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Archive for March, 2009

Mucho Moolah, Monday’s Money Saving Tips…Discount membership clubs!

Monday, March 30th, 2009

Now, before I get started on this post, I would like to state for the record, that we do not do this tip…yet.

Discount membership clubs, like Sam’s Club and Costco are a great way for people to save money. For a small yearly fee, you get the opportunity to shop at this store that offers a lot of your everyday items (and other things) in bulk, at a discount. For example, at Costco you could buy Huggies Naturally Refreshing Baby Wipes in an 832 count (wow, that will last a while) for $24.99! This is a great way for people to save money in their budget. It costs a little more up front, but what you get lasts A LOT longer. However, the discount membership club is not for everyone…

Jerrill and I do not shop at the discount membership club near us (a Sam’s Club) because it is just the two of us. We are not able to use the bulk food fast enough and a lot of the food will go bad. However, if you have children, places like this are a VERY good choice.

I know a lot of people don’t shop there because they object to the fee, but if you have kids, you can probably recoup the cost of the fee in one trip to the store. Another important part of discount club shopping is to shop the sales that they run…you can save even more money! Another objection to the discount club is that it costs a lot of money to buy in bulk. Well, this is where budgeting (you know how much I think budgets can help)comes in to help you. If you buy enough stuff to last you 3 weeks at the discount club, then you should take however much you spent at the other grocery store, and save it for a total of 3 weeks to take with you to the discount club. That is the amount you should feel free to spend on the items on your grocery list. And yes, you should have a list…going to a grocery store without a grocery list is like going to an all you can eat restaurant!

OK, so you are like Jerrill and I, and there are only 2 of you, and you could not possibly use the items in bulk fast enough…what do you do? Well, we buy a lot of generic items or items that are not most expensive/top shelf. If there is a generic version of something we use, we will try it. Note everything tastes/uses the same, but the majority of it does. For example, you couldn’t pay us to eat the generic peanut butter, but I am all over the generic vitamins! The stuff we don’t buy generic we buy items that are good quality but not overpriced, like Sparkle Paper Towels. Also, as I said previously, we NEVER go to the grocery without a list and we have a weekly budget for groceries. Also, we shop the sales. I love fruits and salads, so I watch for what fruits are on sale (except bananas, which I buy EVERY week) and buy those. Last week I bought cantaloupe, but this week blackberries were on a HUGE sale, so I got those instead. I can’t urge people enough to shop the real food, versus the pre-packaged stuff…you can get some real deals!

In the end, it boils down to how big your family is, and how quickly you go through things…for now, we shop at the regular grocery store, but we are planning to start a family, and when we do, I will want to be able to buy my baby wipes and diapers in bulk!

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Friday’s Financial News…Insights into how the American is dealing with the economic downturn.

Friday, March 27th, 2009

Today’s topic is “You Told Us: How Has the Economy Affected You?” By Kathleen Harris for realsimple.com

Brief summary: A survey of nearly 30,000 people revealed some insights into the way people are feeling about the economy and their money. It revealed what they are doing to help tighten the belt on their finances to get by these days.

I love surveys like this one, because it’s kind of like taking the financial temperature of the country.

Page 1 of the article tells how people are spending less on dining out, clothing and recreational activities. I am happy to see that people are refocusing their priorities and are watching what they spend…everyone could save a little more. Where a lot of people get into trouble is eating out and recreational spending. The average American eats out only 1-2 times a week, however, where are they eating? Is the whole family with them? If they eat out at pricey restaurants with the whole family, that can get costly. Even if families are only eating out at McDonald’s 2 times a week, that is probably averaging $20 a trip, or $40 a week. That works out to be $160 a month…that will pay for lots of different things…more groceries, car insurance, health insurance etc.

Page 2 focuses on gift giving. This is a hard topic for me, because I LOVE to give gifts. The survey shows how people are either buying less gifts, or spending less on them. I myself switch to spending less on gifts when funds are tight, and think it is a good way to save cash in your budget. To those people who think they have to skip gift giving because they can’t afford something really nice, I say relax. People like to receive gifts. People REALLY like to receive gift cards! And, for the most part, people don’t care how much you spent on the gift/gift card. And if they are disappointed with your gift, it’s on them…you did what you could, and if they truly do care about you, then your gift will be perfect, because it came from you!

