Walk With Money » Little Bit

5 Things That You Should Not Cheap Out On

admin — Thu, 29 Jul 2010 10:20:05 +0000

You can save a lot of money by making an effort to be frugal, and you can use that extra money to do many things. Whatever the reason, being frugal can be great in most instances. I stress ‘most’ because sometimes spending a little bit more will mean you get a far superior product. Sometimes buying the cheapest thing you can find will cost you more in the long run and here are five examples.

Photo by Christopher Cessums via Flickr

Cars

“The cobbler always wears the worst shoes.”

There are a few variations on this proverb but we’ll stick with the one most relevant one. It seems that people that are good at working on cars will end up driving the worst cars. Buying a junker and fixing it up might sound like a cheap way to have a set of wheels but you’ll end up spending a lot more on parts, not to mention the hours of labor that you sink into your automobile.

If you’re fixing up a car that you love then it’s likely worth the cost, but otherwise you should spend a bit more and get something that wont break down every week.

A Toyota or a Honda might cost you a little more (depending on what you drive right now) but they are worth the price of admission. Over the long haul you will end up saving a lot of money on repairs and gas — not to mention your resale value, which will stay very high if you take care of your car.

Just because a car is cheaper in the car lot doesn’t mean it will be cheaper over a five or ten year period. You should also look at cars that are one or two years old because you can save 40-50% or more off the price of a new vehicle.

Internet

Free Wifi Internet access is available almost anywhere these days. What aren’t free are the $4.95 coffees, the $3.40 muffins, and the $1.99 bottles of water that you grab on the way out the door. Making a trip to these free Wifi locations can also cost you money, but the big killer is still food and drinks.

Unless you’re very strict and only use free internet at the library you’re better off getting it in your home. Some people will get lucky and have neighbors that provide them with free Wifi access.

Televisions

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The First Payday: Helping Your Teen Understand Money

admin — Fri, 16 Jul 2010 09:20:07 +0000

Teens vary in their responses to getting a job. Some long for the freedom that having their own money promises. They want an increased cash flow for their clothing end entertainment budgets. Others are less than thrilled. These dread spending so much of their time doing what someone else wants them to do.

Whether your teen is excited or bored at the prospect of having a job this summer, YOU can respond to their newfound extracurricular activity by helping them learn not only what it takes to be a good employee, but how to make the most of the money they’ve earned.

Introduce Budgeting

The big, bad, “B” word doesn’t have to intimidate your teen. Sit down with him or her and help them work out a plan for the money they’re earning. Since even the most low-key kid has stuff he wants to buy, motivate him by asking how long it will take him to save up for what he wants. Remind him of any necessary expenses, like car insurance and gas, and encourage him to put away at least a little bit for the future.

Whether your child takes all of your suggestions or not, he’s hearing information that he may not have heard before. If he doesn’t apply it now, that doesn’t mean he won’t in the future.

Talk about Taxation

Many teens are surprised, and not in a good way, when they see how much the government takes out of each of their paychecks. There’s no better time to talk about where tax money goes and why she’s required to pay. If your teen is interested, talk about the different kinds of tax money taken out (look at the pay stub for the amounts).

If nothing else, you can remind your teen that she will probably get some money back the next year. Offer to work with her on her taxes at the end of the year to make sure she gets as much as she can. Then when tax time rolls around, make sure she sits …

The Simple Dollar Is in Bookstores Today… And Here’s Some Free Bonuses for Buyers!

admin — Thu, 08 Jul 2010 01:20:03 +0000

My new book, The Simple Dollar: How One Man Wiped Out His Debts and Achieved the Life of His Dreams, is now available in bookstores (I just saw it at a Barnes and Noble in the Des Moines, Iowa area and at the Borders in Ames, Iowa)! You can also buy it right now at Amazon.com or order it from Barnes and Noble.

I’ve already shared a big collection of reader stories from people who have already read the book and made positive changes in their lives because of it.

Now I want to add a little bit more value to those people who have already purchased the book – and those who are on the fence about it.

