I got a snazzy little brochure from Best Buy the other day detailing how at the end of July the company is going to switch the provider of my financial benefits over to some other company.  I still have a 401K through Best Buy, and I haven’t done anything with it since my termination.  I figured it was safe for now, until I get settled and start looking into doing something with it.

Since they are switching things around, I figured it was time to get my money.  My plan is to go to my bank and have the 401K switched over to an IRA or some other kind of interest-bearing account.  There isn’t too much money there, less than thirty thousand, but it’s a good start.  Since I don’t work for Best Buy anymore, that money isn’t doing me any good just sitting there with no income flowing into it, so today I set about getting access to the account to start the process.  To my amazement and my fury, I can’t get to it.

Best Buy has a benefits website that is a portal to all things money and benefit related.  This website used to be great, because it was a one-stop-shop to all my information.  I say it used to be great, because I used to be an employee.   You see, this website requires an active employee number and password to access.  Two things which I no longer have. 

Unfortunately, the website used within the company is the same website used outside the company.  My 401K information is safely locked away in a website I can no longer access. 

At the bottom of the log in page, there is a little section that says "for former Best Buy employees."  OK, I’ll just click that and all will be right with the world.  WRONG!  Guess what that link does?  It takes you to a LOG IN PAGE THAT REQUIRES AN EMPLOYEE NUMBER AND PASSWORD!  AHHHRGH!  You can even see for yourself.  Go to http://www.mybbyrewards.com and scroll to the bottom, where it says "If you are a former Best Buy employee."  Click it and tell me if that’s not the most asinine thing you’ve ever seen?

Luckily, the wonderful color brochure I received also includes a  number for helpful customer assistance via telephone.  I cheerfully dialed this number, making my way through various unrelated menus and attempting to follow the instructions of someone speaking a completely unintelligible Indian accent, when I finally came upon a menu containing the information I need.  I pressed the number, and waited for the computer voice to give me further instructions.  Much to my chagrin, but not my surprise, accessing my information via telephone requires an ACTIVE EMPLOYEE NUMBER AND PASSWORD.

I’m thinking there must be some sort of legal recourse here.  They can’t just hold my account hostage like this simply because I’m no longer employed there.  I want my money.  Furthermore, I’d like a level of service that isn’t completely idiotic and impossible.  Is that so much to ask?

I’m off to try and find an actual human being to scream at now.  They better not even ask for an employee number.

I’m not rich by any stretch of the imagination, but over the years I’ve come to a good understanding about money and how to save it.  That’s not to say I’m any kind of expert or anything, I just happen to be blessed with good financial luck.  Maybe it was my frugal upbringing, maybe it was going broke when I was younger, or maybe it’s just pure fear of not being able to get by in the world.  I don’t know, but for anyone looking for advice, I think I can offer some.  I can’t say that any of these strategies will work for everyone, but they work for me.

My method is as much psychological as it is physical.  That is to say, there’s an element of fooling yourself about money in your attempt to save it.  I’ll explain presently.

Direct deposit

If your employer offers a direct deposit program for your paycheck, USE IT.  If you get your paycheck in a little envelope and take it to the bank to cash it, you’re more likely to take all or some of the cash with you when you leave.  Don’t do it.  Direct deposit forces you to put the money in an account.  You don’t touch it, unless you physically go and draw it out or use your ATM card somewhere.  When I was gainfully employed by The Man, I had a percentage of my check split between two different savings accounts, and the remainder went into a checking account.  By doing this, I was never tempted to keep any out and spend it right away.

The Coat Pocket effect

This may be my biggest secret, and possibly the reason for my success in saving money.  I have it spread out over a lot of places.

I learned this by accident when I was a kid.  My Sophomore year in High School  I won an art contest sponsored by a local bank.  The prize was a savings account with $15 in it.  Not much money, but hey… cash is cash.  They presented me with a passbook to my account and took my picture (along with the other two winning places) for the local paper. 

After years and years had gone by, I forgot about that account completely.  I never once checked the balance or made a deposit or withdrawal, or even stepped into the bank for that matter.  I don’t even know if the place still exists.  The money itself has gone into unclaimed funds.  That much I know.  I suppose that on a balance of $15, given interest over 20 years, there’s probably $20 in the account now.  I don’t know, but I know I still have that passbook. 

