Happy Mothers Day!
May 11th, 2008
To all the mothers out there: we might not always say it but we appreciate everything that you have done for us and continue to do for us. My mother has been a great inspiration and a great sounding board for many of my crazy ideas (my wife gets many of those now). Thank you!
I am awestruck with the sheer selflessness and caring that mothers give as they go about taking care of their children. Every child should take this day and let their mother know how much they mean to them. Happy mothers day to every mother out there the world would be nothing without you.
Posted in News/Misc | No Comments
How to Save on your Gas Costs
May 9th, 2008
Since the price of crude oil and gasoline have been going up drastically the topic of saving on your gas costs has been common on many blogs. We love our cars and the bigger they come the better regardless of how much gas they guzzle. I wanted to jump into this general conversation with my tip to save on gas.
If the price of gas has gone up just don’t buy as much of it. Simply use less of it! I know the tip is very simplistic but I think it would be ideally exemplified with an analogy. We all wear clothes that get dirty which we wash with washing machines (well most of us do) and this activity requires a type of fuel of sorts (detergent). I think it’s is a perfect analogy for my saving tip.
We have grown accustomed to using our washing machines just like our cars and we’ve gotten to essentially need them. We need to have clean clothes. Just like with the car there are other alternatives to get our clothes clean that are far less expensive than owning a washer and dryer that we don’t use for the sake of convenience.
Now assume that all of the detergent makers decided to raise the price of detergent by 3 or 4 times what we pay now. So rather than paying say $7.50 for a pack of detergent the price was suddenly $30. We would instantly notice but we might still pay. For the sake of argument let’s say this went up 40 times (my logic is we drive and use our cars at least 10 times more than our washing machines). The price of that same pack of detergent would now be $300. How many of us would still continue to buy the premium brands? And just to make this analogy completely outrageous let’s just say that the washing machine was costing you $350 per month in financing costs and you were required to have insurance on your dryer of another $150 per month. Doing laundry would all of a sudden cost us $800 per month.
At this point how many of us out there would consider the alternatives? Probably all of us. We have alternatives when it comes to cars as well. We can drive less and not buy fuel or gas guzzling cars. We are in a situation where we are reliant on an incredibly expensive means of transportation when alternatives exist. I know this is a bit more of a challenge for some people and in some circumstances but walking, biking, transit and car pooling would probably be accessible to most people in some way.
The way to save on gas is to not buy it; we need to either improve the mode of transportation or find an alternative means. Cars have been around for about a 100 years and in that time we’ve come to rely on them so much that people are convinced they cannot live without them. I like most bloggers have a car that I drive to work for convenience, thankfully it’s pretty close and I’m saving time by driving which is my logic for continuing this. But if the price of gas were to go up another say 2 times I would start taking transit. I know there are alternatives and I would use them.
The question I’ll leave you with is at what point would you stop buying gas? What would the price need to hit before you couldn’t justify the cost?
Posted in Saving Ideas, Commentary | 1 Comment
Don’t Be Afraid of your Financial Situation
May 8th, 2008
One of the most common reactions to something we don’t understand is fear. It drives us into many of the stupid decisions we make and thoughtless things we say. I know I don’t speak for every person but too often when we don’t understand something and rather than trying to find information we simply react with fear. What does this have to do with personal finance? Everything! As a society we are uneducated in the ways of personal finance, even at the most basic level, and we react spastically when something comes up.
Don’t be afraid of your financial situation. Understand it.
Before you do any more damage that might take years to fix, stop and take a look around you. If your financial situation is healthy and you’re living well below your means then congratulations, you’re in the minority. But if you’re in debt, living paycheck to paycheck, and wondering how you’re going to pay your bills then take a good look. Are you simply reacting to what’s happening around you or do you really know what’s going on?
You’ll probably have to ask yourself a few questions to get a better understanding of where you stand such as:
- Am I spending too much money? Why?
- Do I know where my money goes?
- Do I buy things because I don’t want to admit I can’t afford it?
- Do I understand how my credit cards and debt work?
- And the list goes on and on.
When I first left university and started working I was making good money which I in turn was spending at an alarming rate. When I ran out of money I simply turned to my credit cards to cover the difference. At first this wasn’t a problem because the credit cards had low limits. But that changed very quickly and before I knew it I was heavily in debt. I was living from paycheck to paycheck and afraid of my finances and how I spend my money.
If at that time I had stopped and understood more I would be in a far better situation today. Not understanding and being afraid of your financial situation can mean that you’ll continue to spend money when you shouldn’t (or don’t have it) to keep appearances up because you don’t want to admit being in debt.
