Saving Tip Series – Buy Used
September 29th, 2006
This is one of those very common sense tips when it comes to big ticket items. Most bigger items end up having a very high mark-up when it comes to initial price. Cars for example loose a very large chunk of their value the moment you drive the car off the lot. But if you were to buy a used vehicle it doesn’t loose much if any when you purchase the car. In most cases you can find a used car that’s in excellent condition with low mileage that costs close to half the price of a new car. It just makes sense.
This obviously works for cars, but it also works for other big ticket items such as washers, driers, furniture and many more. Before you go out and spend thousands on an item see if there is any possibility of that item being sold used.
Tags: Saving Tips, Saving Tip Series
Posted in Saving Ideas | 1 Comment
Saving Tip Series – Don’t buy brand names
September 28th, 2006
When it comes to grocery shopping you have some choices that you can make to save yourself some money. Aside from the obvious of only buying the items that you need rather than what you would like you can choose to buy the store brand or no name brands. When it comes to the majority of the products out there, there exists a non branded version that is if not exactly the same as the branded version is almost the same. What’s the difference? The price.
The price differential on say no name macaroni and cheese compared to Kraft Dinner is maybe 50 cents. If you start adding up these small fractional differences you can very quickly add up to dozens of dollars per week for your shopping. If you manage to save $10 per week that adds up to $520 dollars a year. But being realistic you can save a lot more than that if you try.
There is no reason to pay for the advertising and branding costs of the major companies. This doesn’t only apply to food but to almost everything (with a few exceptions).
Tags: Saving Tips, Saving Tip Series
Posted in Saving Ideas | No Comments
Saving Tip Series – Your Neighborhood Library
September 27th, 2006
I had this idea to post up a saving tip a day for a couple weeks and there’s never a time better than the present to enact on something. Every dollar that you save is a dollar that you can use to pay down debt or better yet invest.
So here goes: Today’s saving tip is instead of going to buy books from the bookstores you can make use of your local library. I know it’s not always easy to make it out to your local library to get the reading materials you’re looking for but just going out and spending the money is often times unnecessary. Most libraries are now online and you can reserve the books that you want making your trip to the library much more worthwhile.
Another thing that I always overlooked when it came to libraries is magazines and periodicals. These can be ridiculously expensive when you don’t have a subscription and most libraries have dozens sometimes hundreds of subscriptions. You can easily get caught up on the current issues of Business 2.0 or Forbes without paying the $5 per issue.
A library can save you hundreds of dollars a year if you regularly buy books and magazines, potentially more if you’re a voracious reader and you don’t know what books you might just stumble on when you’re there.
Tags: Saving Tips, Saving Tip Series
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The Impact of Fear on Investing and Spending
September 26th, 2006
I’ve read a few posts about the impact of fear on a few other Personal Finace blogs but I wanted to tackle the subject myself. The very simple reason for this is that fear has been a great contributor to how I structure my finances and investments, at least it has in the past. Therefore even if I might not have adequate knowledge to talk on the subject I do have experience with it.
What experience do I have with fear impacting my spending and investing?
Initially when I started working I was living at home and I had few debts. Only one credit card to my name that had a low limit and the majority of my money was mine to spend. And spend that money I did. I got complacent in the knowledge that I could go do whatever I wanted because I had money. This complacency quickly turned into fear whenever the thought crossed my mind that maybe I should be spending less and saving some money. You might think it amusing but it truly was fear; I needed to be able to keep pace with my friends who were spending just as much as I was.
Before long I was 3 credit cards and a line of credit in debt for close to $30,000 but this didn’t stop me, fear was still driving me. The fear that I might not be able to keep my lifestyle kept everything just floating along for years, eventually I got to the point where I knew I had to stop spending more than I was making and I did. Everything mostly evened out and I was able to literally float all my debt and still enjoy myself most of the time.
So where was the fear at this point?
The fear of change kicked in after a little while and even though I knew that I needed to change my spending habits I didn’t. My debt load was slowly burying me so I consolidated some debt but the spending continued. I was scared of what I might have to do to actually get out of debt. Going out with my friends had become a staple of things that needed to be done as opposed to the luxiury that in reality it was. I have managed to overcome some of these fears and I now lead a much more frugal lifestyle in comparison. I still spend more than I should but now I am conscious of where my money is going and I account for it. If I know that I have bills to pay I make sure that I don’t overspend between pays and even more important I make sure that I no longer use my credit cards.
Now I have a new fear to overcome. Investing.
