Paper Losses

I visited one of my print shop clients recently to finish some tax reports and pick up bookkeeping papers. As he refilled his copier for the third time with 800 sheets, holding a ream of paper, he said, "And each pack of paper is short." My eyes glossed until the weight of his words sunk in.

"What?"

"Yeah. Each ream is short. The average ream has 493 sheets instead of the 500 listed on the package."

I asked him how he knew this, knowing he would never sit down and count how many sheets are in a pack.

He pointed to his printer. "The machine prints the customer the right amount."

Argument settled and a lesson learned. Consumers of paper are suffering a paper loss and don't know it. And even though we are a paperless office, we still use enough paper to make the shortage count (pun intended.)

The 7 page average shortage is 1.4%. A small office may spend $10,000 a year on paper (accounting offices, at least.) This adds up to around $140 per year in losses. I don't know about you, but $140 means a lot to me. I feel violated. And now that you know, you do, too.

Welcome to my world.

Sprint Rip-Off Report

On the advice of another, I switched my cell phone to Sprint. Great customer service was the main reason for the switch with better prices a close second. Let me explain how it worked out.

First, the service sucked. Call quality is poor on good days and worse the rest of the time. When I called Sprint customer service they told me if I didn't like the service I could switch back to where I came from. I live in a rural area where Internet is hard to get. I use the cell phone as my Internet portal for modest speed. Sprint says they provide unlimited Internet without throttling. Two point here:

1. Sprint can't throttle you back when they are so slow to start with. On multiple speed tests they run at only a third of what they promise. Dial up is only an inch away.
2. Unlimited access means little when it is near impossible to download at any reasonable speed. How much can you download in a month at .08 Mbps?

If all this were not bad enough, Sprint now adds a $10 per month mandatory charge called the "Premium Data add-on Charge." This is pure rip-off. I was never informed of the Premium Data Add-on Charge when I switched. Since I did not see the charge until the first bill a cancellation fee will apply if I switch back now. Considering the quality, the $10 is 100% rip-off. Consider it $120 wasted every year. It does make the cancellation fee look cheap compared.

The Premium Date Add-on Charge is mandatory on all new accounts with smart phones with 3G/4G capabilities. Most areas do not get 4G. My Sprint 3G works less than half the time, including when I am at work in town. Current customers will get hosed with this rip-off fee when they upgrade their phone. I recommend you upgrade to a real telecommunications company instead.

Save yourself the high blood pressure and aggravation. Avoid Sprint.

Get a Pay Raise By the Minute

It is possible to determine the class a person comes from by their attitude toward money. You can spot a spendthrift a mile away before they spend a single penny. The same is true of frugal folks. You should also note that wealthy people are more frugal than middle class families. There are exceptions to the rules, but they are rare. Frugal people gather a million dollar plus liquid net worth in a relatively short time and no one knows it by the way they act. Poor folks spend what they can to look richer and the middle class spendthrift lives beyond his means on borrowed money ( and borrowed time) exuding the illusion of wealth.

I know people that carry a card in their shirt pocket that lists what they earn at their job by the year, month, week, day, hour, minute, and second. Tell said person to buy a soda from a vending machine and you will get a quick answer that they need to work just over two minutes for that one soda.

Here is what the card looks like:

$60,000/yr
5,000/mo
1153.85/wk
230.77/day
28.85/hr
0.48/min
.008/sec

The example is a hypothetical person, not a real person or client. However, a lot of people make $60,000 per year. Adjust the numbers to fit your personal situation.

These experiences pushed front and center as I started reading Jeff Yeager's latest book, The Cheapskate Next Door. When he states in chapter one that he knows people that carry an income card in their pocket a few clients came to mind. Every one of these clients is well off or wealthy with a liquid net worth of seven figures or higher.

My dad always said, "Son, it is not what you make; it is what you do with what you make." It took me forty years to figure it out. It is easier deciding if you want to spend money when you can equate it with how much time you will spend at work earning it. Spend $50 and you need to work another two hours.