Educate yourself! Understand the consequences of your actions and take some responsibility for them. That doesn’t mean you need to stop all of the fun things in your life that cost you money but you might want to consciously cut back to get a grip of your financial situation rather than reacting because you’re afraid of your financial situation.
Posted in Financial Situation | 2 Comments
Online Financial Tools
May 7th, 2008
The thought of calculating the amortization on a mortgage is enough to give me a headache and prevent me from even attempting it. I know that there are sites and tools out there that can help by doing a lot of these financial calculations and I have used them in the past. Yesterday I ran across a post over at Money Ning about a great online Mortgage and Loan Calculator; the online calculator itself is very well thought out and is a handy visually appealing tool.
When I first looked online for financial tools many years ago they were hard to use and clunky but things have come a long way since then. The tools still come in complex and difficult to use versions but there are more and more well built easy to use tools. The best part is that most of the tools are free (like Mint.com). We no longer have the excuse that we don’t know what our financial situation is or whether we can afford a loan or a mortgage
Have any of you had success with any online tools? Definitely pass them along; I’m thinking of creating a section of this site to list all of these types of tools.
Posted in Sites/Articles | 3 Comments
We Sold our Condo
May 6th, 2008
Over the past couple weeks things on my end have been very crazy and hectic; not only was there a great deal of work that I had to do but I’m also slowly plugging away on a couple projects that I wanted to complete. The projects are still moving forward but everything unessential was effectively placed on hold while we bought a new house and sold our condo.
The great news is we sold our condo last night! All of the cleaning and preparation to ensure that the unit was in prime selling condition paid off. We didn’t get quite our asking price but what we got was better: we got an offer without any conditions! Now its up to the lawyers and banks to get all of the details in place. But all of the major hurdles have been completed.
This has been a very new experience for me in that I have never purchased or sold a house successfully. It was a stressful event since we were buying and selling what will be our home. This wasn’t an investment or a recreational property. We needed to take everything into account including all of the repairs and upgrades that will be going into our new home.
I’m glad that this process is effectively over and we can move onto the packing and preparing for the move. There is still a lot of work that needs to be done but we don’t need to do this on a crunched time line. Our lives can go back to a more normal pace and we can go back to some of our regular routines. This also means that I’ll have more time to put into this blog and a couple other projects that I have going!
Posted in Real-Estate | 1 Comment
Pay Your Bills First
April 30th, 2008
Do you know how much money you have to spend freely at any given moment? I have an idea but if I happen to forget a bill that’s due then I might spend money that’s not available. A little while back I was introduced to a little trick when it comes to managing your money by my that has helped her know just how much money she has for her day to day spending. Pay your bills before you spend money on anything else. It’s a very logical approach but one that I overlooked for years as I was struggling with my finances.
Paying your bills first is a great way to help you live below your means. The object is to take all of your bills that are due when you get your pay take pay all of the bills you have and pay them before you spend any of your money. By doing this you end up ensuring that your bills are paid on time and you’re only left with money that is spendable. Coupled with some basic budgeting and it can help you live below your means.
If all you have left after your bills are paid is $500before your next pay you know that you can’t spend more than this and you don’t have to worry about bills coming out of your account. Getting into the habit of taking this approach may take a little time but it will prevent you from trying to juggle your debts. If you happen to be deep in debt and are struggling to make ends meet this can give you an idea of how much or how little money is left over.
Another benefit to taking this approach is that your bills are always paid before their due date and you continue to build a positive credit rating. I know that for many this is a mute point but when you’re in debt and juggling debt and spending it’s a nagging thought in the back of the mind. I know it was for me when was really struggling financially.
Finally when you know how much money you have to that is spendable you don’t have to worry about your spending as much. Being able to have money for the day to day spending is all you have to worry about which should free up any potential remorse or concern when it comes to spending money on an unneeded purchase.
The biggest thing that comes from paying your bills first isyou increase your peace of mind about your finances and budget. Personally I’mstill getting into the habit of doing this but it really makes a differencewhen it comes to knowing how much money you have for incidental spending.
Posted in Budgeting and Planning | 2 Comments
Carnival of Personal Finance #150 is up
April 29th, 2008
This week’s Carnival of Personal Finance (#150) is up over at Lazy Man and Money. He was kind enough to include my post about House Hunting in an Uncertain Market. This Carnival is definitely worth checking out since there are 115 posts included in it (it took Lazy Man 16 hours to put it together!!).