I was absolutely elated by page 3, where it was revealed that if given $10,000 dollars, 48% of those answering the survey would put the money in the bank, and 38% would use the money to pay off debts. All I have to say to this is this…I am excessively happy that people are finally taking notice that they are not saving enough, and I hope that when the economy recovers, they continue to save and don’t go back to their over-spending, have it now ways.

Page 4 deals with something that I don’t really do very well…cutting coupons. Those of you who cut coupons every week, I applaud you, but I have never been like you. I have tried to clip coupons and use them at the grocery, but it doesn’t work for us. We use a lot of generic products, and those products never have coupons in the paper, usually (not always) because the generic is cheaper than the name brand item with the coupon. So, coupons have never really worked for me, but, my mother swears by them! So, apparently do 64% of the respondents (combination of those who have always used them and those new to clipping coupons) to the survey, thanks to the economy. I am excited to see this as groceries are one of the easiest places to cut costs, but one that some people never put the effort into.

Page 5 reveals the how people feel about the economy (well, of the opinions of the respondents anyway). Overall, 47% of the respondents say the economy hasn’t affected their long term plans and 34% think there will be an economic upswing in a year. While I hope that is the case, I worry that the economy has not completely bottomed out yet, and therefore, might take a little longer to come back. Also, our economy is tied to other economies, so we have to watch the financial happenings in other countries (like China) to get some idea of what will happen in our economy. However, I hope those who see an upswing in a year are correct!

So, in my opinion, based on this survey, the financial temperature of the economy is sickly, but people are getting by. They simply need to remember how their parents did things when they were kids…do you remember your parents using layaway? there is a reason for that. You remember them saving up to put a down payment on a car or a house? There is a reason for that. It was the RIGHT way to do things, and according to the survey, some people are finally starting to remember/take notice.

Gallop poll resource – http://books.google.com/books?id=WOug0pzW6_IC&pg=PA481&lpg=PA481&dq=average+number+of+eating+out+per+week&source=bl&ots=b2_ny9ni7M&sig=weev3bzrbR1J6iZj-3Ii9fyP52M&hl=en&ei=-uPMSYnlHpKNtgfc1vTfCQ&sa=X&oi=book_result&resnum=3&ct=result

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Credit Cards Stink…Why Do You Want One?

Tuesday, March 24th, 2009

These days, people are a little more concerned with saving money than spending money via credit cards…this is a VERY good thing…but those credit cards are how some people got in trouble with money in the first place. Well, in spite of the good reasons people like to give and think they have for having credit cards, I cannot think of ANY good reasons to have a credit card, if your finances are set up to protect you and help you in the future. So, why do people WANT credit cards? Because they WANT things…

Credit card companies let you use their credit, otherwise known as their money, in exchange for high Annual Percentage Rates and tricky terms and conditions. In reality, they want you to mess up and pay late. They want you to get the cash advance and hope you don’t notice that the cash advance APR is higher (in most cases) than your regular rate for purchases. Why? It’s their BUSINESS to make money off of you, and you don’t care, because they make it easy for you to get things! If you have $1000 in credit card debt at an interest rate of 12%, making payments of $25 (standard minimum payment on this much debt) a month, it will take you 51 months to pay that off!! That turns out to be $1275 total…and it just goes up from there. $10,000 in debt at 12% with a payment of $150 a month takes 110 months, or 9 1/2 YEARS to pay off. You will pay a total of $16,500 to the credit card company. I don’t think anyone should be happy with that arrangement. Wouldn’t it just be easier to save up for it?

