Friday, November 17, 2006

Test Table Usage

Testing the insertion of a Word table.
Used Front Page as an step to get to Blog. I had to delete the "html" "body" tags to get it to take. Note, there is a log of space between text and the table for some reason. Need to resolve.

Note table disappears if "temp" file from Front Page is not saved - may need to be available somehow on the the web like a picture.

Test Table below

Table is above

Sunday, September 17, 2006

Pennies from Heaven – Part 5 (Rebates Intro)

We continue in setting up a systematic procedure for handling extra income that floats down from the sky. If you are just joining this quest, see Part 1. In this part we take our first look at Rebate Checks – how to keep track of what should be coming in the mail and what to do with them when they arrive.

Rebates are one way we can potentially save on the cost of an expense or service. For purposes of this discussion we are talking about mail-in rebates. These instruments require that you pay a given price up front, and then receive a portion of the expense back at a later date in the form of a rebate check. There are typically one or more documentation requirements such as a copy of the purchase receipt, a UPC from the package, some type of filled-out form, etc. Also, there is usually some type of date window within which you must make the purchase and mail-in the materials. I recommend that you review and understand all of the requirements needed to obtain the rebate prior to making the purchase. If you have any doubts, ask a sales clerk. If you are still confused, pass the item by unless you would have bought it regardless of the savings offered by the rebate.

There are certainly other ways to save money on purchases, some of which are discussed in other parts of this book. Among these are coupons, percent-off deals, instant rebates, credit card cash-back rebates all of which can be useful. Some “savings” arrangements are somewhat “scamish” such as Cash Vouchers see page 285. The details below pertain only to mail-in rebates.
Are We Saving Yet?
First of all, make sure that the rebate in question has no strings attached, i.e. there are no other purchase conditions involved. Strings include some commitment to subscribe to maintenance or other service for a period of time. Also make sure that the rebate will be paid in cash i.e. in a check made out to you, not some coupons or gift cards or such. If there are any strings or non-cash savings involved, then look at the discussion on coupons, etc. in Pennies from Heaven to see if the deal is any good.

Consider an example of a laptop computer offered at $199.00 after a $200.00 rebate. Sounds like a great deal; however, within the associated fine print is a requirement to sign up for an online service for a minimum of 12 months. This is not a scam, but does add considerably to the cost of the deal. If in fact you currently don’t have an online service or are willing to transfer to a new service, then it may not be a problem. However, you do need to be aware of any such strings and evaluate their impact on the overall deal before making the purchase.

Don’t get carried away by the savings involved until you determine that the purchase in question is doable within your normal budget. Saving money on an item not budgeted for is another form of unconscious spending! Also, your rebate check can be used for any purpose as outlined below; however, if the item in question is only within your budget based upon the net price reduction offered by the rebate, then you need to make sure that the rebate check dollars are allocated back into the corresponding budget. An additional caveat here concerns the shape of the budget ledger to be used i.e. how healthy is the balance? For example, you may have planned to buy a new DVD player and had money in the Home Entertainment budget to accomplish this. However, you incurred an unexpected repair bill on your TV, which put the budget into deficit. Hence, you may need to defer the planned purchase of the new equipment until you’ve moved back into the black rebate or no rebate.

Remember that with mail-in rebates, you have to be willing to pay the full price for the associated item, and then wait one or more months to get that rebate check in the mail. Hence your Budget System has to be able to “wait” for the rebate funds without undo stress.
Rebate Check planning - General
As with any form of incoming dollars, rebate checks will need to be deposited into one of your Accounts, and allocated into one or more of your budget categories. We should have a thought or two in mind as to the way we plan to use the rebate at the time of item purchase; however, since a considerable amount of time is involved between the associated purchase and the actual receipt of the rebate check, I recommend that you set up a process to manage this activity. Of course the default method of handling the rebate check would be to allocate it back into the budget from whence the associated purchase was made. However, even in this most basic case, one must remember which budget was involved. Hence, at a minimum, I recommend the usage of a Rebate List to keep track of such transactions – see topic below. If, on the other hand, we want to make immediate use of the rebate savings i.e. before we actually receive payment, then we need to consider the use of a special budget category called the “Rebate Well” see the topic below for details.

Considering the possible usage of the Rebate List and the Rebate Well, we have several options available. These possibilities are itemized below then brought out in detail under their individual topical sections.

