co to WI is mostly downhill. WI to CO is mostly uphill. Plus we went a slightly different way on the way back.
• Van weight varied quite a bit. Of course, we unloaded after arriving, thus driving around with an empty van for a week. On our trip back, we acquired more stuff and I am sure that I gained 5 lbs after eating my mother’s food for a week.
• Our oil was significantly newer and cleaner at the beginning of the trip than at the end of the trip.
• Unfortunately, mid-grade gasoline was still cheaper in Iowa on our return trip, so while we used mostly regular unleaded for the last half of our trip, At least one tank was mid-grade. I couldn’t bring myself to pay more for gasoline just for a blog post.
• Regular unleaded is 85 octane in Colorado, in the rest of the states it is 87 octane. Mid-grade in CO is 87 octane and 89 octane almost everywhere else.

I had hoped to post most of the numbers here so all of you could see the variations in MPG. In all of my calculations, I figured everything out to the hundredths place - 15.67 gallons, 21.95 MPG, etc. I was very proud of all of my math. The problem was that I kept the record of our fill-ups on a 3×5 card. I love 3×5 cards and always have one or two around. On the day that we were loading up the car to go home, my dear wife decided to clean out the area around the cup holders and dash. I probably had a half-dozen cards with various scratchings - phone numbers, practice plans, post ideas, etc. Most of the cards did not contain anything important, except for that one card with all the numbers. However, all of them ended up in the trash.

Mrs. Rocket felt bad and tried to make me feel better by offering to call my parents, get them to dig the card out of the trash and read off the numbers to us over the phone. I did not think this was such a great suggestion. She also said, “I think your posts have too many numbers anyway”.

I realized that this was the final straw for my poorly executed experiment.

In spite of all the trouble, I think that I was able to generate a working hypothesis. I believe that mid-grade gasoline improves our gas mileage by two to three MPG for our 2005 Dodge Grand Caravan. I say this without the rigor of empirical data, just a sense of how things were trending with the data I had available and taking into account all of the factors. When regular unleaded is $4.00 a gallon, our cost per mile is $.21. If we conservatively assume that we get two more miles per gallon with mid-grade gasoline, we save money by purchasing the mid-grade as long as it is cheaper than $4.33.

I plan to buy mid-grade unleaded when the price difference is less than 8% of the price of regular unleaded. If you need help in how to figure out percents, send me a message.

I think that I really need a MPG Meter.

Posted in vacations | 4 Comments »

Does a frugal culture exist in your workplace?

I recently changed jobs and with my job change came a change in culture.

I recently left a job in the midwest. The town where we lived was dominated by old-country Germans. Most of the families had lived in the United States for three or four generations, but the habits and lifestyle was still present. Neat yards, sausage, saurkraut and punctuality were critical elements to our daily lives. Our workday began at 8 am sharp and lunch was clearly defined. If we took 30 minutes for lunch, we could leave the office at 4:30 pm. If we took a 60 minute lunch, we had to work until 5:00 pm.

I then took a job in one of the western states and we live in a suburb of Denver, Colorado. The culture here is a bit more eclectic and laid back. At other workplaces in the area, I have observed individuals arriving 30 minutes late for work and not being reprimanded. Employees at my particular place of employment can show up anytime between 9:30 am and 11:00 am. In fact, when I was hired, I was not given an arrival time, my supervisor simply told me to “get your job done”. Lunch can occur anytime between 11:30 am and 1:30 pm and can last more than an hour and a half. (To be fair, there are times during the year where the employees in my line of work put in a great deal of overtime - nights, weekends, travel, etc.)

So far, while I am a little unnerved by the laissez faire approach (Mrs. Rocket is a western girl and loves it), I am beginning to adjust - although I am still the first one to enter the office every day. The area where I am having the most difficulty adjusting is in what is spent on food and beverages. In my previous job, everyone either made coffee at home or brewed some kind of inexpensive brand in the office. I didn’t spend more than $3 a month on work-day coffee. In my new office, there is no place to brew our own java and everyone who uses caffeine in the morning, stops off at Starbucks on the way to work.

Lunch is the most treacherous part of the day. In my old office, most people “brown-bagged” a sandwich to work. The few who didn’t bring a lunch, lived close enough to run home and eat. Going out for lunch was an exception, usually paid for by the boss and an event planned well in advance. At my new workplace, everyone goes out to eat every day. No exception. And it is kind of an uneasy situation because sometimes the “boss” buys lunch and other times, we all pay for our own - and I never quite know in advance whether I am paying or when someone else is going to pick up the check.

Who’s buying is critical information.

To make things worse, every lunch at this office seems to be a working lunch and there is a lot of pressure to go drop $6 or $8 or $10 on an unhealthy meal that I can’t afford. There have been a couple of situations where my boss has basically ordered me to go to lunch - on my dime. I am still the new guy, and I don’t want to cause too many waves, but going to lunch even one time during a week busts our budget. Mrs. Rocket is pretty consistent about making a lunch for me when I remember to ask the night before, so I took a lunch every day last week and got a way with it - primarily because most of my office was on vacation. I have been playing along and paying the price for the last few months, however, I must cut back.

If I dig in my heels and say that I am not going to lunch,

• My office mates will probably volunteer to buy lunch for me.
• At some point, I will need to reciprocate and I can’t afford that either.
• When my office-mates buy lunch for me, they think that they are saving me $10 or $8. What they don’t realize is that they are only saving me about $1.50 per day.
• We are not dirt-poor or in need of charity, but for some reason, brown-bagging at this office seems to imply that we are one step from applying for food stamps.
• They don’t understand that I like the lunches that my wife makes. Mrs. Rocket makes a mean sandwich - turkey, pickles, tomato, lettuce are typical ingredients and Mrs. Rocket’s lunches cost less than $2.00 despite the inclusion of fruit, chips or crackers, cookies, yogurt etc. . . . and her lunches don’t clog my arteries quite as much. Although, the chocolate chip cookies make me wonder.
• If I refuse to go (which I have done a half-dozen times), they will still go without me and will not have input in the discussions that take place.
• I fear that I am gaining the reputation of a skinflint or worse: anti-social.

