According to the National Retail Federation, Americans are projected to spend $17.6 Billion celebrating Valentine’s Day… Wow that’s a lot.

That number is so large, it’s got me wondering… what exactly is Valentine’s Day for?

The pessimist claims V-Day is a creation by Hallmark and other retailers to make up for the post-holiday sales hangover. And yet the optimist says it’s a time to appreciate that special someone and remind yourselves why you’re in love.

So in my quest for information, I’ve learned a few things about the origins of this heart-shaped holiday. Apparently there were actually 2-3 Saint Valentines who were martyred in ancient Rome which explains why they decided to dedicate a holiday to the name. However, it wasn’t until the 18^th century when the Valentine craze actually began. England was swept with Valentine’s post cards as lovers exchanged cards with clever romantic phrases written on them. The heart of the holiday hasn’t really changed much I guess you could say. But it’s still a bit unclear why the day to celebrate martyrs became a day to celebrate being in love… hmmm…

“The pessimist claims V-Day is a creation by Hallmark and other retailers to make up for the post-holiday sales hangover. And yet the optimist says it’s a time to appreciate that special someone and remind yourselves why you’re in love.
“

On the other end of things, the retail business makes a killing selling flowers, candy, candy flowers and whatever else people want to buy to show their sweethearts how much they matter to them. According to the same survey mentioned above, people who celebrate Valentine’s Day spend an average of $126 for the holiday. Hey that’s like a week of groceries! But what about all these guys buying into all this hype? Are they just doing it because they feel like they have to? Or do they want to really please their lady? Either way, take a look in any retail store a few days before V-Day and there’s no lack of men on a mission looking for the perfect gift.

Love or hate Valentine’s Day, we are buying into it… literally. (Remember $17.6 Billion?)

Personally I’ve never really enjoyed Valentine’s Day being single or otherwise. It just seems too manufactured to me. But maybe I’m just cheap

What do you think of Valentine’s Day? Is it a corporate stunt played out to boost revenues? Or is the romance alive and burning each and every February 14^th?

Let us know and comment!

Financial education is underrated and rare, and even when it’s there the wrong things are too often taught. Too much emphasis is put on spreadsheets and adding/subtracting numbers to get figures that are supposed to signify something but just flat out don’t.

When it comes to money, knowledge is power. You have to have knowledge about the nature of money to be able to manage it. And the biggest misconception about money is that you have to be a math whiz or scientific genius to be good at managing it. A misunderstanding of the true nature of money is the cause of our financial problems. NOT a lack of algebra skills.  Money sitting in our wallets is always leaving, and it’s from two things. Inflation and spending. Investment is the pursuit of combatting these forces and preserving your money’s value. So it’s no wonder why investing is so essential. But these concepts are not always very understandable, so I’ve devised a suitable (albeit unrealistic) metaphor to illustrate money.

Warning: basic principles of multiplication and division ensue. The non-math-minded are warned!

Picture this: You’re on a desert island with a bucket of 50 grains of sand (it’s a small bucket.) Each grain of sand is worth $500 divided by the total number of grains of sand on the island. So let’s just say there are 500 grains of sand on the island (It’s a small island.) So each one of your 50 grains is worth $1 bringing your bucket’s total value to $50. However! The beautiful waves hitting the beach are constantly bringing in new grains of sand to the island reducing the value of each grain of sand slowly over time. So let’s say after 10 years the island now has 1000 grains of sand instead of 500. Now each grain of sand is worth 50¢ ($500 divided by 1000 grains of sand.) This means your bucket holding 50 grains of sand is now worth only $25. But on this island where sand is currency, you had to spend 20 grains over the past 10 years to sustain yourself (you don’t eat much), leaving you with 30 grains of sand. Or $15.

“A misunderstanding of the true nature of money is the cause of our financial problems. NOT a lack of algebra skills.”

Let’s take a second scenario into consideration. With your bucket of 50 grains of sand, you decide to take half of your sand out and keep it to use for living expenses, then with the remaining 25 grains in your bucket, you leave your bucket on the beach to collect sand from the waves bringing it in. This time, after 10 years, you have spent 20 grains of sand again on living expenses, and since the waves have doubled the sand on all the island, your bucket now has 50 grains of sand because you left it exposed to the elements. Now with 5 left over from the sand you kept with you,  you have a total of 55 grains of sand, instead of 30 after 10 years.