If you buy the book before July 14, I’ll give you all of the Simple Dollar downloadables… free.

You’ll get 31 Days to Fix Your Finances, The One Hour Project, Twenty Big Ideas, and Building a Better Blog all for free. Each one of them is like a small book, delivered electronically for you to print and …

Promises, Promises (To Yourself)

admin — Mon, 05 Jul 2010 23:20:02 +0000

Connie writes in with a great question whose answer got far too long for the Mailbag:

My biggest problem with money is that I lie to myself. I keep telling myself everything is going good and at first it is. Then I start slowly falling back into old habits but I keep telling myself everything is good. Eventually, everything is worse than before but I still keep saying everything is good, and then I’ve racked up thousands of dollars on the credit cards again. I don’t know what to do anymore.

I think that lying to ourselves is something we all do to some extent. Most people tend to believe they’re above average in most categories, which indicates some degree of self-delusion among practically everyone out there.

A little bit of self-delusion is very good, actually. It gives us self-confidence, something we need to have to overcome difficult situations. We can tell ourselves we can do something just a bit beyond our skill and talent level and thus by pushing ourselves to doing it, we’re able to achieve something that was previously just beyond us.

Yet, as Connie points out, self-delusion can sometimes be a very, very dangerous thing. It can push us into making some terrible mistakes under the guise of “everything being fine.” It can cause us to undermine our own progress and goals. It can sneak us into ever-greater problems, like an endless sink into debt or obesity or career mediocrity.

My biggest current problem with self-delusion is with my weight. I’m not gaining any – that’s not the problem – but I often delude myself into thinking I’m doing very well at losing weight when I’m actually treading water or losing it very slowly.

In the past, however, I’ve been able to battle self-delusion in many different areas: my career, my personal hobbies, and my time management abilities immediately come to mind.

Here are four techniques I’ve found that really work for cutting through self-delusion.

Make yourself directly accountable to others
This is the top strategy I’ve found. You’ve simply got to make yourself accountable to others in your life. Lay out your situation to them. Explain where you’re …

When The Bough Breaks: Planning for Unemployment

admin — Thu, 24 Jun 2010 04:20:02 +0000

Yesterday I received the news that so many others have heard, my job will be coming to an end. Luckily, my boss was very kind, and has alerted me three months in advance with the hopes that I will be able to find something else. At this moment I’m hoping it will give me the opportunity to get my business ramped up. There are a few things that you should immediately do when you find you are facing a layoff or termination. You should start this the minute you hear the whispers in the office.

Photo by Daquella manera via Flickr

Unemployment

Do you qualify for unemployment? Most states have websites that will list the requirements for obtaining unemployment, but it’s still a good idea to call and confirm. When my husband got a job and we moved from Nevada to Oregon, I had to quit mine. Since I resigned, I didn’t realize I still qualified under a spousal transfer provision. It made it much easier during those three months where I couldn’t find a job. Unfortunately I currently work as an independent contractor and will not qualify for unemployment. It puts a little bit of extra fear into me knowing I won’t have anything to supplement my husband’s paycheck, but hopefully that will be a motivator.

Severance

If layoffs have been happening for a while, you may know if your company will be offering a severance package. I think many of us would love at least a two week golden parachute, but it just doesn’t happen for most of us. Consider your severance to be an immediate emergency fund until your next job. You don’t touch it unless your utilities might be shut off, there’s nothing in the cupboards, or you might be evicted. You can better control your money if you…

Revisit Your Budget

The second I found out I would be unemployed starting October 1st, I looked at my budget. If you’re smart, you already have an emergency plan in place to reduce your expenses. While my husband and I already had an emergency budget, it’s a few months old, and we’ve had several changes. There were certain line items that would automatically go away when my job does, like taxes and parking. Other easy cuts are food and gas. We won’t be dining out, and I won’t be driving to work. Things you might have missed:

Auto Insurance: Your insurance has a basis in how many miles you drive. If you’re mileage is dropping substantially, call your insurance company and ask them to review your rate.