Let’s face it…a lot of people in this country are materialistic. The “keeping up with the Joneses” mentality that all of us have succumb to at some point in time keeps us begging for more credit from the credit card gods. We want things…handbags, tools, shoes, HOUSES (hello people who bought more house than they could afford) and who knows what else. So I ask again…why do you want a credit card? Well, if you can’t say that you pay off your credit card EVERY month, and if you can’t say that you have an emergency fund and don’t NEED the credit card, then you shouldn’t have one. Using credit cards because you can’t afford to pay cash for what you want is a bad idea. You should save up to buy items that are not in your budget. Credit cards are NOT a supplemental income. They are not a way for you to expand your lifestyle, and when a person uses credit cards as supplemental income it almost always comes back to haunt them.

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Mucho Moolah! Monday’s Money Saving Tips…Swap meets!

Monday, March 23rd, 2009

Today’s money saving tip regards an occasion that most people these days are probably not aware of in their “have it now, and have the best” lifestyle and attitude…the “swap meet”. Now, for those of you too young to know the term swap meet, it is an informal get together to exchange or sale your used goods. I know, it sounds a little odd, but it is a better idea than you think…read on!

No matter how “good” we try to be, we will always buy things, even when we are trying to save money. We are out somewhere, and see something awesome that we just HAVE to have. A shirt, a necklace, shoes, or if you are a man, some tools etc. Then, you take it home, and you like it, but not as much as when you were in the store. Or maybe you lose some weight and the item no longer fits…either way, at some point, you decide you don’t really want it anymore. Over a little time, you will gather up several of these items, and instead of throwing them away, you should have a swap meet party with some of your close friends!

Now, there are a few Do’s and Dont’s you should know about when you plan a swap meet:

First, DON’T be offended if some of your friends turn you down…some people just don’t like the idea of wearing things other people wore…it’s just a fact of life. so, don’t get your feelings hurt, simply move on and concentrate on the friends that DO want to participate!

Second, DO decide ahead of time on the items that should be brought. Rule out items that those attending feel too private or inappropriate to swap (i.e. undergarments). Some might also want to exclude items like shoes (the whole sweaty stinky problem), so make sure you inform the guests of the items to be excluded!

Third, DO decide how things will be exchanged/purchased and let the guests know ahead of time. For example, if you are having a jewelry swap meet, you could say that the exchange will only be for equivalent items (necklace for necklace, earrings for earrings) unless otherwise agreed upon by both people at the party.

Fourth, DON’T forget to have some money on hand in case a guest needs change to purchase something!

Fifth, DON’T forget to have some food for people to snack on, but make sure you wait til after the swap to feed them…you don’t need sticky fingers touching the merchandise!

Lastly, once all the items have been exchanged, DON’T feel that you have claim to anything you have swapped with a friend, so make sure you REALLY want to swap it in the first place!

Overall, if you have a group of friends that like to (or need to) save money, a swap meet can do double duty…you can get together with friends (which everyone loves to do) and go home with some really awesome loot for little or no money AND get rid of stuff you don’t want anymore! I hope this idea will help our readers get want they want and still have “Mucho Moolah” left over!

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Friday’s Financial News! States pick and choose from the stimulus.

Friday, March 20th, 2009

Today I am adding a new piece to the Southern Couples Guide blog called Friday’s Financial News, where I pick a news article that I think is important for our readers to know about. It will always pertain to finances, but not necessarily personal finance. Also, if any of our readers see an article that they think would be a good Friday Financial News article, feel free to send it to us in the “contact us” section of the website!

Today’s topic is “States: We’ll take stimulus – our way” from CNN Money.com

Find the article at: http://money.cnn.com/2009/03/20/news/economy/stimulus_waivers/index.htm

Brief summary: Some states are requesting that the government allow them to use their portion of the stimulus money for things other than what the government allocated it, and some are refusing to take portions of the stimulus money.