In the real world, the waves bringing in more sand are inflation. And leaving your bucket on the beach to collect sand is investment. In the society we live in, money loses more and more value over time so investment must be used to combat its fleeting value. Now granted we still didn’t end up with as much true value as we started with ($50), we still were able to preserve some of our money.

And in most cases, if you’ve preserved wealth through investment, you are winning.

Money is hard to figure out. Even after reading books, blogs, and listening to some major gurus talk about it, I still find it to be a very hard concept to not only grasp, but to explain. But when it makes sense, oh is it glorious. The first time money started to make sense to me was when I graduated High School.

My last semester of High School I took a finance class and my teacher stressed to us every day that we could all be millionaires in 50 years if we just started investing now. So when graduation came around, I took all the money I got from my family for graduation ($500) and headed to the family stock broker, Phil. We set up a 5 year strategy in mostly mutual funds. My plan was to completely write it off and pretend like I didn’t even have the money to begin with, which worked… sorta.

Well 5 years rolled by and guess what? The entire global economy crashed and I only had $293 left. Shoot! I’m not even kidding you when I say that it was literally timed perfectly for me to lose the most amount of money as possible… So naturally, I had to laugh. I mean you have to admit, when things go so perfectly wrong, what else is there to do?

Don’t get me wrong, losing $300 is nothing to cry about (you might even argue I got off quite well compared to most) but let’s just say my first real world experience with investing didn’t go so hot.

Regardless, I ended up leaving my money where it was anyway. The one thing that did go right with my first shot at investing is that during those 5 years I really did forget the money existed, so I just rinsed and repeated and reinvested my small fund.

But this experience begged the question… why risk it? It’s so hard to have enough money for anything, why would I want to risk losing it all by “investing” it? The answer comes in the form of another question: Where would that $500 be today if I had never invested it? And the answer to that question (lost yet?) is restaurants, movie theaters, Starbucks, etc. I would have spent every last penny a very long time ago. So it’s a good thing I locked it up before I had a chance to throw it all away. Because I definitely would have.

But what about a CD or something without downside risk? With that at least I wouldn’t have lost any money, right? Technically not, but with a CD I wouldn’t have gotten the opportunity for upside. Which to me, is worth the risk. I can comfortably say this even knowing now that I lost money. In my opinion putting money in a CD instead of some sort of security (stock, bond, ETF, etc) is like never wearing your favorite shirt for fear it might rain. It’s safe, but what’s the point? Not to not bad mouth CD’s, (they have their place) but the opportunity lost is huge.

What about you? What was your first real world experience with money? Was it better than losing over half of your first investment (like me)?

Budgeting just your own finances is tough and intimidating enough. But budgeting for you plus a family? That requires nothing short of a Herculean effort. It’s a full time job in addition to being a parent, and spouse and it’s no wonder it’s so much easier in the short run to just avoid…. But it can’t be ignored for long, or the effects will be back to haunt you in no time. And when I say haunt, I mean haunt.

Not having a budget for your family is a huge reason families today are in so much debt. The problem is not only lack of time, it’s also lack of knowledge. Financial management is something that people go to 8 years of school for, and make a living doing it. It can be complicated stuff…

The trick with budgeting for a family, is to not let it become complicated. It’s not about obsessing over a book of 20 spreadsheets, trying to plan the next 30 years of your family’s life to the penny.  That’s just not realistic. A family’s budget is something that needs to be lean and easy to change in order to respond to the onslaught of unexpected events that life throws at us.  And in order to express this even more, I’ve decided to put together a few of my favorite posts to form The Ultimate Budgeting Guide for Moms.