Credit Cards/Debt: While you still have verifiable income, call your credit card companies and ask for rate reductions, and look for balance transfers that are less than you’re paying (remembering to include the transfer fee in your calculations).

Student Loans: I can put my student loan into an unemployment …

Best Money Tips: Start Thinking About Christmas in Summer

admin — Thu, 17 Jun 2010 05:20:08 +0000

Welcome to Wise Bread’s Best Money Tips roundup. Today, we share ways you can save money this Christmas by thinking about it now, Father’s Day gifts for under $20, summer rental car deals, and more.

Top 5 Articles

Five Big Ways You Need to Think About Christmas…Now! — "The truth of the matter is that just a little bit of forethought right now can save you a ton of time, effort, cost, and heartache this December." The Simple Dollar

10 Last Minute Father’s Day Gifts Under $20 — Here are great gift ideas for every kind of dad, from the safety minded to the kid at heart! Being Frugal

Summer Rental Car Deals from Thrifty and Dollar Car Rentals for 2010 — "Thrifty and Dollar car rentals are currently offering summer rental car deals to help you save money when traveling this summer." Maximizing Money

Dishsoap Spray for the Garden — Just mix water and soap for a spray to repel leaf-eating garden pests. $5 Dinners

Know When to Buy What — "April, May and June are traditionally a great time to purchase cookware, kitchen tools and small appliances." The Sun’s Financial Diary

Other …

Five Big Ways You Need to Think About Christmas … Now!

admin — Tue, 15 Jun 2010 03:20:02 +0000

It’s mid-June, so there’s no better time to write about Christmas. Right? Right?!

The truth of the matter is that just a little bit of forethought right now can save you a ton of time, effort, cost, and heartache this December. While it might feel really out of place to think about Christmas on a warm June day, right now is the perfect time to give these five things a quick thought.

Kill off unwanted gift exchanges
If you’re a member of a gift exchange or two with family that you just don’t want to participate in, right now is the time to put an axe in it. Just send out an email or a Facebook message to the other members of the exchange stating the truth of the matter: you enjoy seeing the people, but you don’t think a gift exchange is a great idea.

If completely bowing out seems potentially damaging, suggest that this year be a “secret Santa” drawing instead of everyone buying everyone else gifts or put a strong cap on how much can be spent.

Doing this now is much better than doing it in late November or the middle of December when people are already financially and emotionally involved in their holiday purchasing. The solution to too many Christmas gifts purchased is just an email away.

Get the important people on your radar
For most of us, there are a handful of people that we’re going to buy Christmas gifts for this year. Since these people are truly important enough to us to be an automatic gift recipient, we often desire to find the “perfect” gift for them.

That’s why I start my list now, so I have plenty of time and space to listen to what they’re saying, think about what they’d value, and come up with great gift ideas (and bargains on those ideas) well in advance of the big day rather than stumbling through Target on December 20th, pushing aside the hordes and scavenging whatever overlooked items remain on the shelves in hopes of finding something they won’t find too repugnant.

Just start a list of the people you want to buy for, then pay attention to them in the coming months. Most people will reveal deep interests and passions and sometimes even specific ideas over the course of the year. For example, maybe your sister will mention a type of sweater she finds particularly flattering, or maybe your father will lament not having grow lights so he can start seedlings in the basement in January instead of having to buy starts for his garden in April. Write these down, as they can be the source of great …

If I Won the Lottery…

admin — Sat, 29 May 2010 10:20:15 +0000

What would you do if you won the lottery? I was driving the other day and saw one of the lottery billboards advertising how much the current lottery is up to. As of this post, the lottery is up to about 65 million dollars. Every time I see those billboards, I always start dreaming about all the things I would do if I won the money.

Sometimes, my dreaming is a little bit premature. I think about what I could do with all that money that I’ll never win because I always forget to buy a ticket. When I moved to Georgia 10 years ago, I would buy scratch offs all the time. It was something new and exciting because the state I moved from did not have a lottery. I would never win anything more than a couple of dollars or free tickets. When I realized how much money I was donating (aka throwing away), I stopped playing.