The slow economic recovery has people thinking about money in ways not done for decades. It is survival mode for many. When unemployment is about to run out it takes desperate measures. Why wait. Take the necessary steps now so desperation is averted later.

It is always a good idea to wait before making a purchase. Think through what it will really cost you in life spent at work paying for it. And heaven forbid you pay interest to pay for a toy. Many folks pay a third or more of their income on their home. That means you spend nearly three hours at work every day just to pay the loan. Is it worth considering a smaller home and taking those extra hours with family? The choice is yours.

Try this for a week only. I do not want a lawsuit if someone goes into septic shock on my advice. Write down your income by year, month, week, day, hour, minute, and second. Keep it with you at all times. Before every purchase anything, check your chart to see how long you need to work to pay for the purchase. I bet you will put several items back on the shelf. Then you can cut your hours at work or retire years or decades early. Like I said, the choice is yours.

There are Two Sides to the Paper

Once a year I clear out files that are out of statuette. Our office went paperless several years ago, but the hangover from pre-paperless days fills several rooms of filing cabinets. Slowly the old documents get shredded and recycled and the paper mound declines.

Going paperless does not mean we use no paper. We keep many documents in electronic format with certain working papers and signature pages kept in hardcopy. Some would say we are not fully paperless as a result. Still, if we scanned these documents into the computer and shredded the originals immediately we would still have used the original piece of paper.

Our paper usage has declined 48% from 10 years ago. We still provide a paper copy of tax returns to clients. Few ask for a pdf copy of their return and the few that do also want a paper copy and we are happy to oblige.

The shredding of old documents is spread out over several weeks. The process for this year is nearly finished. As I feed the hungry maw of the shredder I am taken aback by the amount of white I see. So many pages have only a small amount used and only one side of the page.  What a waste. The frugal accountant hates waste. Actually, it makes my blood boil.

If both sides of the paper were used I could cut paper usage by about half from current reduced levels. Paper drains the coffers by thousands each year and pushes up prices to handle this additional cost. In the past I checked into getting a printer that automatically uses both sides of the page. The cost was prohibitive and would not save much as the tax software does not support this conservative approach to paper use. At least in the past.

With new vigor I am revisiting this possibility of reducing paper usage and hence, cost. The tax software supports printing on both sides of the page now and printers that duplex print have come down in cost. I bet the cost of a duplex printer is paid for in a year. Tax returns will look smaller, but I have never been about impressing clients with thick tax returns; I am about preparing an accurate return.

Most tax offices still leave the back side of the page blank, wasting half the paper. This is a phenomenon of the wasteful United States. Americans have a habit of wasting too much. This lowers our lifestyle without any benefit. Plus we have the effort and cost of disposal. I am turning back this wasteful habit and using the whole page from now on. The investment is small and will save money.

The printer will cost several hundred dollars I estimate. With paper running over $30 a case the savings add up quick. No matter how frugal I am I always seem to find ways to reduce waste/costs more.

The effort to simplify life, reduce costs and wastes, minimize environmental impact is ongoing. The effort is small. It only requires and open mind and ready eye to spot opportunities. Besides, the landfill is full enough.

Kids, Money, and the Frugal Lifestyle

Living a frugal lifestyle is difficult as it is; add kids and it turns downright challenging. It is back-to-school season and the schools have the longest list ever of stuff kids need to bring the first day. No wonder teachers complain they make too little. Most seem to lack basic money skills to get, keep, invest, and manage their money.

Once the school has your wallet open it is time for peer pressure from fellow students and their parents to encourage more stupid spending.