Here is the irony: my fellow employees cannot afford to go to lunch either! From what I can tell, they just do it as a part of the job. I suspect that several of them are racking up significant debt in the process. I estimate that they spend $40 a week on lunch, that’s over $2,000 a year! And what if you buy for someone else once in a while or take your spouse out to eat on the weekend? I think some of these folks are dropping $3 to $4K a year at restaurants! They just seem to think that $8 to $10 lunches are a job expense just like proper clothing or gasoline. I know that the restaurants in our area appreciate that kind of thinking . . .

A further irony is that salaries are approximately 15% higher (for virtually the same work) at my new job than my old job - yet the number of complaints about compensation are far greater here in CO than in WI. I believe that with a minimum amount of effort, they could give themselves a 10% to 15% raise without begging from the boss. I have not taken much of a stand on this issue up to now, but I am quickly approaching the moment when some kind of discussion will need to take place.

Maybe I will start my own personal finance movement called the “brown bag factor” in my office.

How have you dealt with a clash of finance culture in your workplace?

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Posted in frugality | 13 Comments »

Gas prices are up

Just a quick post from the hotel - We are on a trip this weekend that will require us to drive close to 3,000 miles. Our mini-van averages approximately 20 miles per gallon. I don’t want to think about this any more. You can figure out the rest at home if you like.

Actually, since I am a glutton for punishment, I will be keeping track of our gas mileage this trip. My main purpose is to find out if there is a MPG difference between regular unleaded and the mid-grade unleaded. I’ll let you know how that goes.

I also plan to practice my hypermiling skills and introduce my wife to that fine art.

I am considering the purchase of a MPG Meter . . . I’m a sucker for gadgets.

The reality is that the only way we are really saving any cash is with a cash back gas credit card. Our cash back card of choice is the Chase Freedom Card, but I am considering a switch to the Chase Perfect Mastercard.

See you in Wisconsin!

Posted in Uncategorized, credit cards | 2 Comments »

Energy conservation is not a solution

Don’t get me wrong. Energy conservation is a smart way to save money as an individual or family. Furthermore, I would even go so far as to say that if you don’t try to find ways to conserve your own personal energy use, you are foolhardy and frivolous.

At the same time, energy conservation is not a solution to our national energy crisis. Conservation only delays the inevitable. It preserves the current state of energy usage, but does not move mankind forward. Progress requires energy and progress is the only way that we will find ways to use less energy as well as find new sources of energy. Most homes and cars and factories and farms today are more energy efficient than those of 25 or 50 years ago, but the technological advancements that brought about increased efficiency required research, development, experimentation, funding and market forces - all of which require energy.

Energy conservation can never really reduce the amount of energy that we use - except on a personal level. On a national or international level, energy use is constantly increasing and always will. Our population is growing and more importantly, mankind’s standard of living around the globe is increasing rapidly. People who used to ride bicycles in China and India are now driving cars. Africans who once lived in huts are now dwelling in buildings with electricity and running water.

Energy conservation is a good personal habit to help your bottom line, but the only way that conservation will result in less energy usage is if progress comes to a halt.

I am not suffering under the delusion that fossil fuels are the long-term answer to our energy crisis. It is clear that we must pursue all forms of alternate energy. However, the short-term free flow of fossil fuel will help to facilitate progress. Progress combined with the free market will move us closer to alternative fuel sources.

Some may ask, why is the free market a part of the solution? The answer is that the free market is more efficient than the unwieldy government bureaucracy. Many companies take risks to develop an alternate fuel source that might supplant oil or natural gas. A natural result of such risk is that the market will discard failed ideas. For instance, the government has started to market ethanol as an alternate energy source. On paper, ethanol sounds like a great idea, however, we have now learned that there are numerous problems with this energy source: a) my car doesn’t run well on it b) it might cause just as much pollution c) it costs more energy to manufacture than it produces d) without government subsidies it is more expensive than gasoline e) it is causing the cost of food to skyrocket, etc.

I am not here to debate ethanol, but it is clear that our government has artificially propped up this particular alternative fuel. The free market would have rejected ethanol a long time ago and our resouces would now be focused on the next idea. Instead, we are now stuck with a flawed fuel and a tax subsidized infrastructure that will take years to dismantle. The irony is that if ethanol had been allowed to move through the market on a level playing field, many of the problems related to its use might have been solved. Innovation and efficiency are the hallmarks of capitalism. Unfettered competition between fuel sources is the only way for mankind to progress toward a clean, available, and inexpensive source of energy.

Our government has a track recored of failed energy policies: price controls, moratorium on drilling, moratorium on nuclear development, opposition to refineries, subsidized mass transit and more. Energy conservation is just another government policy that will not help us to move forward. It is a band-aid on a gaping head wound.

Sometimes I wonder if those who favor alternate fuel sources over fossil fuels should change their tack:

1. Stop opposing fossil fuels
2. Support drilling
3. Support new refineries
4. Support increase mining

Then when the price of energy drops and energy consumption increases, mankind will more quickly consume our fossil fuel resources. At that point, every environmentalist will have his wish: a world without fossil fuel, where alternate sources of energy are the only alternative.

For more energy analysis read Oil Hysteria at On Financial Success.

Posted in energy policy | 14 Comments »