Saturday, January 31, 2009

Would You Take $50K Or $100K?

There was a famous survey conducted about ten years ago by economists Sara Solnick and David Hemenway.

The results revealed that that many Harvard students (and few Harvard staff members) would rather have an income of $50,000 in a world where most people were poorer than an income of $100,000 in a world where most people were richer.

If you were to take the survey, which answer will you choose? I will reveal my answer later.

Wednesday, January 28, 2009

Money Joke: When Your Kid Asks For Money...

Money Joke: When Your Kid Asks For Money...
A young man was having some money problems, and needed $200 to get his car fixed and road-worthy again. But had run out of people to borrow from.

So, he calls his parents via the operator, and reverses the charge and says to his dad, "I need to borrow two hundred dollars."

At the other end, his father says, "Sorry, I can't hear you, son, I think there may be a bad line."

The boy shouts, "Two hundred. I need two hundred dollars!"

"Sorry, I still can't hear you clearly," says his father.

The operator cuts in, "Sorry to butt in, but I can hear him perfectly."

The father says, "Oh, good. YOU send him the money!"

Monday, January 26, 2009

Are You Stunned By Bloody Job-Loss Monday?

Looking at the news, I am really stunned that over 70000 jobs are lost in a single day... worldwide of course. If this is in America alone, we are really headed for the second Great Depression.

Are You Stunned By Bloody Job-Loss Monday?
In any case, the numbers are shocking and I am beginning to worry that I could be retrenched too. If that happens, that could spell trouble for our family finances. We do have about 3 months reserve in savings but in this economic climate, jobs are not easy to come by and the disruption to my income could stretch for months.

I am motivated to cut down further on my family budget to accumulate more reserves for rainy days ahead. In fact, it is not only raining cats and dogs, it is a thunderstorm out there. I won't be giving up on my blog monetization but neither am I placing much hope on it. So far, I have earned only pennies. .

Meanwhile, I have been helping my wife to hunt for jobs too. Recently, she found a part-time job giving tuition for juniors. The money is not great, but it helps to tide us over.

How are you guys coping with the economic recession? Any tips to share?

Wednesday, January 21, 2009

Striking Gold In Garage Sales

I am ecstatic that garage sale season is back in my neighborhood again. Usually in spring and summer, garage sales appear almost at every street corner and my family is spoilt for choice.

We love to snoop around garage sales; in fact, it is one of our favorite family outing. Nothing beats the adventure of bargain hunting, discovering pleasant surprises, saving money and meeting nice people at garage sales. It is also a good work-out for us with all the walking/navigation and hauling of goods back home.

A day at the garage sale, especially if the weather is sunny and not humid, will entice droves of bargain shoppers. It is a choatic, noisy and competitive scene. I learned from experience that you have to arrive hours or at least 30 minutes ahead of time, else it is impossible to find any treasures.

Striking Gold In Garage Sales
To improve your chances of striking gold in garage sales, bring along cash and combine several items to get a better price. If the price isn't indicated, ask the seller how much they are accepting - this gives you a better negotiating position. Also, try things out and ask questions like the condition, year of purchase and specifications.

For those who want nothing to do with garage sales, thinking that all the items are cheap and dirty, it is a real pity. Here are five myths about garage sales which you should not harbor:

1. Stuff At Garage Sales Are Used Items.

This may apply for most items but they are generally in good condition. There are also brand new stuff, some are still giftwrapped and not opened yet.

2. Stuff At Garage Sales Are Dirty.

Again, this is undue worry. Sellers who are serious about offloading their goods will have the common sense to present clean and polished stuff, not caked with dirt and grime.

3. eBay Is Easier.

eBay may be more convenient as you do not need to leave your home and sweat in the hot sun but online items involve longer waits, shipping charges, fraud, and the potential for bidding wars.

4. Too time-consuming.

Actually, in a couple of hours or a summer afternoon, you can cover ten or twelve garage sales. You probably won’t find anything you want at most of these, but every so often you’ll stumble across the perfect bargain. Garage-saling takes as much or as little time as you want to spend on it.

5. Poor Negotiating Skills.

Well, I am not a negotiating genius, nor most sellers. So, it cannot hurt to try and your negotiating skills will only get better with practice.

The bottom line of garage sales are that people have things to get rid of, and your job is to help them. They only want a little money, and that's all you have to give. Garage sales are a smart shopper paradise.

People are always moving and clearing out their closets and garages. You can take redundant stuff off their hands for next to nothing if you know how bargains are made.

Even if asking price is a little steep, haggling for a lower price is common for smart shoppers at garage sales. Remember, sellers don't want to slug the stuff back home, so reasonable offers will always be entertained.

If it is your lucky day, you may even find sellers who give their stuff away for free.

Sunday, January 18, 2009

Savings From Buying In Bulk

It is a simple business fact that wholesalers profit from buying in bulk and the bigger the purchase, the stronger their bargaining power. Well, normal shoppers can also save a hefty chunk of change from buying in bulk too, but of course, our discounts are not in the same league.

To save money from our grocery shopping, we have to first get disciplined. A trip to the grocery store is anything but simple. An impulse trip can quickly add up to a huge bill, even more so if you go grocery shopping when you are feeling hungry.

Don't go to the grocery just hours before you cook your dinner. You could end up bursting your budget when you cannot resist all the delicious gourmet food decked before your eyes.

A single purposeful trip can save you time, gas, and of course, money. But before you embark on your bulk shopping, make a list of all items, from your routine toothpaste to vegetables and chicken fillets.

Go to the store and take notes of how much you normally pay for each item and the current price per unit. Once you have your shopping list and prices written out, it is time to compare costs. Often, buying in bulk should give you a discount but there could be exceptions. So, having an understanding of market prices prevent any rip-off.