• Did you drive your kids to school in an over-priced, gas-guzzling SUV? Then you are a mean mommy. Your kids will be scarred for life.
• Did you buy your children the latest electronic toy, gizmo, cell phone, iphone (i anything), or gadget from Apple? Then you are a mean, good-for-nothing daddy. Your kids will be scarred for life.
• How much did you spend on the summer vacation? Not enough. Did you even go on a summer vacation? No? What will the other students, their parents, and the teacher thinks when the class shares their summer activities? Your kids will be scarred for life.
• Is your home over 3,000 square feet? Flat screen TV? No? What is the matter with you? Now nobody wants to be your child's friend. Only a low-life would treat their kids in such a manner. They will be scarred for life.
• Please tell me you bought your kids the latest and trendiest cloths for the first day of school. No? What is the matter with you? Child Services should be called. That is child abuse. Your kids will be scarred for life.

And the litany goes on. Your self-worth and -esteem are hinged directly to how much you spend beyond your means if you believe the media and the folks at school or the coffee shop. Why?

The reason is clear to me. Advice given is meant to serve the person giving the advice, not you. The government wants you to borrow and spend more to help the economy; the financial planner says to NOT pay off your mortgage and invest the money; the banker says to borrow for a car or boat. All that advice is wrong. The elected government official wants to get re-elected; the investment advisor wants a commission; the banker, interest.

Even I am not immune. The amount of time I grant toward convincing you to live debt-free is small. I am your accountant. If you really think paying the bank $10,000 in interest is worth the $3,000 you get from the government is tax savings is a deal, go for it. I can point out the extra refund I got you, charge you $300, shake your hand, and go home. Of course, I will use the $300 to pay off my mortgage of fill my bank account.

The day you find pride in living a frugal life; the day you grin ear-to-ear because someone points out your strange frugal ways is the day you are truly free from the rat race.

Think about the pressure you get to spend money. Ask yourself: What is in it for the advice giver? Ask yourself: What is in it for you?

Bowing to peer pressure and refusing to teach your children fiscal responsibility IS child abuse. By withholding these basic needs in managing money you condemn your children to a life of servitude to money.

Money problems lead to crime, alcohol, child, and spousal abuse, stress, insomnia, divorce, and a litany of other health and social problems. Teach your kids by example. Live within your means and really enjoy life.

This is the greatest gift you can give your children and the lesson is never taught in school.

How to Declutter Your Life For Fun, Sanity, and Profit

For the last six months clutter has been my enemy number one. The accumulation of crap junk things in my life sapped my sanity and productivity. The effort is slow, but progressing. Each step taken improves my peace of mind and reduces stress.

No one will accuse me of a clutter-free life. The goal is to reduce a little bit of clutter each day. Yesterday I took a huge step. At the office there is a side storage room that leads to the basement. The closet/hall is lined with shelves of old tax journals, tax code, and other junk accumulated over 27 years of business. The storage space is less cluttered today.

There were some real beauties in there: two complete volumes of the tax code with regulation and explanation from 1988 and 1992, a Wisconsin unemployment handbook from 1994, binders, Who's Who for 1996, practice builder sales literature from who knows when, and an old Section 105 administration guide.

The shelves under all that weight were stressed to the max and an accident waiting to happen. The shelves no longer groan. All paper is in the shredding room and the binders were either recycled or burned. Office paper is cross-cut shred and ends up a fibrous mass good for bedding my animals at home. The office feels better for the effort. The shredding room should return to normal in a few days.

My desk and office floor were recently covered from end to end with stacks of papers and works in progress. My office is still cluttered and requires more drastic action, but in the last several months I have been complimented with comments like, "Keith, I can see your floor," and ""You have a desk!"

Yes, most of my floor is clear. Most. You can actually see bits and pieces of my desktop most days. Vigilance is required daily. The clutter bomb is always waiting to reassert itself.