I call this the coat pocket effect.  Have you ever slipped on a coat for the first time during the winter and discovered some money stashed away in a pocket?  Maybe a $20 that you forgot about?  It’s a great feeling, and it gave me an idea about how to save money.  If you put money in interest-bearing accounts in several different banks, eventually you’ll tend to favor one.  That favored bank will become your main source of traffic, and the other accounts will just sit, untouched, and grow. 

I know you’re probably thinking this is stupid, that it would never work for you.  Well, maybe it wouldn’t.  Remember how I said that (for me) saving money was as much psychological as physical?  Over the years, I set up accounts with different banks in different places.  Of course, I had a bank that I preferred, and I tended to go to it on a regular basis.  The other money I had stashed away elsewhere just kept growing.  I didn’t forget about it necessarily, I just didn’t need it.  I had my primary source of funds in one place, and secondary sources in others.  In my mind, my primary bank was the only money I could use, and the other accounts were just for saving.

Your credit card is killing you

Pay off your cards.  Save one, the one with the lowest interest rate, and cut up the others.  I remember extreme pleasure the day I finally paid off my cards.  It took me over a decade, and I went broke once in the process.  After that lesson, I did whatever it took to pay them off.  I used a method called “rapid reduction”, which means once you pay off one card, you add that same amount to the other cards monthly, instead of backing off just because you finished one.  At one time I had two ATM cards and four credit cards.  I now have one of each.  Bending those paid-off credit cards back and forth and ripping them in half was pure joy.

Another example of the multiple-account thing.  I have a credit card with Bank of America.  Because of that, I opened an interest-earning account with Bank of America for one purpose only… to back up that credit card.  That money gets used for nothing else.  I set up my direct deposit to put $100 of my paycheck into that account every month.  A pittance, really.  That money grew quickly, and whenever I used my credit card, I paid off the balance using the account I specifically set up for it.  When I made a purchase with the card, I made sure there was enough money in the account to cover it.  That way, I never got behind.  After a few months, that balance goes back up again.

Use Quicken

Quicken is god when it comes to money.  I know at all times, to the penny, how much money I have in my accounts.  This is because I can use Quicken to link up to my bank accounts and my investment accounts via the Internet, and download updates whenever I want.  I also manually enter bills and such when I pay them, and reconcile the accounts using Quicken on a weekly basis.  I’ve been using this software daily since 2002, and I have a running account of where all of my money in that time has gone, complete with charts and graphs if I so desire.  I know how much I spend on this and how much I spend on that, different trends, and much more.  I know this sounds like a commercial, but believe me.  If you use this tool properly, you’ll have superb control over your finances.

It’s not that you don’t make enough money

You’re broke because of your attitude toward money.

If you live paycheck-to-paycheck, you’re doing it wrong.  Something, somewhere, is set up wrong.  Maybe your car payment it too high.  Sell it, get a cheaper car.  Maybe your rent is too high.  Move to a cheaper place.  There are ways to save cash, and when you do, save it.  Don’t spend it.  Sure, you may be uncomfortable for a while.  Maybe you’ll drive a shitty car and live in a dump for a few years, but at least you’ll have a bright light at the end of your tunnel.  The more you suffer today, the more you’ll appreciate it later.  Ramen noodles aren’t really that bad.  I will GUARANTEE you this:  If you continue to live paycheck-to-paycheck, you will NEVER get ahead.  You will NEVER have the things you want, and you will NEVER get out of whatever rut you’re in.

You can start a savings account with a dollar.  Go to HSBC.com and set up an account.  Put as much money as you can into it, and when you have some extra cash after bills and such, but some more money into it.  Right now, the interest rate is 3.05% for a savings account.  That’s pretty good.  For every $1000 dollars you have, you’ll get about $3 dollars per month in interest.  Way more than you’ll get at a local bank.  Here’s the key though, don’t use this money for anything.  Ever.  Set up a different account at a different bank for your day-to-day living expenses.  Your HSBC account is not for withdrawals.  Just keep adding money to it.  A little here, a little there.  You’ll be surprised how fast it adds up.

If you live paycheck-to-paycheck because your parents did, and all your friends do, and you’ve never lived any other way, then you’re in for a long fight.  I can’t tell you how to live, but I can say that you’re working too hard.  Life isn’t about busting your ass for every single little thing.  That’s old-school bullshit.  You need to work hard to build momentum, then as some point, you relax and have the things you need and want as a by-product of that work, not as a direct, day-to-day effort.