1. Defer all savings considerations with regard to rebate checks until after the actual dollars arrive. Simply record the prices paid at time of purchase and handle the subsequent rebate checks as typical miscellaneous income when received. In this case, nothing special needs to be done from a budget management perspective.
2. At the opposite end of the spectrum from the above option is to immediately realize the savings on all rebates by use of the Rebate Well concept. In this case all rebates must participate in the Rebate Well.
3. Defer savings on the rebates, but unlike option 1 above, keep close track of each rebate applied for. This requires the use of the Rebate List ledger. Actual allocation of any rebate amounts is deferred until the check is received, but we can keep an eye on outstanding rebates so that we could make plans on their usage ahead of actual receipt. Also, we could initiate inquires on rebates that seem to be overdue.
4. Lastly, we can set up a hybrid of options 2 and 3 above. We can choose to immediately allocate the savings of some rebates such as for Holiday budgets where the savings could be put to good use right away, and defer others until they actually show up. In this case one would use both the Rebate Well for immediate savings usage, and the Rebate List for the deferrals. It is important not to confuse the two ledgers and keeping any given rebate on only one of the lists.
Rebate List - Detail
If you just want to keep track of outstanding rebates that you’ve applied for, then I recommend that you use the Rebate List form see page 378 for blank form and instructions. In this case, we don’t attempt to actually use any associated savings until the actual rebate check arrives in the mail. The budget taking the initial item expense, will not realize any savings associated with the mail-in rebate at the time the purchase is made. You can also use this list to indicate where you want the dollars from the rebate check allocated upon receipt. This would be especially important if you want to use the savings in a different budget category than the one were the initial expense was incurred.

Note, a Rebate List ledger is for information tracking use only and does not participate in the Budget System dollar totals or balancing process.

Rebate List Example: A typical Rebate List is detailed below. Note, the list should be in chronological order by date mailed. When you receive the actual rebate check, fill in the “Date Rec’d” column, which serves as a check-off and date reference. The “Amount” is the anticipated value of the rebate itself. Under the “Description”, include enough information to readily identify the rebate when it shows up. Also, if you specifically plan to allocate the rebate back into the budget where the initial expense was made, or in fact into any particular budget, then include the name of this budget category in the description field (see example below for mailed date 11/5/2005) where “Home Theater is specified).

Rebate List
Ledger Type: Rebates
Date Mailed Date Rec'd Amount Description
10/12/2005 1/5/2006 2.50 Light bulbs
11/5/2005 12/20/2005 3.50 DVD cases – Home Theater
11/14/2005 1.25 Batteries
11/20/2005 1/10/2006 15.00 CD editing software
Figure 38 Example of a Rebate List Ledger.

Tune in next week when we will take a look at Rebate Wells and how to use them to have your cake and eat it too so to speak.

Friday, September 15, 2006

Customer Service phone numbers

If you find yourself frustrated in navigating a seemingly endless number of web pages attempting to resolve an issue and can’t find a customer service number, then I recommend trying the website:
It contains an alphabetical list of many popular merchants and companies along with customer service telephone numbers. While these calls often start out with robot “assistants”, you may sooner or later be able to reach a real person. This is no panacea, but could be another tool to add to your information toolbox.

Sunday, September 10, 2006

Pennies from Heaven – Part 4 (Gift Cards continued)

We continue in setting up a systematic procedure for handling extra income that floats down from the sky. If you are just joining this quest, see Part 1. In this part we take our first look at treating Gift Cards as extra income.