If I did win the 65 million dollars, I’ll be willing to bet that I wouldn’t end up broke like some of the past lottery winners. 65 million dollars may sound like a lot of money. Yeah it is, but if you don’t spend wisely, that money will be gone before you know it. I’m not going to lie and say that I wouldn’t buy me a new house and a new car because I would. I just wouldn’t go crazy with it.

If I won the lottery, I would buy a new house. The maximum amount I would spend is $300,000. I would be able to get a nice big house in a great area. I wouldn’t need to buy a 50 room house and spend millions of dollars. I would also pay off the mortgages on my current properties and keep them as rental properties.

If I won the lottery, I would buy a new car. I would buy a 2011 BMW X5. It would cost about $81,000. Yeah, I know this is a crazy amount to spend on a car but with the money I’m not spending on the house, I’ll spend a little extra …

Convenience and Piracy

admin — Thu, 20 May 2010 22:20:02 +0000

I’m going to go a little bit off of the beaten path here and talk about something not directly related to personal finance, but something that has a strong indirect relationship: piracy of intellectual property.

A week barely goes by when a person writes to me asking for some sort of justification for their piracy of music, computer software, or other electronic materials. I usually don’t give it to them because I feel pretty strongly that piracy is wrong and that content creators (and all of the people that help that process along) deserve to be paid for that work.

However, I also believe that the biggest reason piracy thrives online is that most of the time it’s easier to just pirate a song or a piece of software than it is to pay for it.

Case in point: recently, the “Humble Indie Bundle,” a wonderful collection of computer games, was made available for a stunningly low price online. You could simply pay whatever you wished for it with the minimum price of one cent. You could also direct any portion of that price to charity.

What happened? There were people actively pirating the “Humble Indie Bundle.” Rather than giving a single cent to a charity to download it legitimately, they chose to simply steal the software.

Why? It’s easier.

That’s my explanation anyway.

In order to download the software legitimately, you had to fill out forms. You had to decide how much you wanted to pay the developers. You had to decide how much you wanted to give to the charity. You also had to have some sort of method for actually paying for it, whether it be a credit card number or a PayPal account or something else.

And that’s the problem. Some people aren’t comfortable sharing their credit card information with a random website or with Paypal, and I don’t …

Pros and Cons of Being a Homeowner

admin — Thu, 06 May 2010 08:20:03 +0000

This past weekend, I finally got around to doing some long overdue tasks around the house. One of the major things I had planned to do was pressure wash and seal the deck. I’ve been meaning to do it for quite awhile but it was one of those things that I kept putting off over and over again. As a homeowner, if something needs to be done around the house, it’s up to me to get it done or pay someone to do it for me.

If you are a homeowner, a house maintenance fund is a must. There will be things that need to be done that you don’t have the time or ability to do on your own. From what I’ve heard, the best rule of thumb is to set aside at least 1-2 % of the cost of your house for your maintenance fund. I keep at least $1000 set aside for any emergencies that may come along. I bought my home brand new so thankfully, I haven’t had anything major come up yet.

With all of the affordable properties out there, you may be thinking of taking the leap towards home ownership. If you are thinking about becoming a homeowner, consider these pros and cons:

Pros:

Freedom. I like being able to make any changes in my home whenever I want. There are several things I want to do around my house and if I have the money to do it, I can. If I don’t like my paint color, I can change it without having to ask anyone.

Tax Benefits. As an unmarried person with no kids, there are not a lot of things to reduce the amount of the taxes I owe the government. As a homeowner, I get to write off the interest I pay to the mortgage company each month. In addition to being able to deduct the interest I pay on my home loan, I can also deduct the cost of my homeowners’ insurance and property taxes.

Equity. Each month that I make my mortgage payment, a little bit of the money (and I do mean a little bit) goes toward the principal balance. After 30 years, if I make all of my payments as agreed, …