I have always been a consumer, I spend more than I make or I used to and I never set aside any money for pretty much anything. I am a dream customer for credit card companies, I don’t miss payments and I keep a very large balance. Investing for me is like spending money without a tangible result. It’s a fear of the unknown which is a considerable reason for why this site exists. Will I get over this fear? Yes, but I need to arm myself with knowledge to mitigate risks and to ensure I’m investing money that I can loose.
Posted in Investments | 2 Comments
A delay – Helps keep things in perspective
September 25th, 2006
Often times we find that we are delayed by something or another. Most of the time these delays are something that shouldn’t have happened, for example running late because we couldn’t find that shirt we really like. Other times we’re late because of things beyond our control and anyone who drives in traffic on a regular basis will know there is little that can be done about a delay.
So why do I say that it helps keep things in perspective? Well when we are inevitably delayed in our lives we are forced into a sense of urgency if we take a step back and realize the items that are important. For example if we’re running a bit late to the office this can but usually isn’t something that is very important. But when we’re running late to pick up our children it becomes much more important (I’m basing this on what I’ve seen since I don’t have any yet).
Which leads me to a question, we’re delayed all our lives yet when it comes to our personal finances why is it that we delay on purpose? I’ll be the first to admit that I have done this in the past, but when we take that same step back to get perspective we should see the importance of getting our financial lives in order. My delay in posting this morning was inevitable and unfortunately unimportant to me but it was something that needed to be done if I wanted to remain employed. My apologies.
Posted in News/Misc | No Comments
The money spending machine – your car.
September 22nd, 2006
Have you ever wondered just how much your car is costing you only to discover that it’s some completely outrageous amount? I have. I’ve come to the conclusion that owning a car is probably the biggest drain on my money after taxes. Now before anyone comes back to me saying what about food or rent? Well for me the difference is that food and rent (or mortgage) are essential for life. You need shelter and you need sustenance, but your car, often times its more of a luxury than anything else.
With the cost of gas as high as it is, and thankfully it’s gone down a bit in the last month or so, just drives home my opinion that if we were able to live without our cars it would save us thousands of dollars a year in expenses. Most people buy a nice car for which they pay say $400 a month for the payments or lease, then you start adding things like insurance and that will vary based on where you live but for me that’s a whopping $300 but lets use $150 as an average. So we’re already ay $550 a month, now lets bring in maintenance and gas. If you have a new car then your maintenance and gas costs are pretty low, especially if you don’t drive far to work. But lets again average this to be about $150 a month (I know this isn’t an exact science) but we’re up to $700 per month. Many people eat far less than that in a month even if you include money for entertainment. The car is a big money pit.
So what can you do about it? Well first off don’t drive to work if you don’t have to. I know this is often easier said than done but if you can pull it off you’ll use your car less which will mean fewer expenses in the gas and maintenance department (and potentially lower insurance). The second thing I would say is buy a car for cash if you can, the cost of interest on a car loan is quite hefty. Finally when you are buying a vehicle consider used, many people like the idea of a new car and they replace them every few years but buying a similar model that’s a couple years old will potentially save you thousands. For example I bought my Mazda tribute for $13,000, the car had less than 50000 miles (75000km), the car was a 3 year old model where the new models were going for close to $30,000. This is a pretty big difference.
Tags:Saving tips, Debt
Posted in Saving Ideas, Commentary | No Comments
Perseverance
September 21st, 2006
I have been trying to cut back on my debt for a while and it’s been slow going for a long time. At the beginning of this month I started this site up and I’ve been making it a point to be considerably more frugal than I’m used to. It’s been a challenge to say the very least. Brown bagging it to work has been happening maybe 60%, which is better than nothing. I haven’t bought myself anything, with the exception of one Stephen Covey book, which classifies more as an investment.
So what have I gathered from this? You really need to have perseverance to keep your spending down. Our society has conditioned people in such a fashion that our first response to most things is to take out the debit or credit card and buy something. I’m also not being completely frugal, I’m just cutting back on my spending significantly not completely, and yet even I am having some difficulty not going and spending money.
For those of you reading this in debt, saving and getting rid of your debt will require effort, it’s achievable; so don’t listen to the desire to spend money like crazy. You don’t need to spend money, at least not all the time. Use the small little cut backs and put them towards your debt; you’ll start noticing a difference (as long as you don’t use your credit) and don’t stop, perseverance is the key.
