Category Archives: Money

Save Thousands By Focusing On The Big Picture

This is a post from Pauline of InvestmentZen.com

One thing that makes me want to bang my head against the wall is when I see people call themselves frugal, yet be the poster child for “penny wise, pound foolish”. Ok, you save and save every single day, a little here, a little there. Globally, you’re pretty miserable because you have removed all the good things out of your life. You have no more gym membership, cable TV, magazine subscriptions, you eat rice and beans day in, day out… I even met a guy who had no central heating!

He was in his 70s and he really broke my heart. When it was very cold in winter, his bedroom on the upper floor of his house became too icy to sleep in. So he would come down to the ground floor, where he had an electric heater. He would carry his mattress on his broken back, and sleep on the floor of his living room! He claimed the electric socket upstairs were too old to bear a heater. That discomfort could have been fixed with less than a thousand dollars. How far he was willing to go for the sake of saving money made me scratch my head.

That won’t make a big difference on his net worth. What will is taking action to reduce and optimize the big expenses in your life. Your mortgage for example. Rates are at historic low levels right now, and finding a mortgage refinance at just 0.5% less than what you are paying at the moment can save you thousands. Yes, thousands.

The average US home is worth around $250,000. At 4.5%, you are paying $1,266 a month over the next 30 years. These days, you can find a 30 year refinance for 3.5% on average. That means lowering your mortgage payments to $1,123 per month. Saving yourself over $50,000 in interest in the process. I did my last refinance online. I decided to pay a little for the convenience of staying with the same bank, and not having to provide a new one with the mountain of paperwork they usually require. It took about 15 minutes to drop my rate by 0.5%. No fee, no valuation, the bank had all the details already.

15 minutes of my time for thousands in saving? Any day.

This summer, I was looking for a house to buy in Southern France. I saw one that fit my needs. It was listed via a real estate agency at $700,000. I thought if I could find where it was, I would save myself the fee. The town was small, but it took me a few hours to locate the house, based on the online ad pictures. When I arrived, the owners were surprised, and said I was the first one showing up without an agent. I had spent hours on Google Maps trying to determine the neighborhoods where the house could be. Once I got there, it only took me an hour to find it. The owners said they wanted $650,000. I didn’t end up buying it, but that would have been a fine payday otherwise.

Another thing that makes me cringe is when people do not value their time. If you make $25 per hour at your day job, but walk back home instead of taking the $1 bus, you are losing on an opportunity to stay an hour more at work, and make $25. Sure, that can be your way to unwind, get some exercise,… but for people who see it from a saving standpoint, I don’t get it. Your time is better invested in yourself (trying to get a promotion, working extra hours, starting a side hustle) than trying to save a few bucks or couponing.

More and more, I am trying to focus on big lifestyle changes that will have a huge impact on my net worth, rather than pinching pennies. I chose to relocate abroad, and that cut my monthly expenses by 60%. I did not buy a car when mine got stolen last December. It has been a little inconvenience, but I have been home maybe 4 months since that happened, and in the meanwhile, the $10,000 I didn’t put on the car (plus insurance, gas, maintenance and repairs) grew on the markets. And whenever I really needed one, to bring back groceries and heavy things, I would rent one for the day, for $30.

The S&P500 had a good run since last December, returning 9.8%. My $10,000 would have yielded $980, way more than what I spent on the occasional taxi or rental. But I understand that this lifestyle switch is not for everyone.

Still, the next time you are tempted to find ways to save more, try to start with the big stuff.

How to Save Money on a Tight Budget

How to Save Money on a Tight BudgetEven a robust savings plan can be sidelined when times get tough. Often, a savings plan is the first thing to go when the economy tightens up. However, that is a big mistake because everyone needs a savings fund for short-term emergencies or long-term goals. Here are a few tips that can help to keep your savings account going strong.

Limit Spending

Eliminate unnecessary purchases, like buying donuts for the office or impromptu shopping sprees. Plan each purchase that you need to make, but also allow for unexpected necessities, like a copay for a doctor visit or unplanned dinner guests. Periodically review your checkbook or debit card register to see where those unexpected purchases occur, and then look for ways to avoid them until your budget returns to normal. Shop for low-rate credit cards and introductory offers if you must use credit.

Reduce Regular Expenses

If you aren’t already doing it each year, contact your insurance company and your utility providers to see if discounts are available. Chances are you may be eligible for a reduced bill based on changes in your eligibility status or special rates that are being offered as a promotion. A good driving record and responsible utility use may lead to unexpected premium or Bill reductions that will help to ease your budget. Take a grocery list to the supermarket to avoid overspending. According to a May 21, 2015 Gallup survey reported in an article by John Fleming titled “Americans Still Spending More, Still Not on What they Want,” 55 percent of Americans claim they were spending more for groceries than on other major purchasing categories, including utilities and car fuel.