Make it Routine

When it comes to family budgeting, a great thing to do is to have a routine. Have a certain day of each month where you can set time aside and budget. This article from Frugal Dad explains how to do just that - Our First of the Month Financial Routine

Don’t Put Frugality Over Safety

Ever bought used items for your family? It’s easy on the budget but it may not be the right thing. According Chris Birk at WiseBread there are some things that just aren’t worth the savings - 5 Home and Family Items to Avoid Buying Used

It’s Not If, but When You Will Need an Emergency Fund

It seems like something that takes a back seat almost every month is an emergency fund. As hard as it is to remind yourself that something could happen, it almost always seems like that money is needed for something else doesn’t it? CNN Money reported on the story of a family who ended up needing one, even though they were pretty well off financially - Budgeting for an Emergency Fund

Teaching The Right Things To the Little Ones

Now that I’ve officially freaked you out about not having an emergency fund, lets talk about teaching your kids about money. This is tough if you’re not too sure how to be financially responsible yourself, but Man VS. Debt did a stellar blog post about a lesson he taught his daughter- Raising Entrepreneurial Kids… “Too Soon” to Start?

Use Money-Saving Tricks During Back-To-School Season

When it comes to family spending, no time of the year is more stressful than back to school… well maybe the holidays (but we have the next 12 months off from that ) But it doesn’t have to be spend, spend, SPEND. There are some corners that are perfectly fine to cut and this post talks about just that - Best Back-To-School Savings Tips from Moms Around the World

Be Clever at the Grocery Store!

No matter how good you are at saving money and pinching pennies, everybody has to eat. But I bet you there are some things that you don’t do at the grocery store that could be saving you money. And that’s why I’m concluding my guide with Kitchen Parade’s legendary guide to saving money on groceries - How to Save Money on Groceries – Part One

Whether you’re a novice or a veteran with a family budget these posts are great sources to revisit. So bookmark them and keep reminding yourself of what they teach.

Happy budgeting

The holidays have come and gone, and we hope yours were great! I myself, received a 12 piece set of pots and pans. I’m still trying to figure out whether it’s going to help improve my (very) sub-par cooking skills, or just encourage me to cook more bad food. Let’s hope for the sake of those who have to eat my food I get better…
I dunno about you, but for us, 2011 has been quite a crazy exciting year. And free online budgeting software has never had a brighter future.
With all the “Year In Review” articles going around during this time of year, I thought I’d do something a little similar but with a twist. The Year In Budgets. Let’s revisit the year, but focus on our favorite subject: budgeting.

US National Budget

Considering budget issues almost shut down the government in April, I’d say things could have gone a little better for our country’s budget. According to usgovernmentspending.com America’s deficit for the 2011 fiscal year is $1.3 trillion but who really keeps count after 100 billion? The national budget continues to be a hugely controversial topic and will probably be a major part of the 2012 elections.

US Consumers’ Budget

We consumers did a little better than the government, but then again how hard is it to beat a $1.3 trillion deficit? Consumer debt is up about $1 billion since last year according to the Federal Reserve. Yeah that sounds like a whole lot but it’s only a .04% increase form 2010… So it looks like we have started to live a little bit more beyond our means this year. (Tsk, tsk)

The Top 1%’s Budget

In light of this years’ “Occupy” movement and their slogan “We are the 99%,” let’s have a look at the budgets of the top earners in the country. The average income of the lowest earner of the top 1% in America was $506,553 while the people half a percentile above them (99.5th percentile) took home around $815,868 this year… Not too shabby huh? But what really makes the top 1% the top 1% is their wealth, not their income. Average net worth of the top 1% is estimated to be somewhere between $14-$19 million in 2011.

Barack Obama’s Budget

How much do you get paid for being the leader of the free world anyway? It’s not like it’s an easy job, right? Well to start off, Obama gets an expense account of about $50,000 then a salary of $400,000. I guess that’s not all that bad when you consider free rent at a 132-room mansion complete with a movie theater, bowling alley, billiards room, and tennis court. Just a few perks of crashing at the White House. But according to his tax records, Obama makes most of his money from his books rather than his salary. As reported by the Huffington Post his estimated net worth in 2011 is $5 million

Your Budget?

So that’s how the budgets of the rich, the American public en masse, and the president went this year. What about you? Did you strike it rich this year? Or did you go into more debt? Let us know how this year went for you on a scale from 1 – 10. (10 being you totally owned it and 1 being you are headed to the courts to file bankruptcy.)

It’s not getting easier to follow the American Dream. Everything costs more money and money is more scarce. The national gas average is $3.85 a gallon right now, 50 cents more than it was last year. These gas prices eat into our budgets for personal things – mainly things that entertain us and make life worth living. We’re losing our identities as we struggle to live in strange economic times…times brought on by an artificial economic boom that was based largely on bullshit.