Tags: Money, Debt, Liabilities
Posted in Saving Ideas | No Comments
Investing – Comfort Level
September 20th, 2006
Being that I’m currently quite far in debt I should be concentrating on paying the debt down rather than investing and I am. But with that said I have a rather lofty goal which will require investment unless I happen to find a bag of money. Which has inevitably lead me to thinking about what will be involved in getting some investments going and how I’m going to start investing. The very first thought that has crossed my mind is how much I can invest and when. I’ve been depositing 50$ per pay into two mutual funds for half a year now but I’ve been thinking above and beyond that.
The conclusion to my thinking isn’t which investment I am going to be putting my money into but how much can I invest. I’m being honest with myself when I say that until I pay off my credit cards there should be little to no investment unless I’ve mitigated the risk considerably and know it’s a safe bet. Many of the business and personal finance books say that you should invest what you’re comfortable loosing. They don’t say that you should invest what you can afford but what you can loose.
People always seem to forget that an investment is a risk regardless of what that investment is. I’ve seen people get into arguments because the mutual fund that they picked blindly for their retirement savings has been loosing about 10% for years. I don’t know if this is the case but the fact that people are arguing about an investment loosing money means they didn’t invest carefully planning out the fact that the money in the investment has a chance to be lost especially if the choice of investment wasn’t made intelligently.
When I start investing it will be after doing more careful research than when picking my mutual funds (which are doing passably at the moment) and the initial money that will be invested is what I will be comfortable loosing if that happens. I don’t intend to loose the money but I’m not going to be investing rent money; the money going in will be a quantity that I am comfortable parting with that won’t impact my lifestyle or existing debt load.
Tags:Investing, Mutual funds, Investment strategies
Posted in Investments | 3 Comments
Education – The guaranteed investment
September 19th, 2006
I’ve been reading more and more Personal Finance blogs, many of which concentrate on frugality. This is a great thing; people are sharing ideas on saving money and collecting their money in relatively safe investments such as high interest bank accounts. This is great for them but I’ve also seen the opposite, not great ideas but people complaining about the fact that something might cost them money, especially when it comes to investing in their education. Thankfully we can get a lot of information from the internet but when that fails as far as my opinion goes there is one safe investment and that is education.
I hated going to school, I always found it boring and taught in an unappealing manner. I never questioned the fact that the learning was worthwhile. When you have an opportunity to take a class that will help you achieve a goal regardless of if it’s a financial one or not spending the money to learn from people who are willing to teach and have the expertise to teach is a great investment. When it comes to most forms of education there’s a cost associated with it and of course that has to be taken into account and weighed but you can’t shirk at a dollar figure if the class that you’re going to take can potentially make you more in return.
Have I ever been in a situation where I had to mentally justifying paying for education that was expensive? Yes I have, I have a degree from University of Phoenix that I paid for myself. This was a huge cost at a time when I was already ladenned by debt, I questioned my decision numerous times but I didn’t question the value of what I was learning. For as much as any individual class, course, or seminar might not teach you very much it can give you perspective which you can turn around and learn from. Every opportunity to learn is a great opportunity even if you don’t learn much, which is why I feel that education, is a great investment (as long as you’re not putting yourself in the poor house to get it… and even then it might be worth it)
Tags:Investing, Eductation
Posted in Investments | 1 Comment
Picking and choosing your spending
September 18th, 2006
This weekend I was surprisingly good; we (fiancé and I) went to the mall to do some shopping. I’ve never minded going shopping with people even when I don’t have a lot of free spending cash. To top this off I needed to get a haircut anyways so I used this as an excuse to keep myself out of the stores for at least a bit. The end result is I didn’t spend money on anything! I didn’t even look at anything just to make sure I didn’t put myself into a situation of looking at something wanting it but knowing I really didn’t need it nor could I afford it.
Ever since I started my goal I’ve been making an effort not to spend money when I didn’t need to and tracking my money so I know where I spend it. It’s helped out a lot and last pay I was able to spend almost $200 less than I got paid. This pay I’ve got a hockey season to pay for so that number is going to be less but the effort will be there. Picking and choosing your battles is the lesson I’ve learnt over the past couple weeks when it comes to spending. I could have passed on hockey but I really enjoy it and it would bug me if I didn’t play, but I didn’t need any clothes or gizmos from the mall so I didn’t spend there. If I’m able to keep picking and choosing where I spend money I think I’ll be able to keep moderation in the picture and pay down the debt a bit more.
Once you know where your money goes I find that picking and choosing your non-essential spending becomes easier in that you can keep spending on the things that are important to you but cut back on the things that are unnecessary.
Posted in Budgeting and Planning, Saving Ideas | 1 Comment