Okay, so first things first…I have to go on record that I love the idea that some states are refusing to take all the stimulus package money. That is what they SHOULD be doing. Just because the federal government says you can have some money for a particular part of your states budget does not mean that you should take it. These states are conerned that if they take money for certain projects now they will not be able to maintain them after the federal money runs out. They are correct, and for some reason, nobody seems to be talking about this. This is how the country got into some of its financial problems in the first place…borrowing to cover shortfalls, and when you can’t borrow anymore, then what? Think about the problems that will crop up for the states that do start these projects. For example, they start a program for fine arts, and they get 100 people a job on this fine arts stimulus money, which runs out in 2 years…what then? The state more than likely will not have the money to continue to fund the program, so those people are out of work again…and if this happens in 30-40 states, pretty much all at once, well, then we have another unemployment crisis! Better for those people to find a job in the private sector, and the state government not to owe the government for the program. You see, it’s a band-aid…it doesn’t actually solve the problem. These states need to remember that once the federal money dries up, they have to go back to their regualar budget, which could be quite a shock if they don’t plan ahead!

Nevada is rejecting the money the government is sending them for unemployment, because of the provisions in the bill regarding how to qualify for that money. The state government has to change the regulations on unemployment to include part time employees. That means part time employees will be eligible for unemployment benefits, but Nevada (along with other states) don’t believe the businesses that operate within their borders will be able to pay the additional costs associated with covering the ex part time employees. Well, Nevada and those states are correct. Once that money runs out, those rules and regulations will still be in place, and companies will go belly up trying to cover unemployment benefits for part time employees! That’s just what we need…people need work, and companies will have to close their doors because they can’t pay the unemployment insurance!

So, it’s my opinion that a lot of states are going to take all of this money and spend it according to the rules in place by the federal government. Overall, I’d say this is a bad idea. I applaud those states who remember that they retain their sovreighty (yes, they did) and can choose what taxpayer help they do and don’t want from the government. I worry that after a couple of years when this money has run out, that we as a nation will plunge deeper into a recession. So, check out the article and tell us what you think. I look forwar to hearing your comments!

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Sometimes, You Have to WORK…

Wednesday, March 18th, 2009

Today, I wanted to talk about going the “extra mile” to get rid of debt. Now, I know that when you’re in debt, the pressure that you feel can make you come home and just collapse, but that is the worst thing you can do. I know you feel like you’re in a hole you can’t get out of in your lifetime. I know how it feels to pay a monthly payment on a car you hate! I know you think that you’ll never get out of debt. But here is a question for you: Could you do more to get out of debt? Well, if you have debt, and don’t have a second job to pay it down quickly, then I would say you could do more!

A second job is a great way to get out of debt in a hurry. There are all sorts of side jobs that a person can pick up to make extra money. As a school teacher, you can coach one of the sports teams,monitor detention or head up one of the clubs at school…you do get paid extra for that, you know! Not a teacher? Okay, well, if you have a lawn mower, then you are already in business…just go around your neighborhood and mow the lawns of your neighbors. You can make quite a bit of money in one summer just by mowing lawns. Akin to lawn mowing is pressure washing. Pressure washing peoples homes, driveways and fences (in any combination) is a VERY lucrative business. A good pressure washer only costs around $500, and you can make that back in your first job…a word to the wise though: Know what you are doing with a pressure washer, otherwise you can damage someones property, and then you’ll be paying THEM! Not skilled at mowing lawns or pressure washers? How about being an umpire for a community parks and recreation league? Not your cup of tea? That’s ok, because you can go get a job as a delivery driver…they make good money (mostly in tips)and have flexible hours!

If none of those suggestions sounded good to you, then figure out what you are good at, and go make some money from it. Say you are a computer programmer…then find some contract work to bring in extra money. The possibilities are limitless…you just have to remember that it isn’t swallowing your pride to get a second job…There is MORE pride to be had in taking care of your family!

So, all in all, what I want you to take away from this is that you shouldn’t be hopeless when it comes to getting out of debt. Cutting back on spending and cutting costs is only one side of it…some people need more income! So, figure out what you can do to increase your income, and do it! Besides, mowing lawns gives you a tan and a mini workout…how can that be bad?

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Mucho Moolah! Monday’s Money Saving Tip! The dinner and drinks dilemma.

Monday, March 16th, 2009

Today we are starting a new part to the Southern Couples Guide Blog, the “Mucho Moolah” Monday Money Saving Tips! As the name implies, every Monday I will be sharing with you tips for saving money in your budget.