Gift Card Usage
· Think about what Budget Category should receive benefit from the receipt of this card. As a gift, I recommend putting it to use in a budget such as your hobby or some other type of personal budget category. Use only one target budget for simplicity.
· Set up the Gift Card account ledger and enter appropriate information including actual starting available balance. If there is some type of activation fee, be sure to complete this activation so that you know exactly what your starting available balance is.
· Allocate the net starting balance as determined above into your identified personal budget category.
· Put the card into your wallet or where ever you keep your regular use credit card(s). You then want to use it as soon as practical i.e. the next time you would use a credit card. The only concern should be that it is a valid usage per the rules associated with the card, and that the expense is within your normal budget.
· Remember, you do not have to reserve use of the card only for your associated target personal budget. Gift Card account balances, like any other account balances are not associated with any specific budget category.
· For normal card use, any given expense would be deducted from whatever budget is appropriate, not the original target budget for the gift.
· If, along the way of using the card, you encounter any fees that are deducted from the balance, log these events into your Gift Card account and into the originally targeted budget. The net effect of such fees is to reduce the amount of the gift dollars.
· When the card is used up destroy the card as you would a closed out credit card. Residual balance, if any will be lost and should be expensed from the target budget category. The ledger account can then be closed and filed out side of our budget binder. Also, I recommend that you call the customer service number, speak to an operator and indicate that the card is used up.
· Once your balance gets lower than a typical purchase, it is important to keep precise track of the remaining dollars and cents available. To use the card in combination with another type of payment you will probably need to know the exact remaining balance available on the gift card. The point of sale won’t be able to determine the balance at purchase time, only if there is sufficient dollars remaining to handle a given partial amount. For example, you are purchasing items totaling $21.75, and your gift card has $5.75 remaining. Then the clerk would enter a partial payment of $5.75 first followed buy the rest of the balance due of $16.00. If your card only had $5.25 available then the first transaction would simply be reflected. Hence, before heading out to use up those remaining dollars, check the current balance via the customer service number or online.
Gift Card Example
Received gift MASTERCARD® card from ABC Bank with in the amount of $100.00. The last four digits in the card number are ‘1234’. There is no activation fee. Monthly maintenance fee of $2.50 kicks in after six months. The expiration indicated on the card is ‘12/2007’. Purchase date was 12/20/2005. The plan is to use the gift dollars in the Hobby budget category.

First, set up a Gift Card ledger with a name of ABC Bank MASTERCARD® 1234. Indicate the start date of 12/20/05 and the end date of 12/20/07. According to the instructions, a $2.50 maintenance fee will kick in after six-months, which would be 6/06. Call the customer service number to verify the starting balance. Fill in the date and balance on the first transaction line as 12/20/05 with a balance of $100.00.

Ledger: ABC Bank MASTERCARD 1234
Start Date: 12/20/05 End Date:12/20/07Maintenance Fee Date: 6/06
Ledger Type: Gift Card Balance Forward $0.00
Date Remarks X Withdraw Deposit Balance
12/20/05 Card Purchase 100.00 100.00

Next allocate the $100.00 value into the Hobby budget. Note, the previous balance is indicated as $150.25. The date of 12/25/05 reflects the date you actually received the gift card. The 12/20/05 date used in the Gift Card ledger reflects the activation date on the card for purposes of dealing with future fee and expiration issues.

Ledger: HOBBY
Ledger Type: Budget Balance Forward
Date Remarks X Expense Allocate Balance

……….. 150.25
12/25/05 Allocate gift card 1234 100.00 250.25

Now that the gift card dollars have been added into the budget and properly allocated into a target category, the actual gift card can be used for any budgeted purpose. See entries below. Let’s assume that the only item actually related to the Hobby budget is the 1/17/06 purchase of DVD movies. Subsequently, the card was inadvertently left in a desk drawer until 7/14/06! Upon checking the balance over the phone, a maintenance fee of $2.50 was discovered and added to the ledger. Note, the “Close” indicated on 7/16/06 was after I tried to use the card unsuccessfully in a split type of transaction where part would have been paid by the card and the rest with cash. Giving up on the small balance, the “close” is affected by simply destroying the card. The next schedule maintenance fee, 7/20/06 would have used up the remaining balance in any event. One needs to also reduce gift’s value by both the maintenance fee of $2.50 and the unused balance of $1.78 from the target Hobby budget.

Start Date: 12/20/05 End Date:12/20/07Maintenance Fee Date: 6/06
Ledger Type: Gift Card Balance Forward $0.00
Date Remarks X Withdraw Deposit Balance
12/20/05Card Purchase 100.00 100.00
12/28/05Groceries 12.55 87.45
12/30/05Sweater 26.75 60.70
1/08/06Carryout Pizza 12.55 48.15
1/17/06DVD movies 35.78 12.37

7/14/06Balance check after having
put card aside. Discovered
maintenance fee! 2.50 9.87
7/14/06Groceries 8.59 1.28

7/16/06After failed attempt to use
as partial transaction: CLOSE 1.28 ZERO

The Gift card Account Ledger is shown above. The corresponding budget ledgers would have also reflected these items as expenses. The DVD Movies, Maintenance fee and closing unused balance should all show up as expenses in the Hobby Budget.