What can you do but shake your head and say, “whatever.” These are indeed cynical times. Everything is bad, and we have no choice but to carry forth with a stiff upper lip. The economy sucks, the housing market sucks, you can’t afford a nice new car, and you can’t afford the maintenance on the shitbox you have right now. There aren’t jobs, people are upside-down on houses that were appraised for way more than they’re worth; houses on which they were loaned money based on that appraisal, and the banks that hired these shitty appraisers are being bailed out by the government for billions of tax payer dollars…

Then these banks loaned that money back to the government, and on and on and on…

On top of all this, you’re supposed to stay in shape. The Center for Disease Control and Prevention said in a 2008 study that 68.3 percent of Americans over the age of 20 years old are overweight or obese.  In your efforts to fight this, are you paying for a gym membership every month in case you happen to have the motivation to get some exercise on the way to or from work?

Western Civilization is crumbling. We’re doomed, unless we learn to survive. Sure, you can go occupy something. Or, you can fight by taking charge of your own personal economy, and not relying on banks or the government to give us artificial means to live luxurious lives. There are ways to be minimalist in this society, and still live a good life through this “Great Recession,” in which consumer spending has decreased by $7,300 per person.

“In 2007, a statistically average household, with an annual pretax family income of $63,091 and 1.9 vehicles, spent more on transportation than it did on clothing, health care and entertainment combined ($7,432),” said Jim Motavalli in the New York Times Wheels blog. $7,432 is a lot of money.

Get yourself a bicycle.

Speaking from my own personal experience, in a typical year, you aren’t going to spend more than $432 on a bicycle. Get a bike, learn to mix that with mass transit and carpooling, and voila! You’re saving yourself thousands of dollars every year. That’s a raise. That’s your money, money you earn that you don’t have to give to some uptight oil baron somewhere for him to spend on expensive safaris, or whatever those oil barons do with our gas money. I haven’t had a car for several years, and I’ve saved a lot of money with my bike. I don’t know how I would’ve survived otherwise.

You also get yourself in shape. It’s not that hard to ride a bike. Even if you have to go uphill, that means at some point you’ll go downhill. Commit yourself. Not only are you getting exercise, you’re getting to work. Two birds with one stone. It’s better for your personal economy, and you’ll also be in better shape to survive the approaching decline of civilization.

“I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.” — Albert Einstein

Do you get your oil changed every 3-4k miles? If so, you could be wasting your money. As crazy as it sounds, it turns out most manufacturers recommend closer to 7,500 – 10,000 miles between oil changes. So why the heck have I been getting my oil changed twice as frequently as recommended?! Apparently I’m like 51% of the nation who believes, according to the market research firm NPD Group, that oil is supposed to be changed every 3,000 miles. And likewise only 33% wait longer than 4,000 miles for an oil change. That’s a lot of unnecessary oil changes!

My question is why do practically all auto shops recommend such small intervals between oil changes? I guess the obvious answer is that they want you to come in more often and give them more business, but why isn’t it more common knowledge that the manufacturers recommend such a longer period?

This doesn’t help my constant concern that I’m being ripped off when I take my car in. It seems like whenever I go in to have my car serviced they find some crucial problem with my car that’s an extra $400. I never know whether to take them seriously or not. Either way, a little involvement with what’s going on with your car is always beneficial. I usually try to ask them to show me what they’re going to do so I can at least get some kind of understanding of what is going on before I shell out my savings to them.

At any rate, you can avoid the problem by doing some homework and in the process, save some cash.

The next time you get that little sticker in your windshield from the auto shop, do yourself a favor and ignore it. Do your own math. Go to checkyournumber.org to find out how many miles that the manufacturer recommends for your car between oil changes.

For More:

State hopes to break car owners’ habit of changing oil too often – LA Times

checkyournumber.org – CalRecycle

3,000-mile rule update – Detroit Free Press

It’s been a few weeks since we posted a status update on the Budgetable beta, so I thought I’d take a minute to get everyone up to speed.

