Archive for August, 2008

Life Saver Emergency Funds

Last week, I got hit by sudden financial storm which put me a on state not allowing to concentrate on posting the blog. Now, I am back safely without any credit injuries, I really like to share my story about the Life saver incident. I am sure many of you experienced or experience this sudden financial crisis which hit us without any notice. I know it is not an easy task either to escape or get out safe and sound if you aren’t plan and prepared for it.

Delay in my Contractor job payment delay, my truck is about to breakdown and needed immediate fix and a must to do medical procedure for my son all of them hit me hard at the same time. I got in the midst of the storm and there is no escape other than take the hit but protect myself. I wouldn’t have taken that chance, if I didn’t have my saved store emergency funds.

It was like wearing a life jacket in a flood water which is rushing fast and won’t last long. Life jackets are safe and it will help to float and be on top of water without getting drowned. Emergency funds are life jacket/lifesavers to our financial life. I know I am using bit too much analogies today but I like it put this in a way so it makes real sense and shows the importance of the topic.

Alright, What is an Emergency Fund?

As I was saying, I like to call it as a lifesaver fund. Life obviously will have unexpected happenings. There are plenty of situations like I mentioned which will hit us without any prior notice. You don’t have any choice to take on the expenses. You can try your best to postpone those expenses but some medical and emergency situations can’t be postponed. In those tough times, you really need to have some funds available to depend on to take care of it. These funds are emergency funds.

Why do you need it?

Life hits us hard at times and nobody knows when and how. It is better to take the precaution and be prepared. Instead of waiting for it happen and figure out at the time. So it is always good to save up some money for those emergency situations. I know lot of people are struggling to even meet their ends at the tough economy crisis and it might be tough to save for any funds.

If you are one of them, I would recommend to consider at least put away your tax refunds or any bonus payments as emergency funds. It will surely help you. Instead of depending on the plastic money(credit cards) and racking up the balance in that account which will hunt you down later. It is good thing to have a store of money to help you.

What are types of emergency fund?

It depends each individual. I have 2 types of emergency fund setup right now. Medical and Emergency funds in a savings account. I also have 3 more savings account just for the purpose to handle any Short term, Home and other unexpected expenses. I put away $100 a month on the 2 accounts and at least $50 on these 3 accounts. It eventually adds up and at year end I just put them in a CD which I can take out anytime with or without penalty. Also if my credit card gets hit by these sudden expenses, I just draw the amount according to the expense from these accounts and pay it off.

How much do I need as Emergency fund?

a tough questions since it also depends on each individual. Many experts recommend at least 3-6 months of your monthly expenses. That might be a bigger amount to target for starters. So I would recommend at least start putting something away like $25, $50 or $100 every month and set a goal to reach around $1000 in a year or so and move up the limit if you haven’t used up your savings.

Just put your money in a savings account that way at least you have some interest for the amount every month and helps your money grow. It also helps to access the fund easy and faster.

Emergency fund is such an important aspect for a financial life avoiding stress and frustration which don’t really need at the time of emergency situations. So start thinking about it and save up for the hard times. You will surely appreciate my post when it happens.

Special Interview with guest, Founder of

Hi folk, this week post is going to be an interview from special guest Shreyas Nanavati (MBA, Vanderbilt), founder of, an on line budget and lifestyle advisory service, and the BudgeFree for Life System. He accepted my request in a short notice to talk about his model for you readers.

I met him a week ago and we had an interesting conversation about money, life and budget and so much more. I was so surprised to meet a person who exactly reflected my thoughts on Budgeting and money management ideas. So I wanted him to do an interview with me to share his ideas and introduce to you all about his model.

Shreyas, Welcome and Thanks for talking time for us.

Shreyas>>It’s my pleasure vijai.

Let me start by asking you,
What made you to come with this Balanced Life – Budget model ?!

Shreyas>>I wasn’t a budget guru until I experienced my job loss. After a few days of sleeping in, I became restless. I created a daily routine that included having someplace to be in the morning – as if I had a job – and I made sure two or three objectives were accomplished daily. The other thing I did was keep a journal of this experience: standing in the unemployment line, attending networking events, sending out resumes, working through my finances, making sure I meet my social and emotional obligations, etc.

One morning I was typing in my journal and the dots connected – without a job I choose to organize my life in a manner similar to Maslow’s Hierarchy of Needs. This hierarchy encompassed every facet of life and if broken down into individual expenses it shows us how the money we spend, the money we build and the life we lead impacts our overall well-being. From this experience, I created the BudgetFree for Life system which became the foundation of my website: Budget Advice for a Balanced Life.
Vijai>>That is an interesting story.

Can you kindly, explain more about your model for my readers? Sheryas>>Maslow’s Hierarchy categorizes an individual’s needs into five levels: physiological, safety, social, esteem and self actualization.