Flip Side – Giving Gift Cards: If you plan to give out gift cards as presents, you should take into account your own experiences in using them. You should skip giving cards with “hassle” type fees, and/or are difficult to use. Ask for and take time to read the usage rules and regulations. Also, bear in mind the receiver. Avoid giving out general purchase cards to people who don’t use credit cards. In general, I recommend sticking with store specific cards where you are confident that you know the interest and tastes of the receiver. Such cards tend to have less hassles and potential fees.

Be sure to include any instruction booklet that came along with the card as a part of the gift. Also fill in the purchase date to make it easy for the receiver to set up and use. If you know that this person has little or no experience with gift cards, you may want to coach them a little on usage and fee issues. Remember, you want to your gift to be enjoyable, not a pain.

Gift Card Summary: Remember, the card most likely has maintenance fees that will kick in soon, so you need to start using it as soon as possible. Since you’ve established an account and allocated the funds available on the card to the budget you see fit, you can use the actual card dollars on any budget you choose. The only thing to remember is that its use should only be for items within your budget. This is no longer free-for-all money; it has been deposited and allocated into your budget system. I recommend that you physically put the card into your wallet amongst your regular use card(s). In that way you will tend to naturally use it. Just remember to appropriately record the transactions into the right ledger and to keep a watchful eye on the remaining balance. Also when planning to give out gift cards, remember the Golden Rule.

Tune in next week when we will take a look at Rebates.

Tuesday, September 05, 2006

Pennies from Heaven – Part 3 (Gift Cards)

We continue in setting up a systematic procedure for handling extra income that floats down from the sky. If you are just joining this quest, see Part 1. In this part we take our first look at treating Gift Cards as extra income.

Comes a Gift Card
A common item that is given as a gift these days is the Gift Card. Such a card is either associated with a given store/chain, or can be in the form of a “generic” VISA® or MASTERCARD®. It can be in any amount and usually can be used multiple times until all of the underlying dollars are exhausted. There is also some type of expiration date after which the remaining card value will be eliminated. From a budgeting perspective, this gift card or gift certificate should be treated as Income!

Store/Chain Gift Cards: Gift cards associated with a given store or retail chains are usually the easiest to use. There is no need to register them and most don’t have any fees or short expiration dates to worry about. You can get a current balance whenever you use the card at the given store. Splitting a transaction by combining it with cash or a credit card is usually not a problem. For these types of cards I recommend that you don’t set up any extra ledgers or other bookkeeping procedures. Simply use the card whenever it is convenient. If you don’t use all of the available dollars at one time, just keep the card handy for future usage.

To dedicate the card’s value to a given budget, do the following:

· Use the card to purchase good or services. If the expense was associated with the target budget, then nothing else need be done. Just enter the net expense amount in the target ledger. You may want to add a note per the savings achieved. If the card covered the entire balance, then no expense entry is needed.
· If the card was used for another budget category, then record the expense as a “transfer to” the original target budget and a corresponding “transfer from” as an allocation within the target budget itself. In this case, even if you had no actual expense i.e. the card covered the whole amount, you need to perform the transfer to move the dollars used up in the card from the budget used, to your target budget.

For VISA® or MASTERCARD® types of gift cards more work is needed, see the details below.

Registering Your Gift Card: Whether or not you go all the away and set up a formal ledger account, etc. I strongly recommend that you register your card. In this way you can readily determine the available balance, at the beginning and throughout the usable life of the card. Typically there is both a toll-free phone number and website included with the instructions. If you have day-to-day access to the Internet, I recommend going ahead and registering your card online. It will be much easier in the future in checking your current balance.

Registration is typically a two-tiered process with the first step setting up access to the card which will include some type of password that you choose and you will have to remember it. You may also be requested to enter the answer to some type of question such as your mother’s maiden name, your pet’s name, etc. This question and answer can be helpful if you forget your password in the future. The second-tier involves entering personnel information including your name, address and email address. If you don’t feel comfortable in entering these details, many cards will still let you access your balance. However, you may not be able to get help with a forgotten password, or expedited help with a loss or damaged card. It’s up to you if you want to enter the details needed in the second-tier. In any event, you should still be able to get current balance and recent transaction information from the customer service telephone number.