For my first Mucho Moolah post, I decided to discuss the “dinner/drinks and a movie” dilemma. When your friends or significant other asks you to go out for dinner or drinks (or both) and a movie, you might cringe at the cost. That is, if you have figured up the cost! Dinner for one is at least $15-$30, depending on where you (or your friends) decide to go. Then you throw in a couple of drinks…$3 to $7 a piece, for a total of $6 to $14. Then the movie…$10 for admission, $5 for a drink and the price just goes up… Totaling up the dinner, drinks, admission and a drink at the movie, you get $36-59 per person. That is A LOT of money. If you go out like that once a week, the hit to your pocketbook could be significant, and you might not even know it. .

So, my first tip is this: When your friend or friends ask you to go out for dinner/drinks and a movie, suggest that you go out for lunch/drinks and a matinee! .

Lunch menus are almost always less expensive than the dinner menu ($6-$12), a lot of restaurants offer a happy hour where you can get drink specials ($2-$4 a piece) and then off to the movies! A matinee is usually half the price ($5) of the evening show, and then add the drink ($5…sorry no discount). Totaling up the same outing, but earlier in the day, we get a total of $20-$30! STOP and think about that…the high end of the daytime outing in this example is LESS than the low end on the nighttime outing! You could save up to $49 per outing, depending on your effort to save! That is A LOT of money!.

I know you might feel awkward asking your friends to change to the daytime but you shouldn’t. Everybody likes to save money. Even Michelle Obama has been known to wear J. Crew clothing, and she’s the country’s First Lady!.

So, to get Mucho Moolah, say NO to dinner/drinks and a movie and YES to lunch/drinks and a matinee!.

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Financial Tips for Buying a Home…

Wednesday, March 11th, 2009

I have to say, I do agree with what I am hearing on the news and talk radio these days…now is the time to buy a home! But, only if you’re ready. As a potential home buyer, you have to have your ducks in a row, and plan out what you want and how you want to achieve those goals!

A friend of mine, who also happens to be a Real Estate Agent, Nicole Maxwell, has a blog that I’m following, that she updates several times a week, all about the Real Estate Industry. From homes for sale and tips for cleaning to cool new things for your home and navigating pitfalls while home buying. If you like to keep up with Real Estate or are looking for a home right now, she can get you started…and she has also put together some tips for me that correspond to this post in a series of 10 basic steps you need to know/take for home ownership. Check out her blog at: http://maxwellsellsgtown.blogspot.com/

The Financial Tips:

Always have a down payment – When you take out a mortgage, the bigger your down payment, the lower your monthly payment and the shorter your finance time can be. We recommend having a 20% down payment and a 15 year mortgage (if you can afford such a short finance time). Another added bonus of a 20% down payment is that you avoid the cost of mortgage insurance!

NEVER finance more than you can afford – Banks will lend you more than you can afford. It’s just the nature of the game, the same as credit cards who give you more credit than you can easily pay off. As the buyer, you should know how much you should spend…DO NOT rely on the bank to tell you what you should spend…rely on YOURSELF or a trustworthy financial counselor. Typically you want to keep your monthly payment below 30% of your take home pay per month. 25% is better, but most people can do 30%. You should know the amount you can afford per month before you look for homes. It will give you a price range of homes to look at.

Emergency Fund – When you buy a home you need an emergency fund. The emergency fund protects you from the unexpected expenses that occur…and you WILL have unexpected expenses. New furniture that you didn’t know you needed, light fixtures that need to be replaced, new paint, plumbing work etc. All of this adds up, and if you don’t have the funds to cash flow the expenses, then you either have to wait to fix it or finance (credit card) it. You should have enough money for at least 3 months worth of expenses, and any additional money to cover incidental and decorating expenses…we recommend $1,000 to $2,000 for decorating/incidentals for the average family.

Know the expenses involved with buying a home – Closing costs, inspection fees and earnest money are all costs that “crop up” when buying a home, and you should be prepared to cover those costs. All of these fees and costs range in price, so ask your Realtor what you should set aside.