Physiological are basic needs – food, warmth, water and other necessities critical to our survival. Safety needs represent our desire for a predictable, orderly world secure from injustice and uncertainty. Insurance – auto, home, health are examples of safety needs. So is a professional and financial security.

Social needs emphasize our desire for belonging and acceptance. They can range from participation in organizations (professional clubs, support groups, religious affiliations) to intimate personal relationships (family, friends, partners).

Esteem represents our need to be respected by our self and others; our desire for recognition, to participate in activities – professional or personal – that bring a sense of contribution and self-worth.

With this structure, the BudgetFree for Life system is able to determine how your monetary decisions fit to the hierarchy – what levels those decisions attempt to fulfill. You can read more about it on my website:

It like
pyramid system of meeting each levels first to move on to the next level? That means, we never go above the next level if one level is not satsified. Don’t you think thats stops you from moving above the ladder?

Shreyas>>That’s not correct. Life is not this black and white. It’s true, Maslow believed lower level needs had to be met before higher levels could be pursued, but I believe fulfillment should occur in unison. Another point I would like to make, the hierarchy is a foundation for a balanced life. This includes, but is not solely focused on wealth. The definition of wealth will vary on an individual basis.

Tell me how is it different from the usual mantra of budgeting we all hear out there?!
Shreyas>>There’s a saying: you can take off the good ingredients off of a pizza and it’s still a pizza, but nobody will want to eat it. The same is true for life – we advocate a balanced life. The hierarchy is a foundation for balance, a philosophical approach that helps you create a budget and a lifestyle to ensure each level is being enriched.

Our approach was unlike anything else I’ve read. It’s simple yet holistic. The pyramid crystallizes an approach to life in a neat and easy to remember system. You don’t have to clip coupons, crunch numbers or learn how to use a general ledger. You can it you want, but you don’t have to. Believe in the system, practice the system and you’ll find ways to reduce expenses and build security without thinking about it, without negatively impacting your lifestyle. The numbers work themselves out.

Really, I might have to try myself and check it out.

Tell me, how can one start savings even they are struggling to meet their needs?! Gimme some examples which you use this model practically in your life?
Shreyas>>You asked a simple question, but I want your readers to understand short-term answers are easy, long term meaningful change requires an understanding and transformation of behavior and habits. Working through the system helps you understanding what your expenses, savings and actions aim to fulfill.

On my website you can download a laundry list of suggestions broken down by categories within each level in the hierarchy: .

Now, let me answer your question. Sometimes we find big expenses that can easily be replaced with an alternative activity and still maintain balance. More often it’s a culmination of minor adjustments – finding bits from multiple areas where you are leaking cash.

For example, building a social life around experiences – entertaining friends, outings to the park, pot lucks instead of socializing a restaurants or bars. A few other examples:
· Physiological: Self auditing your energy and water consumption (see my August newsletter)
· Safety: Evaluating the benefits of add on features in many utilities – cell (ringtones, text plans, internet plans), TV (premium versus basic), internet (high speed DSL versus low speed DSL), home phone (caller ID, call waiting, long distance), alarm (ADT versus NextAlarm or other online services), etc.
· Safety: Modifying your driving habits (see my July newsletter on how to become a hyper miler).
· Social: Developing strategies to fulfill our social needs in a more cost effective manner (visit my website: for a list of suggestions).
· Esteem: Participating in altruistic pursuits (volunteering, for example) versus the accumulation of high-end material goods. Another tip, I tell my clients to annualize their expense. For example, a morning coffee at Starbucks is only $3, but annualized it can exceed $1,000/year.

If you visit my BudgetFree for Life page, you’ll see an example at that bottom that can save $1214 from basic utilities without neglecting any of your needs.

That is some good tips. Do you provide any service to help people get on to this model?!
Shreyas>>Absolutely. I love helping people and I believe a balanced life should NEVER cost arm and a leg. I have a basic package, but each client receives personalized consultations for a very affordable price. You can learn more by visiting my website: or email me:

I also write a monthly newsletter. It’s free. No spam. Send me an email I will add you to my list. You can find prior newsletters in two places: and

Thank you Shreyas for taking time to share and shed some light about your model to our readers.

Shreyas>>Thank you for giving this opportunity to visit with you and your readers.

I hope you had a nice read of this interview and got to know more about this new BudgetFree model. Please go ahead and contact him if you need more information.

I will see you all next week discussing on another new topic.

Sensible Pointers for Affordable GetAways – Final Part

In my last post, I shared few useful and sensible pointers for an affordable get away. I am going to continue where I left off and try to add as much tips to help plan your next get away.

4. Car rental

Obviously we all need the car to get around and see places in the get away location. Whether you are planning to drive long or short distance, it is wise to rental a car which suits your need by not going overboard. When you book car rentals, try to book outside Airport terminals which will save lot of money on airport taxes. In that case, check in advance whether have a shuttle which runs 24 hours.