Step Zero: Receiving the dollars from a gift card, as income and subsequently allocating it into your budget can be a little tricky. Before adventuring into the set up and usage of a Gift Card Ledger, look at the amount of the gift card. If you plan to use the card up on one purchase that you already have in mind, and your purchase date is in the near term, then you may want to bypass the use of any special ledgers altogether. Simply make the purchase and use the card as a type of “instant rebate”. Then just put the net cost down as the expense within the appropriate budget category. You may want to optionally indicate that you encountered some savings with a gift card. For any other case however, I recommend the use of the Gift Card Account Ledger as detailed below.

Even if you choose to use the card for a quick one-time purchase, I recommend that you go ahead and “close out the card” i.e., destroy it along with any associated identifying information.

Note, you cannot use the same card as both an “instant rebate” and a Gift Card Ledger. Hold off on usage, until you make a decision, then stick with it. In general, I recommend treating “store specific” cards in the “instant rebate” mode, and VISA®, MASTERCARD® type gift cards with the Gift Card Ledger.

Gift Card Ledger Account: When you set up a Gift Card Ledger Account for a given card, you plan to incorporate the associated dollars formally into your Budget System. Treat this account like a checking account, not a credit card account. Since you are receiving income in the form of a gift, you will need to allocate these funds into a given budget. This budget is the target indicated on the account itself. Once you’ve completed the allocation process, the actual dollars in the Gift Card Account can be spent on any valid expense just like money in your other accounts!

One caution though, as detailed below, any fees or unused residual dollars associated with this card will need to be expensed back out of the original targeted budget category. This is really no different than having to associate bank account service charges or other banking fees as an expense in some budget category.

As an account, this ledger represents real dollars and should be included in your Budget System balance process.

For one-time type cards such as a gasoline type card with only enough for perhaps one fill-up you may only want to use a “sticky” note instead of a formal ledger. Put all of the identifying and date information on the note and the starting balance. Be sure to check the actual balance via the instructions included with the card. You can then allocate the associated dollars to whatever budget you choose and so document on the note. Use the card at the next opportunity to by gas which should deplete the card. If there is a residual balance, so indicate on the note and finish it off on the next purchase. As with other cards, the budget associated with the actual expense is the one to get debited. Once finished, you can “close” the sticky note, but you may want to hang on to it for a month or so, then dispose of it.

Special Balancing issues: I recommend that you periodically check the remaining balance on your card using the toll-free phone number or website that should have been included in the card’s instruction sheet. Transactions should post very quickly and there are no paper statements to be received. Hence, balancing this type of account is like balancing a Cash Account except that the amount you are balancing against is not the cash in your wallet, but the balance indicated by the disembodied voice on the customer service line or the value indicated on the website. As with a Cash Account, use the Check column for all transactions currently listed at that time. If any fees have been incurred you need to determine their validity, itemize them (check-off) and update your ledger balance accordingly.

Dos and Don’ts: Listed below are some basic considerations for your card that you need to check out as soon as possible or just be aware of in general.
· I recommend checking your balance right away, even though the card’s value should be included in the gift packaging i.e. “stuff happens”. Your instructions should include a toll-free telephone customer service number and possibly a website that will allow you to check your balance and recent transactions.
· Although you should sign your card right away, be careful not to write over the security number in the signature line on the back of the card. You will probably need this number to access the balance and transaction information using the phone or website.
· Be sure to read both the large and fine print documents that should have come in the package before attempting to use the card. The card agreement is typically not as difficult to follow as a normal credit card agreement. If you didn’t receive any instructions, ask the person who gave it to you or call the bank printed on the card.
· Plan to use the card within the first week of receipt to make sure it works, and to get into the groove so to speak. Remember, you’ve already allocated the actual amount of the gift card to the budget you desire. Your actual usage of the card can be on any valid (within your budget) purchase.
· The card probably cannot be used in an ATM or at a financial institution to obtain cash – check the instructions.
· The card probably cannot be used in an automated machine of any kind such as pay at the pump for gas; although you could usually take it to the cashier for payment after filling your tank. An exception to this rule could be Gas type cards issued by a specific company; however prior to attempting to use them at the pump, check with an attendant.
· Don’t use the card to pay for recurring fees e.g. monthly fees for Internet usage, etc.
· Any merchant who accepts credit cards should accept the card; however, you may run into problems. You should always be ready to decline the purchase or have a readily accessible alternate way to pay for the purchase e.g. a credit card, check or cash. Note, in the case of purchases that you can’t decline, like a meal that you’ve ordered and eaten, it is vital that you have an alternative payment capability.
· The card may or may not be usable for telephone or Internet purchases, check the instructions first.
· There is typically a warning that you may have a problem using your card to partially cover a purchase i.e. you need to include additional funds via cash, check or a credit card to complete a given purchase. This situation is sometimes called a “split transaction”. When faced with this situation, I recommend that you check with the merchant prior to initiating the purchase or be willing to use an alternate funding source to cover the entire bill.
· More on split transactions: if you are not successful in using your card to split a given transaction don’t give up on the remaining balance. I recommend that you try and try again at other stores. The problem may be in the sophistication of a given merchant’s credit card processing equipment or a lack thereof.
· If the card is reloadable (allows one to add additional dollars to the balance), there is typically a fee for this “privilege”. To avoid this additional expense treat the card as if it is not re-loadable and simply close it out when all of the funds are gone like with a non-reloadable card.
· The card typically has an expiration date one or two years into the future; however, an account maintenance fee usually kicks in after the first six months or so from the issue date. Again, see the instructions.
· After the expiration date, or upon request for termination, the card may have a cash redemption feature. Please note, however, that there is most likely another fee associated with this action – check the instructions.