How I do it

I got fired three months ago.  It was about time, I suppose.  I’d been with that company for ten years, and it sucked the life out of me.  It wasn’t a bad job, but it was soul-crushing.  When my first-grade teacher asked me what I wanted to be when I grew up, I’m pretty sure it didn’t involve a plastic nametag, a blue polo shirt, and endless hoards of mindless cretins asking me stupid questions everyday.  Since then, I’ve casually looked around for a job, but I keep coming back to the same answer.  I don’t want another “job”.  I want to do something that interests me, something from which I can gain a sense of fulfillment.  I suppose I could walk into another retailer, get another plastic nametag and another colored polo shirt, but that wouldn’t be what I want.

So how have I gone three months, living in a fairly expensive place, maintaining my same lifestyle, without a job?  A combination of planning, hard work, and fortuitous circumstances.

First the luck:  I got a decent tax return this year.  That was a good thing, because not only was it sizable, it came at exactly the right time.  I did my taxes early in anticipation, and it paid off. 

Second, the hard work:  After ten years at my previous employer, I had  amassed some great benefits, not excluding stock options.  Ten years of toiling away in mindless labor resulted in a nice little package of investments that had grown with my tenure in the company.  When I got canned, I cashed out.  It wasn’t a ton of money, but it was a decent amount.  I earned it.  I also received a check for my unused vacation hours, and after a decade of service, I had more hours than anyone else.  

Last, the planning:  As noted in all the previous paragraphs, I’ve developed a strategy and an attitude about money over the years.  I have my money spread out over different accounts, and I have accounts set up to back other accounts, like my self-sustaining credit card.  I have money that I don’t touch, because I’ve set up one specific account that I use for all of my day-to-day needs, and it’s the only one that’s fluid.  This process is the result of years, nay, over a decade now, of planning.  Failing on occasion and succeeding on others.  I have high-interest savings and checking accounts.  I have investments, mutual funds, and a 401K.  I even have a little stock left in my former company, but they can’t seem to get their heads out of their asses, so that stock only provides amusement to me now, as I see it swirling down the toilet bowl of financial ruin daily.  I have these things, and I started with nothing.  Less than nothing, actually.  I was in debt until I was 30 years old.

I’m not so stupid as to think this money will last.  I know I need to find employment somewhere, but I want it to be on my terms.  We’ll see.

Recap

In a nutshell, here’s how to save money.  At least, it’s how I save money.

1. Use direct deposit.  You’re stupid if you don’t.  There are so many benefits, and no down sides.  Not only will you have a means of saving some of your money, you’ll have it at your disposal any time.  Think of it as a tool to direct money to different places in different amounts.  It can sustain all of your accounts with no effort on your part.
2. Put it away, in different places.  Never put all your eggs in one basket.  Spread it out.
3. Have one main account, but several other accounts.  Use that main account for everything.  Your smaller accounts should be set up to back up other expenditures, like credit cards.  Have at least one pure, high-interest savings account that you only put money into.
4. Have one credit card.  Use it sparingly.
5. Take advantage of what your employer offers.  Invest in your 401K, sign up for the company stock plan, and learn about company matching.  It might hurt a little now, but you’ll be thankful later on.

A few more words:

1. Money is an attitude.  If you think of it as finite, you’re not thinking dimensionally.  Money invested properly can grow more money, without any ongoing effort.  Too many people work for every dollar, when they should be working for a dollar, and in turn, that dollar works for two more on its own.  Living paycheck-to-paycheck will never get you into a position to live otherwise.  Break out of that habit.
2. If you need it, buy it.  If you want it, and you can afford it AND it brings you some fulfillment, buy it.  If it doesn’t meet either of these conditions, leave it alone. 
3. My generation will never be able to retire in the traditional sense.  Until now, you worked until your mid-sixties, then you “retired”.  Not for us.  The Baby Boomers will use up all the Social Security, and the government hasn’t a clue how to change it.  There are far too many types of opportunities that my generation has that our parents didn’t though, and we need to capitalize on these.  Now, before we get old.  There will be no traditional “retirement” for us.
4. A penny saved is a penny earned.  One of those pennies invested properly is worth several pennies earned, and you didn’t work a bit for it.

Good luck!