Watch for Sales

Take advantage of special monthly, semi-annual, or annual sale events at your favorite stores. For example, a popular supermarket chain in Northeast Ohio offers an annual three-day summer sale event in August just for meat. Buyers can stock up with meat in their freezers for months to come. Some store promotions provide fuel discounts or coupons on your next purchase. To add a little extra, browse online coupon sites like Groupon.

Share the Cost

The amount of food served to an average adult in a typical restaurant these days may be as much as 50% more than it was a generation ago. That means diners are taking home plenty of doggy bags and leftovers for the next day. However, we are also paying for that extra food. To cut costs when eating out, consider ordering a child’s portion if allowed to do so. You can also split a meal with a dining companion. Carpool with neighbors or kids’ friends’ parents to save driving costs to and from school. For summer camp, share the cost of a sleeping bag with your child’s classmate’s family, and then each child take the sleeping bag to camp on different weeks.
Shop Second-Hand.

Consignment stores or thrift shops are excellent places to find great bargains on lightly used clothing, some of which can be brand-name, as well as seasonal items like a winter coat or summer T-shirts. You can also find garden supplies, quality furniture, and a host of other things that would cost far more if you paid full price and bought them new. In addition, many thrift stores offer reduced prices. For example Goodwill has a different color code reduction each week, which adds a 50 percent discount on all items purchased. Furthermore, a frequent shopper card, when full, provides another 35 percent discount. Senior citizen discounts may also apply at thrift stores, so take advantage of these ways to save money if you fall into this category.

Steps like these can help you to save hundreds of dollars a month with careful planning and controlled spending. Then continue to feed your savings account for peace of mind so that you will be prepared for the next opportunity or unexpected need.

5 Ways to Earn Extra Income

5 Ways to Earn Extra IncomeMost of us can use a little extra income from time to time. Expenses like holiday shopping, birthdays, weddings, and graduations, along with household repairs and long-term college expenses, often place extra demands on a regular monthly budget. Instead of looking for a second job, here are a few suggestions for mining personal resources that could generate extra funds.

Language Translator

If you were raised in a home where a second language was spoken, you may be fluent enough to translate for local hospitals, businesses, and charities where second language skills are often in demand. Translators can make a fair hourly rate upwards of $15 to $25. Of course, the rate depends on the organization’s need and budget. If you don’t speak another language, consider learning American Sign Language. Interpreters for the deaf and those with hearing impediments are often hired for public services, including church sermons, certain kinds of broadcast programming, and other events where those with hearing problems need special accommodations. Sign language is not hard to learn, and when you have mastered it, you will probably find ready opportunities to earn money using it. Payscale.com reports the following wages: $14.80 – $41.51hourly wage, with an average of $4.83 in hourly tips and overtime at $57.13 per hour.

Personal Assistant

Many busy people today are eager and willing to pay for a personal assistant. Services required include scheduling appointments, taking kids to and from school, getting a pet groomed, or paying bills. Potential clients include senior citizens, busy executives, and parents with hectic schedules. Work may be scheduled two or three days a week, either the same days, or as needed. Another option is to work a certain number of hours per week or month. The schedule can be worked out with each employer.

Home and Garden Services

Let your special skills earn extra income when you assist neighbors, friends, and colleagues with tasks they cannot do or do not enjoy. This might include house cleaning, laundry, lawn care, pressure washing the exterior, or decorating a room or area. Organizing closets, cupboards, and outdoor work areas are also skills in demand. Hourly rates will vary, but often start at $10 or $15, although the rate can go much higher. This may be a one-time job per client, or a regular service scheduled as needed.

Professional Consultant

If you have work experience in administration, management, or sales, there are many jobs available that let you work from home. You might become an event planner, for example, or conduct surveys using your own phone at home. You could also provide consulting services in specialty areas related to your experiences or career. Tutoring is frequently needed by educational institutions and parents. Financial planning is in demand. If you are a good listener with a counseling background or have business-related experience, you might consider becoming a life coach or a career coach by providing consulting online or by telephone. Training programs vary widely in scope, focus, and cost, but it might be worth looking into.

Writer, Editor, or Graphic Artist

Good communication skills can open doors in many areas of commerce. For example, freelance writers for website content or sales articles are often needed. The pay can vary widely, starting with minimal pay of perhaps five dollars per 500-word article, but many writers can produce an article in less than 30 minutes without research. The more experience and publication credits a writer has, the higher rate he or she can request. Someone who is especially good at writing with professional experience in the workplace, such as writing a newsletter or producing written content, may be able to edit other writers’ work for a lucrative fee. Similarly, graphic design skill is widely sought for website design, newsletter development, and other public documents and reading material.

Whatever your background experience or interests may be, chances are there is a way to earn money from it. Browse online for a better idea of jobs that are available in your areas of expertise. Then experiment on a freelance or part-time basis to see what you are good at. Before long you could be earning a regular additional paycheck that will cover your extra financial needs.

Pin It on Pinterest