More on Fees: There are usually some potential fees associated with card usage. Listed below are typical examples. Check your card’s instructions for specific information.

· A monthly maintenance fee will usually kick-in at some point. Six months after the issuance of the card is common. Upon reaching this point, when the card balance dips to the monthly fee amount or less, it is basically used up.
· After the expiration date you may be able to request a refund within a certain specified timeframe, however a redemption fee will most likely be deducted – check the instructions. Of course, if your balance is at or below the redemption fee, no refund will be issued.
· If you request a refund before the expiration date, the redemption fee also applies.
· There is probably an Overdraft fee i.e. you put a charge on the card that exceeds the available balance. Be sure to keep track of your balance to avoid this situation.
· There is probably an “Unauthorized usage fee”. It can kick in if the card is lost/stolen, or you used the card for an unauthorized transaction. Check the instructions for a list.
· International currency conversion fees. If you use the card outside of the USA, your transactions will be subject to currency conversion fees like for any credit card. See topic on travel issues for more info on page Error! Bookmark not defined.. I recommend not using the card for this purpose as it could cause overdraft issues if the transaction amount is close to your available balance.

While expenses paid for by the card should be documented within the specific budget category associated with the purchase, any fees encountered while using the card should be expensed from the originally targeted budget category. It is not clear, how the issuer will collect fees in excess to the value remaining on the card e.g. overdraft and unauthorized usage fees that are more than the value of the card, but you are in fact liable! A statement is typically included with the card agreement that the issuer can bill any other account you may have with them or an affiliate e.g. an actual credit card. Hence I recommend that you take action to report the card lost/stolen quickly like you would for any credit or debit card. Also, take care to destroy the card when it no longer has any funds left.

State Regulations regarding Gift Cards: The National Conference of State Legislatures has web pages devoted to recent state laws and legislation regulating gift cards. Check out the web page:
for information on your state. The best way to use this site is to do a find on your “statename”. This will jump you to the various sections relevant to your particular state. There will first be a table of recent legislation followed by laws enacted year by year for the last several years. For example to a Find on “Michigan” followed by a Find-Next to go to the previous year and so forth. For specific laws, there will be a link to the detailed narrative of the law itself.

In the next part we will continue with more information on using Gift Cards.

Sunday, August 27, 2006

Pennies from Heaven - Part 2

We continue in setting up a systematic procedure for handling extra income that floats down from the sky. If you are just joining this quest, see Part 1. In this part we look at credit card cash back.

Credit Card Rebates

Some credit cards include offers for cash rebates on purchases. First of all, you should only be using zero-balance credit cards for ongoing purchases i.e. you are paying off the full billing statement balance each and every month. Hence any rebate money is indeed extra available dollars.

Such rebates typically take the form of actual cash set to you via a check after some minimum amount is accumulated ($50.00 in rebates is a typical minimum dollar amount). Since these rebates are not tied to a specific purchase, such rebate checks should be received as new income and allocated as desired. Note, only allocate the dollars after the rebate check is received and deposited into an Account as with any other income source.