If you desire your life back (as I did), peace of mind, less stress, and a better quality of life, declutter. Here are a few tips I used to declutter:

• Think Small Clutter takes a lifetime to build, it will take less time to dispose of, but it will take time. Dealing with a lifetime of clutter is overwhelming. Start with one room or closet and get the low hanging fruit first. Worn out clothes should be sent to recycling or the thrift shop, depending on condition. Old magazines and junk mail are easy choices for most of us.
• One Thing a Day Schedules are tight. If you don't have hours, or even an hour or fifteen minutes, commit to one thing a day. Get rid of one thing, one piece of clutter, and don't replace it.
• Focus on the Important My desk and floor required immediate attention. Perfection never entered the equation. My focus was to get papers off the floor and clean my desk so the desktop could be seen. Sometimes decluttering life means ending procrastination. A lot of little jobs can reduce productivity when working the big jobs. I like to take one-half day a week and dig into all the little projects that accumulated and clean them up.
• Electronic Clutter In my line of work electronic clutter is an issue. I turn my email off for most of the day. I deal with email, correspondence, and phone calls at selected times. This allows for greater productivity. Since I get more work done this way, it frees up time for things I prefer to do. Take steps to reduce email. Make good use of the junk mail folder. Turn off the interruptions of cell phones and other devices that sap your lifeblood.
• Tough Decisions A large number of items are difficult to throw out. My back issues (20 years worth) of Science News and science fiction magazines fall into this category for me. I never know when I might need to review a copy of the June 23rd 1987 issue of Science News or when I might want to reread a short story from the January 1993 issue of Isaac Asimov's Science Fiction Magazine. There are even tougher issues to decide when throwing stuff out. I give myself permission to keep things for later consideration. But seriously, those issues of Asimov's would get great use at the local jail. Someday. Someday.
• Enjoy the Moment There is no feeling like the feeling of freedom. As you clear out a little each day the cumulative effect becomes real. The open space feels super. Cleaning the house is easier and unrealized stress is reduced. Enjoy each room or closet as you free it from the albatross of decades of stuff.

Decluttering your life can save you money. You will come to appreciate an uncluttered environment and will reconsider purchases that only reclutter your life. Many of the things you no longer want/need can be sold on eBay or rummage sales for some extra cash. This extra money can reduce or eliminate debt, the biggest clutter and stress in a large number of lives.

Now you can breathe.

I Ain't Got No Money

Behind my desk sits a file with completed documents. The client refuses to pick-up or file the forms with the IRS because she is short the amount due. Of course, you realize, she is only digging the hole deeper.

Friendly advice from your local accountant: Always file on time, even if you can't pay. Why? Because there are several IRS penalties in this world: penalties for not paying on time and penalties for not filing. The last penalty is a self-inflicted wound. File on time and set-up a payment plan, thereby forgoing the late filing penalty.

This is the easy way to reduce your tax burden. It is bad enough you have to pay taxes, why volunteer to pay extra.

Good Business Advice for Everyone

I commented on a blog last night that I think is solid advice for anyone in business. Give it a look-see.

http://pubrants.blogspot.com/2009/08/writing-as-business-part-2.html

Cut Your Gas Bill 30% Without Giving Anything Up

With the new energy credits in the tax code, it makes sense to take advantage of low hanging fruit. This subject will require several posts and I will add the the subject on a regular basis.

Today, I want to grab the lowest of all hanging fruit, gasoline consumption. What I propose below costs you nothing and there isn't a tax credit for it. You can cut your fuel costs by 30% or more by following the habits outlined below.

* Keep your tires properly inflated.
* Do not neglect regular maintenance.
* Coast into stops.
* Accelerate modestly.
* Drive the speed limit.
* When replacing tires, buy low rolling resistance tries.
* Use synthetic oil.
* Use air conditioner sparingly.
* Do not accelerate up hills unless no other choice is available.

If you are real serious, use a ScanGuage II to get real-time feedback on efficiency. Following common sense and the law can be a real benefit personally in savings and to our society by using less imported energy.

I should not have to print this blog, but I get blown off the road every day and know how much gas is being thrown away braking and from aggressive driving.

My Honda Accord has over 100,000 miles on it and gets nearly 40 mpg. This, from a non-hybrid. Just think where energy prices would be if we all practiced better driving habits.

Check out http://www.cleanmpg.com/ for in-depth articles on improving your fuel efficiency. And a tax credit is not needed to get the advantage. In future posts, I will discus how to use the tax code to help pay for improving your home's energy efficiency.

Drive safe.