Before you leave the rental kiosk, ask for their grace period rules while returning the car. This will surely help to plan your return trip. Also I was offered to buy their gas in their cheap gas rate to fill the tank when returned. But the catch, you have to bring return empty tank which is not always possible and they charge for full tank and don’t expect credit for partial tank. So I rejected it. Always take liability insurance which is just $10 because not all car insurance companies cover full on rental cars. You will surely avoid head aches when situation occurs.

5.EZ Airport Parking

In many airports, there are cheap parking spots which even offer online discount prices for long stays. It certainly saves money over taxi and add flexibility to your schedule. You don’t have waste time standing in line for taxi or troubling your friend to drop off at the airport. High gas prices and flight timing really don’t help when you ask for an help all the time. So I decided to use the airport parking outside the airport.

As usual, my research came out with a cheap parking deal with fast and relax parking which only charges $5 a day even with covered parking, free bottle water and newspaper. That what I call it a deal. There are other parking spots like ParK N fly, Parking spots, penny parking which only offer cheap rates for uncovered parking. If you are frequent flyer, some parking spots gives better rates. Check out in your airport.

6. Pack lightly

These days flight travel has become so much pain with added security and more restrictions on carry on baggages. Adding oil to the fire with recent high gas prices many airlines started charges for check-in bags. United, American Airlines and many other big airlines started charging even for the first check-in bags. Continental and some other only charges for the second check-in bags.

So its good to pack light and try to avoid carrying check-in bags if its only few days of travel. In my case, they actually allowed since I booked my flights way before all the rules came into effect. Call your airlines and find out your baggage allowance before you head down to airport.

7. Take the Childs Car Seat

If you have a infant, obviously you are going to have a baby carrier which you can put away before you board the flight. It also helps to seat your baby in the car. Similarly many know when you have a toddler who walks and going to take a lap seat. You can carry the baby stroller which you can put away before you board the flgiht.

But not many of you know, you can even check-in car seats for toddlers free. It will save $50 bucks or more when you are renting a car and needed car seat for your toddler. Otherwise you have to rent the car seat from car rental company which might not be hygenic at same time you end up paying for it. I carried my car seat for my 2 year old son and saved money on it.

8. Booking Tickets Online

As a pre-planner myself, I always recommend people to book tickets online in advance and avoid any last minute surprises. You even end up saving lot of money booking online. When I was booking ticket for Universal Studio Hollywood, there was an offer for 2 days ticket on one day price. I didn’t have time to spend 2 days in the place so I chose only one day.

But sometimes taking a chance to buy tickets at venue with coupons collected locally can save money. It’s just how you want to game it. Whether you want less tension or taking a chance.In my case, I bought one day passes and when I went, there are coupons for $8-$10 off on each ticket given out on Hollywood streets and even published on the local travel books.

So try to look out for coupons in the travel brochures kept in McDonald’s or BK’s. Even your lodge or hotel gives away free coupons for pizza or eatery place. Don’t just discard them, try to browse through and you might even find a money saving coupon or two. You have to look out for free money, its not going get to you automatically.

9. Buying All day Food Tickets

Many Theme park these days sell all day food tickets for cheap prize. It might seem cheap but when you get closer and use it. It is not really cheap. It doesn’t come with any beverages and only selected restaurants accept these tickets in the Theme park.

Before buying it, try to make a quick call to see whether you really going to stay all day at the Theme park and going to use it for atleast 2 time meals or snacks. Then it might worth a deal. If not, it is just way to get your money in advance. I actually bought them and made it work. We had lunch and dinner meal using this ticket and tried out different cusines available.

One more thing, take as much water as you can to tackle atleast half a day without buying it. Water and beverages are so expensive in these Theme park. I know many might not agree to me on this thing but believe me you are already paying hefty price for the ticket. I don’t see a problem taking water cans to shave out some expenses.

10. Tips for Las vegas – The Casino City Finally, I got few pointers for Las Vegas fun. When Booking hotel, you might find cheap deal off of the “THE STRIP” but is it worth to spend time taking the car to drive and parking it. If you can find a deal even little bit more expensive on the strip, I would suggest to consider it. It’s really hot during summer and walking is so tiring. It’s better to stay close and you can take breaks going to hotel room if you book the room on the strip. Otherwise, try to walk on the evenings. Buy the monorail ticket or bus day ticket if you are really planning to go back and forth.

Don’t miss the shows. There are free shows in many big casinos. Light show show at Bellagio is really good and you can even watch from the streets. Night light is really good, take time to enjoy by not getting tired walking in the mornings.

Don’t try to book show tickets online. You can easily get free tickets for comedy shows sponsored by your hotel. If you really want the show tickets, you can get in bargain outside the street for cheap price the day before or morning of the show. Take only less cash and try to avoid temptations playing too much games. If you do want to gamble a lot and try your luck, gamble conservatively.

I hope these pointers/tips helps you to plan an affordable trip to anywhere or to Hollywood and Las Vegas. You gotta have fun, a better affordable way is always the best for all.

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