However, some credit cards give you the rebate as a credit against your next billing statement. In this case, the cash saved is from the reduction in the actual bill to be paid verse the total purchases billed. These saved dollars are not “re-received” into your Checking Account, but simply don’t leave. Hence there is no income to be deposited, but only dollars to be re-allocated back to one or more Budget Categories of your choosing. Such allocations should be given some type of identifying reference such as “Credit Card billing rebate” to help in any future research.

In Part 3 we will take a look at Gift Cards.

Sunday, August 20, 2006

Pennies from Heaven - Part 1

Income is where you find it

Some of us haunt the papers for coupons and rebate deals of various sorts. Also gift cards have become popular during the Holidays or in various promotional deals. What about that folding money discovered in an old pair of pants? The processes below formalize the handling of these “pennies from heaven”.

Somewhat more complicated is the disposition of coupons, percent off deals, rebates and gift cards. These topics are discussed in more detail below. However, before considering using these arguably convoluted strategies to redirect saved money, think about whether you would just rather leave the savings where they lay i.e., don’t do anything special. In the case of the coupons and percent off deals, you could just record the reduced cost transaction and be done with it. In the case of the gift card, you could do the same either recording the reduced cost of associated purchases, or if the card covered the entire purchase, just don’t record anything at all. However, for mail-in rebates, you will get actual income in the form of a rebate check; therefore you will need to go thru the income receiving and allocation process anyway.

Even if you want to leave the savings where they occur, you may still want to go through these extra steps to allocate the pseudo income and then expense it. An example would be the receipt of some type of gasoline card for example: when purchasing a new vehicle. The inclusion of a two hundred dollar gas card could take a sizable chunk out of your near-term gas budget. If you just use the card without recording the “income” and expense, then you will not get a complete picture of your actual gasoline expenditure during the period in question. A clear picture of actual gasoline usage could be helpful in projecting needs for say the next budget year. An artificially low figure could distort your actual needs for the next yearly cycle.

Loose Change
First, I recommend keeping your “loose change” in play and not be tempted to just dump it in a coffee can. Such change, unless it’s from a physical bougette, is still in your Budget System and should be made available for future purchases. Change from a physical bougette should be used for appropriate expenses too. Loose change can quickly become unwieldy if allowed to accumulate. Therefore, the best solution is to spend it as soon as convenient i.e. carry it around with you instead of pushing it aside. Use a change purse, or a cup holder in the car to make it readily accessible. In this way, the change shouldn’t accumulate too much.

If you actually find money in your old clothes, purses, etc. then, after giving thanks, just put it into your cash account and allocate the dollars into one or more of your budget categories. The same process should also be done with cash gifts.

Big Bag of Bottles and Cans
If you live in a state with a bottle-can deposit law, then you probably build up a collection of eligible items. A garbage bag in the garage, or behind a door, or in a pantry corner is full to overflowing with a motley collection of pop (soda) and beer cans and bottles. Once you get around to dragging them to the store, there is a big lump of available cash to spend! Often such found dollars gets absorbed into the associated grocery bill and as such doesn’t actually show up as available income. Since the source of the deposits in the first place was probably the same budget as is being used for the current grocery purchases, this is okay and as such needs no separate documentation. However, if you had made a significant (like in several cases) purchase of beverages for some special occasion that was covered under a separate budget (e.g. Entertainment), then you may want to take extra care to allocate the deposit returns back into the appropriate budget.

Specific Example:
You have a graduation party for your kid. Funds for the event are expensed from your Entertainment Budget. Included in these expenses are the deposits for one hundred cans of soda at ten cents per can or $10.00. At some later point in time you end up taking the empties back to the store as a part of a routine grocery run. Your grocery bill comes up to $35.67 less the $10.00 return for the empties giving a total due of $25.67. If you let nature take its course so to speak, the Grocery Budget would simply benefit from the $10.00 in returned cans. If you instead wanted to return these funds back into the Entertainment Budget, simply do a T/T – T/F (transfer to – transfer from) of $10.00 from the Grocery Budget into the Entertainment Budget with a comment of: “graduation party can deposits”. This would then reflect the true cost of the groceries ($35.67) and return dollars originally expensed for the deposits back to their rightful place (Entertainment Budget).