Over the past few weeks we have been hard at work testing the core budgeting functionality of the software. This process alone is pretty intense. Since everyone has different spending habits, incomes, accounts, etc, and because Budgetable is extremely sophisticated in how it analyzes these variables, we’ve had a lot of ground to cover! Nonetheless, there haven’t been any major hiccups and we are still on schedule

We have also devoted a lot of time to our security infrastructure. We’ve got some really smart people managing Budgetable’s security.

As for beta invites…

As I’ve mentioned before, we received a tremendous response from people wanting to check out the beta. Therefore, we’re going to be sending out beta invitations in phases. We haven’t decided on an exact number, but not everyone who signed up for a beta is going to get in during the first phase (although those who don’t get in the first phase won’t have to wait long).

So who will receive a beta invite during the first phase? Everyone who signed up during FINCON11 will get one. Also, invites will go out to tech bloggers and reporters (yeah yeah, I know… but you understand From there, we’ll start sending out invites to everyone else.

Trust me, I wish we could just open up the flood gates! If you don’t get an invite during phase one, don’t fret… subsequent phases will roll out quickly.

Shoot me an email if you have any questions.

-Ryan Bales
Founder & CEO

The holidays are upon us so we decided it’s time to give something away. And what better than $25 at Amazon? With all the cool stories we heard from our readers after Matt’s recent post about the dumbest thing he ever bought, we decided there must be some other great stories out there about embarrassing buys. So we want to hear what the dumbest thing you ever bought is.

All you have to do is:

Post a picture of the dumbest thing you ever bought to our Facebook page and you’ll be automatically entered.

And whoever has the most entertaining item takes home the prize! –> A $25 Gift Card to Amazon.com. Now is your chance to earn a prize for your mistake!

It’s December which means Christmas lights, changing weather, tight budgets, and of course some serious brainstorming about what kinds of gifts to buy. It seems simple enough to pick out a gift for a relative, friend, or loved one at first glance, I mean it’s a present right? If you’re like me it is easy all the way up to the point when you actually have to make a decision of what to buy.

Who would have thought picking out a present for someone you spend all your time with could be so puzzling? And it doesn’t matter if it’s your spouse of 50 years or your new boss you’ve known for 3 months, no one is really easy to shop for. Of course there are people who are nicer about what you buy them, but it’s just not that easy to pin point someone’s interests to find the ultimate gift that he/she will use for years to come. So here’s a quick list of the top 5 gifts that literally ­anyone will make use of.

1. Canon Rebel

You don’t have to be a photographer to be able to use a camera with a nice lens on it. Taking pics is a pretty universal thing and as higher end cameras become cheaper, more and more people are making the switch to DSLR’s like the Rebel. The Rebel T3 starts out around $500 and includes an 18-55mm lens. Not bad for the quality!

2. Netbook

A netbook is pretty much a simpler form of a laptop. It’s built for mainly one thing: surfing the web, which surprisingly enough, is just about all most of us do on a computer in this day and age. This can be good for anyone since web browsing is something practically everyone does. And don’t think you will end up paying a fortune for one of these, if you go cheap, they can run you as little as $200. That’s less than a smartphone!

3. Headphones

The great thing about headphones is that everyone can put them to use. From music to podcasts to audiobooks, headphones can serve many different purposes and could make the perfect gift for someone. And the different types such as ear buds or full cover provide uses for different occasions so even if they already have a pair, they might need a different style for different activities (for example I use ear buds when I’m exercising or walking somewhere and full covered headphones when I’m at my computer.)

4. Komachi Knives

Everybody needs a knife for something, so I say it might as well be colorful and extra sharp. This is just one of those things that is both cool and useful to have around the house. Not only that, it is a good product. What differentiates Komachi knives from others is its coating that helps the knife clean easily.

5. Barnes & Noble Gift Card

This is my personal go-to gift. Even if whoever you’re shopping for isn’t a bookworm, it can be utilized. There are books about pretty much anything you can think of, so this can really be used for a variety of purposes whether it’s educational (a history book) or the furthest thing from it (a graphic novel). And better yet, you can order it online and save yourself the drive.

Still need more? Here are some sources I found useful.

• Amazon Gift Guide
• Ok Magazine’s Gift Guide for Kids
• Tree Hugger’s Green Gift Guide
• Lucky Magazine’s Gift Guide for the person who has everything
• Etsy Gift Guide