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Posts Tagged ‘Spending Money’

Mucho Moolah! Monday’s Money Saving Tips…It’s all about the trade, baby!

Monday, August 17th, 2009

Today’s tip is in regard to a recent phenomenon taking hold again in our wonderful nation…Bartering.

I don’t know where the craze started to get big, but I imagine it started because of job losses and the economy slowing down. People need or want things and services, and bartering is a great way to get what you need or want without having the cash on hand. Craigslist is a great place to see modern day bartering in action. Here you can find computer “geeks” willing to fix your computer for other goods or services, or a hair stylist willing to cut/highlight/style etc. your hair for goods and services. I personally know of a hair stylist who trades her services for personal training sessions with a trainer. She wants to get in shape and the trainer needs a haircut…works out perfectly!

How to do it: Make a list of things you are competent at doing. Now, list yourself on websites like Craigslist, BarterQuest and U-Exchange. Hopefully, someone will look you up and have something you want in exchange for what you’re offering, or will be willing to buy something for you in exchange for your service.

Some precautions:

  • Be sure to have an agreement in place before the trade begins, so everyone is clear on the terms and no one can back out on the deal. If you can get something in writing or an email, that is even better!
  • If you see inappropriate behavior, report it. You could be saving someone else from a scam.
  • Try to barter locally, if you can. It’s better for your local economy and people will think twice about committing fraud so close to home (we hope).

Good luck and happy bartering!

Friday’s Financial News…Don’t Forget Frugality…

Friday, August 14th, 2009

Today’s article is Is the new frugality fading? Posted by Donna Rosato, and frankly, I’ve been worried about this for a while. Now that the “new” has worn off of the economic recession, people have apparently started loosening the purse strings…this is a big mistake!

First let me say that you should keep in mind that this data reflects only one month, and that it could just be a fluke. I know that the unemployment rate has gone down slightly, and that demand for houses has gone up, but honestly, so what! Just because the economy might be showing signs of improvement does not mean you should forget the lessons you have learned over the last several months in ways to save money and spend less. One of the reasons that people have gotten into trouble with money over the years is that they spend all that they have, or more than they have and don’t save enough for their future when they retire, or, just as bad, save for when their income is lost/interrupted, so that they have no emergency fund.

Deep down, I’m hoping that spending rose because we are in “back to school” season, and parents were spending money on their little ones clothes, crayons and paper, but I just don’t know. Americans tend to have what I think of as collective ADD, where, as a nation, we can’t keep our “eye on the ball”. When something loses its luster or lasts too long, we tend to get bored, and I think that the recession has reached that point. I ask all of you to keep your focus, save your money and spend less.

Friday’s Financial News…A week without spending money!

Friday, July 24th, 2009

Today’s article is absolutely engaging. Entitled Embrace Your Inner Cheapskate, the author, Steve Almond challenges himself to go an entire week without spending any money! Let’s just say he’s lucky his daughter isn’t bald, since he told his hairdresser he wasn’t paying that day!

As you can imagine, this did not work out the way he had hoped. With all of his objections to spending money, on from what I take from the article is a daily basis, he starts to realize just how hard that is and just how much money he actually spends on a daily/weekly basis. He realized the kinds of sacrifices he had to make in order to stay true to his word. And some of those sacrifices weren’t worth it.

The article is awesome, and definitely worth the read. As you know, Jerrill and I are always looking for ways to save money. We try to find the best deal, bargain with people, find ways to cut costs and will often buy the store brand etc. to save some money. And, we want everyone to make sacrifices to help balance their budget and grow their emergency fund/retirement savings/kids college fund. It is our goal for you to become/stay debt free…but you should keep it in perspective. For example, buying the store brand or dropping your daily $6 coffee habit might be totally worth it, but skipping your child’s birthday present might not be. Just something to keep in mind.

Why investing in a home is a MYTH…

Wednesday, July 22nd, 2009

For some reason, up until recently Americans have believed that their homes are the ultimate investment. Pair that belief with the instant gratification and conspicuous consumption attitude that has been prevalent in our society and you run into trouble. Your home is not an investment…at least not the way you think it is. It is not “the” way to save for retirement. It is not a way to “get rich quick”.

The article Home Ownership Was Never a Road to Riches makes several good points regarding the myth of investing in a home. As Professor Christopher Mayer from Columbia Business School points out, home appreciation nationally has run about 1% above inflation over time. 1% over inflation is a worse return on an investment than some CD’s! What people saw in the late 90′s through 2006 or 2007 (depending on where you were in the country) was an oddity.

The value a person gets in owning a home is that they avoid paying rent! By owning a home, you get to build equity in your home, not build equity in your landlord’s rental property. However, when you buy a larger home than you need, like a McMansion, it is simply ridiculous. People think that it makes them look smart and rich to have a large home, but if all you have is a large mortgage, and nothing in the bank to back it up, you’re not rich OR smart, you’re house poor. Plus, with a higher mortgage for this large house also comes higher taxes and higher insurance. That’s why you should buy as much home as you need, but no more than that.

So, do yourself a favor and stop thinking that home ownership is a way to save for retirement. All it is is a way to avoid paying rent! You want to save for retirement? Then do it the right way, with investment tools such as Roth IRA’s, CD’s, mutual funds etc.

Questions about investing? Please leave a comment!