Return of Cash
You faithfully order some stuff from your kids’, niece, grandkid, …, but for some reason the order went awry. Your money is returned! Since you’ve already deducted these dollars from your account and one of your budgets, you will have to reintroduce these funds to your budget via income received, deposited into an account and allocated back into a budget category. You probably would want to allocate these funds back to the budget ledger from whence they came, but you can put it anywhere you please. I would recommend including comments in the remarks column describing where the funds are coming from. You may want to include the date and category (if different) referencing the original expense item.

Of Coupons, Percent off deals, and Rebates
Opportunities abound to “save” money on various purchases with coupons, percent off specials and rebates. When you actually save money with these kinds of offers, you may consider redirecting your savings into other Budget Categories if desired. Hence savings in groceries could mean more money for your Hobbies! However, first of all you need to determine if the “savings” are real from your perspective:

1·Is the item in question something you truly want/need and is covered in your budget? This is always an important question to ask before buying anything, and the answer should always be Yes for a purchase to take place.
2·Would you consider purchasing the item at its normal price tag? A Yes here means that you are in fact saving money.
3.Is the corresponding Budget Category in good financial shape? This means that the Budget is certainly not in deficit, and its current balance looks like it can handle other foreseeable important expenditures. A Yes here is also important. We don’t want to go out to the world backwards “saving” money on non-essential purchases within a Budget Category that is currently on the ropes.

A Yes to all of the above questions means that you’ve truly saved money on the given purchase. This saved money can simply remain in it’s existing budget bag which is the default if you don’t do anything extra, or it can be moved somewhere else. For example, you may be more motivated to scour the paper and junk mail for coupons and deals if you were going to take the money saved and do something special with it such as put it toward that next cruise!

For instant-rebates, coupons and percent-off specials the savings is immediate. The extra dollars are in your budget system right now.

Example, you buy some household type items at 50% off for a total savings of $20.00. The savings is immediate and is reflected in your budget by the lower cost that shows up in your ledger. If you had planned on paying the original price and the coupon/percent-off deal was just a windfall benefit, then you could choose to allocate all or some of the $20.00 savings into other budget categories. Use “T/T” in the Household budget to transfer funds (up to $20.00) to one or more other Budget Ledgers: Vacation perhaps? The receiving Budget Ledgers would have a “T/F” Household entry. You should also include a note in both the T/T and T/F entries of why the transfer is being made (something like “windfall”). At the end of this process, the savings made on the purchases would reduce the Household balance and it would appear that you just paid the regular prices. Your Vacation budget would show an increased balance reflecting a redirection of the savings you obtained in your household purchases.

Note, if it was an instant rebate, then treat it like a coupon and proceed as outlined above except that you will probably pay sales tax (if any) on the pre-rebate price. If a real rebate check is involved, then I recommend that you take the approach outlined in the topic: Rebate Well - Detail on page 175.

Taking these extra steps can allow you to see the positive efforts of clipping those coupons, waiting for the special deals or mailing in those rebates! Especially by transferring the saved dollars into one of your oft-neglected categories or into a troublesome (deficit laden) category.

Five Dollars off for a limited time
Received a coupon for $5.00 off your next purchase of $25.00 or more. But must use by a date a month or so away. Great, but you need to plan this out carefully. Such a coupon is a great percentage off, but use it wisely. You will want to purchase items that you would normally have bought anyway at the prices available. Then you will receive the true benefit of the savings. Let’s say the coupon is for the local hardware store. You already shop there on a routine basis for say light bulbs, batteries, hardware, paint stuff, and so on. The present issue is whether or not you need $25.00 or more worth of such stuff within the allotted timeframe? If you are real lucky, you maybe just getting ready to go to this store and have a list totally at or above the $25.00 minimum required. Otherwise take time to make a list of needed items. Start this list right away after receiving the coupon. Waiting to the last minute (the expiration date) can result in a missed opportunity to save or worst, to buy items that you don’t really need just to get the savings. I recommend posting the list in a prominent place and let other family members put in their comments and recommendations. In this way, you can accumulate a list of needed items that total up at least to the required minimum. If you include the potential purchase of items that you would normally buy somewhere else then confirm that the store in question has a reasonable price compared to where you would normally buy the given item(s). Once you’ve reached the magic number, go ahead and use the coupon. There is no advantage to waiting unless it’s a percentage off total deal instead of a fixed dollar amount. Important: if you just can’t get to the required purchase total, then let the offer pass on by.

Next: We'll consider Credit Card Rebates and Gift Cards as Income.