Now, I’m sure that there are tons more tips I could give you, but these will get you started, and safeguard you against the basic financial pitfalls of home buying for the average buyer. So, are you ready? Well, if you can say “yes” without a doubt, then you’d better get started on the process!

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Vacations are important…

Friday, March 6th, 2009

I know that everyone is aware of the problems in the economy these days (unless, of course, you have been living under a rock) and are starting to cut back on the extravagances. Well, I believe it is important for people to cut back on things they don’t need, but for most of us, a vacation is truly a necessity. Now, most of you are worried that I have lost my mind…let me explain.

Vacations are important because throughout the year we work hard. All of us do, even if you love your job, but that doesn’t mean that you never need down time, to be by yourself or with your family. That is where vacations come into play. Whether you think a vacation is hiking somewhere, hitting the beach or going to a historic site etc., that time away from work, where you can allow your brain to think about other things, is necessary. The memories you make during that time, flipping burgers on the grill, laying on the beach or smelling the clean air up on a mountain sustain you through the rest of the year. So, what’s the proper way to plan a vacation? First things first, you need a budget. In debt? Read on…

Most of you know that a budget is just a way to plan out where all of the money you make is spent. For example, if you have $1000 a month, and rent is $600, you have $400 left for utilities, food etc. So, look in your budget, and see how much money is leftover after paying all of your bills. Let’s say you have $100 a month left over (that you aren’t putting toward savings) and you have 4 members in your family (mother, father and 2 kids)… Well, if you want to go to the beach, look up the cost of accommodations (here’s a tip – look up the cost of condos/townhomes, because they are usually more cost effective than hotels, and with a full kitchen, you can save on the cost of meals, or provide for someone with a special diet!) Now, figure up the cost of traveling to your destination…car rental, airfare, gasoline (for your own car or the rental) are all costs that need to be included. The cost of food…plan out how many meals you will eat at pricey joints and how many you are willing to cut costs on. Know what attractions are there, and figure out if there is any room in your budget for them. Shopping…it’s no secret that most women like to shop, so either save up a little for her to go spend, or set the ground rules ahead of time that there will be no shopping, with the whole family being in agreement. Think of any expenses that are specific to your family, and include them. After you have a rough estimate of the cost, look at your budget…do you have enough to pay for the type of vacation you want, if you save that $100 a month… If you do, great, book your condo and start saving. If you don’t, then you’d better choose a vacation that is less expensive, because I know you don’t want to finance a vacation. (That’s what putting a vacation on a credit card is!)

Now, if you don’t have enough to go on vacation, no matter what you do, or you are in debt (other than your house) then your choices are limited. You have to be more creative, but if your work allows you the time off, then a “Staycation” is the way to go. As the name implies, a “staycation” is where you and your family vacation at home… The concept isn’t new, only the name is fresh. A lot of people don’t want to vacation at home, but if you are in debt, then you clearly need to put your money somewhere else. If you aren’t in debt, but still don’t have enough to go somewhere, stay home that year, but still save the money… In 2 years, you should have enough. I know one of the biggest complaints is that people don’t know what to do on a staycation, and so they sit at home doing nothing. Well, you just have to be creative. First, you do have money to spend that week. Look at your weekly budget. If you spend less at the grocery (skip some things you don’t need) then you should have enough for dinner and a movie (or a matinee). Most people vacation in the summer, which means anyone can go for a picnic. Find a park and go play outdoor games with your family. Go visit some nearby relatives or friends. Rent movies to watch at home and pop some microwave popcorn. Take your kids to the skate park/skating rink/basketball court. Have a board game night. Make homemade milkshakes for the kids and for you (or something a little more stout, if you prefer). Figure out what things your family enjoys and do them together. It doesn’t have to cost money to help you relax.

So, whether your have saved up the money and are going on vacation, or you are still in debt and are having a “staycation” vacation, you can still have fun. Jerrill and I have one of each. He receives 3-4 weeks of vacation a year, so we have a vacation at home, a beach vacation, usually a long weekend trip somewhere, and the rest is used at Thanksgiving/Christmas. Figure out which type of vacation works for you, and this year, make sure you take it!

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