Posted in Sites/Articles | No Comments
Weekly Review - April 27, 2008
April 29th, 2008
I know this posting is a few days late but the last couple weeks have been very crazy and hectic. We have made a house purchase and we’ve placed our house on the market. Unfortunately this involved a great deal of cleaning and organizing which has taken up most of our time. I haven’t been in front of the computer at home since the last weekly update. This also means I haven’t been following the PF world or the business world for that matter.
This is very exciting time for me since I’ve never purchased or sold a house before and I never realized how stressful it was. The cleaning and organizing have really helped make our place look a lot larger and I believe much more sellable. A great deal of effort goes into getting a home ready to be sold but we’re there and we have to maintain this level of tidiness. I’ll write my impression of the whole process once it’s all finalized.
There hasn’t been much else happening in my life since this house purchase and sale took over it and I think after this week everything should start falling back into some semblance of regularity. I’ll try to carve out some time to get a few posts together in the next day or two.
Posted in News/Misc | No Comments
5 Benefits of Using Credit Cards
April 25th, 2008
Debbie Dragon is a writer for Creditorweb.com, where she writes about credit card offers, responsible credit card use, and rewards programs.
With all the focus on getting out of debt and paying off high interest credit cards, you might be wondering why I would suggest using credit cards to improve your financial situation. The truth is, there are a number of reasons why credit cards can be beneficial to your finances – it’s really all how and why you use them. Here are 5 ways to make credit cards work to your benefit:
- Find a credit card with a rewards program that will actually reward you – based on how you use your card. For example, if you only travel once every four years, a frequent flyer program or free hotel program is not going to be your best option. Look for rewards that allow you to earn on all of the purchases you make using the card, and that offer rewards in the form of cashback or merchandise that will actually benefit your lifestyle.
- Use 0% balance transfer offers to avoid paying high interest on older balances, and focus on paying off all outstanding credit card balances. This will allow you to get into the habit of using a credit card for all of your monthly purchases and paying it off at the end of each month to avoid interest, yet still benefit from the rewards program. This only works for individuals who use one or two credit cards at the most, and who are not carrying a balance from one month to the next.
- When in need of purchasing a large ticket item, use a credit card with a 0% interest rate for six or twelve months to give yourself more time to pay for the item without paying interest or finance charges. Take the total price of the item and divide it by the number of months you have an interest-free promotion to find out how much you have to pay per month to have the purchase completely paid off by the end of the promotional period. Keep in mind if you are late with a monthly payment, you will probably lose your interest-free status, so do everything you can to keep up with your payments on time.
- Don’t close your unused or paid off credit cards. Many people believe that reducing the number of credit cards on their record will improve their credit score, but the reverse is actually true for most people. If you close out your unused or paid off credit cards, you start reducing the amount of credit you have available. As the amount of credit available decreases, your debt to available credit ratio increases – making it seem as if you’ve charged almost all that you are able to charge; and putting you into a risk pool. This will often result in a lower credit score, even if you’re making your payments on time. It’s better to have more credit available – just don’t go on a crazy spending spree because you know it’s there!
- Credit cards frequently offer additional benefits in the form of purchase protection coverage, extended warranty coverage, and various travel insurance coverages. They don’t cost anything more but provide you with protection you can use if needed.
Posted in Debt | 2 Comments
A Possible House Purchase
April 24th, 2008
We have found a house that we like and we’ve placed an offer for; now its time for the making sure everything with the house is sound. After a few weeks of looking for a house we actually found one that we liked and wanted. We placed an offer on the house and after a little bit of negotiation our offer was accepted. Needless to say we want to make sure that everything is ok with the house before the deal is 100% done. The house inspection turned up a few things that will need to be looked at though other than the electrical system there’s nothing major wrong with the house.
Before anyone jumps on this we knew the wiring in the house would need to be replaced before we placed our offer. Other than this as a major expense everything else seems to be mostly in order. A lot of smaller to medium sized jobs over the next few years which will increase the value of the house. The only thing that remains is to make sure that there are no termites (the house is in a region that is known to have them even though the street we bought on is quiet). The whole point for us here is to make sure that we’re not buying a house with more problems than we’re ready to deal with. Some known issues that we’re planning for is one thing but to discover a massive problem such as a termite infestation would not be a pleasant surprise.
The expense of getting a house inspection in my opinion is totally worth it. And unless your uncle Bob is a real house inspector get a professional - they do this for a living and know what to look for. The report we’re getting for our $400 inspection will make sure we fix everything necessary to make the house safe and get a better insurance rate. Not to mention it minimizes the unpleasant surprises.
We’ll know the results of the termite inspection later today and by the end of the day we might have a finalized house deal. This is very exciting for me as its my first house purchase - I’ve learned a great deal about the process so far.
Posted in News/Misc, Real-Estate | 1 Comment