The best places to sniff out are your neighborhood warehouse clubs. Sam's and Costco are great bulk shopping stores. If there are no nearby warehouse shopping clubs, you can still enjoy savings from buying in bulk at grocery stores.

Savings From Buying In BulkMeat is one item which my family pick up in large amounts, usually at a savings of a few cents per pound. Though that sounds little, those savings add up when buying ten pound packages several times during the year.

Besides the conventional brick and mortar stores, you can also do some bulk shopping online now. Stores such as Amazon are offering a grocery section where you can buy bulk groceries and have them shipped to your home.

Amazon even offers free shipping on orders of $25 or more for eligible products and has an option to set your selections to be delivered on a schedule of your choosing. However, you must still check out the price per unit of each item to ensure that you are really saving money.

Shopping in bulk is a really great way to reduce our grocery expenses and save money. The hardest part is to form the habit of preparing a list, after that, finding the best buy becomes very simple.

Knowing where to shop and buying in bulk has reduced our grocery expenses by about 40% as compared to those days when we just bungled into grocery stores and make impulse purchases.

Friday, January 16, 2009

Money Blog Carnival At Money Beagle

Money Blog Carnival #1

Money Beagle posted my article Keeping A Change Jar At Home for the Money Hacks Carnival 47.

This is the first ever carnival hosted at Money Beagle, and I think it is a job well done. There are some very informative posts in there and I love the adorable doggie pictures too.

There is something for everyone, whether you are interested in frugality, savings, economy, investing, debt/credit or income, etc. you are sure to learn useful pointers to further your financal education.

Be sure to visit the carnival and check out these great links.

Sunday, January 11, 2009

Keeping A Change Jar At Home

Keeping A Change Jar At Home
Much wealth has been destroyed and earning money is difficult in this recession. Just reading this CNN report that the job loss figure is the worst since 1945 has left us shell-shocked. Let's face it, the days of easy credit is over, thanks to the financial crisis sparked by Wall Street.

In its aftermath, I believe many Americans have started paying more attention to their money, including loose change. In the past, I was one of those people who do not give a second thought to pocket change and just leave them strewn around the house. If they are misplaced, so be it.

But since my family devised our first household budget, there is more organization to our money habits. We keep a little jar on top of our kitchen fridge where we dump our pocket change from whatever transactions of the day.

The amount of money in the change jar accumulate over time and come in handy when we suddenly need cash and the banks are closed. I’ve tapped the change jar more than once when my wallet was empty to pay for parking at the subway or our monthly newspaper subscriptions.

The idea of a change jar is very simple but it can be powerful in saving money if you keep up with it. Instead of dumping excess pocket change into a vending machine or spending on mindless items, I keep it in my pocket.

In fact, I have gone as far as to keep a lookout on the ground. If I see money lying around, even if it is just a penny, I instinctively pick it up and toss it in my pocket. On some days, it can be pretty rewarding.

Some of the best places to look are at drive-through windows and coin return slots in vending machines and pay phones. If you happen to be near one, check and see if there’s any change and if there is, keep it snugly in your pocket to drop in the jar later.

Don't worry about feeling embarrassed. Just think of it as clearing the street of some litter. Every little bit helps and it takes almost no effort at all. When I arrive home, the change are all placed into the jar, where it remains at least till the week or month.

On average days, I have about 50-75 cents in my pocket but sometimes, when I get lucky, I get about $2 of change to contribute. This means that I usually have around 15-25 dollars in the jar at the end of each month, which feels like “free money.” It’s a simple and effortless way to build up our personal savings.

If I find no particular use for the money in that month, I just drive to the bank and deposit the jar contents into our joint account. From there, I usually deposit it into a high yield savings account that will earn interest on my accumulated change.

Try out this method and when it becomes a habit, you will notice that your savings just grow without you thinking much of it.

Thursday, January 8, 2009

Save Money By Trimming Electricity Bills

Aren't you frustrated that our costs of living continue to rise despite a recession but income has stagnated and in our case, shrunk substantially.

We are trying to cope and in our monthly review of the family budget, we are tackling electricity bills aggressively as it occupies a substantial percentage of our expenses.

For two months now, we put in place certain measures and though there are lots of uneasy adjustments to make, we are comforted by the declining utility bills each month. In fact, I will say that the more effort we put in, the greater the sense of satisfaction.

Besides saving money, we are also doing our part to conserve our environment. Much of our electricity is created by coal burned at power plants. Each time we use electricity, we emit pollutants, and leave behind a ravaged environment for our children.

If you want to reduce expenses on electricity, here are a few tips for you to consider.

1. Electric Heater

Instead of running your electric heating system during winter, you could use space heaters to warm only the rooms you are using instead of the entire house. A space heater costs less than $100 and will save you over $1,000 per year.

Another way to turn down your heater is to seal up your windows, doors, and any other place where heat is escaping.

Windows can be sealed with weatherstripping, or with shrink wrap kits that you can purchase inexpensively from the home improvement store. The "plastic shield" around the window traps the warm air and keep out the cold air.

You can also turn your ceiling fans on low, or aim a small fan at the ceiling to circulate the air and prevent the room from becoming too stuffy. Fans do not require much electricity to run.

2. Washing Machines

The main cost of a washing machine is not so much the actual operating power but the amount of money you spend heating the water. Wash your laundry with cold water instead of hot, and save $180 a year or more.

3. Lighting

Fluorescent lighting is the way to go. The new energy efficient light bulbs allow you to save 30 or more watts per light bulb, and around $90 a year in electricity costs.

They will also last longer than traditional incandescent bulbs, so for situations such as emergency lights where having the light on at all times is critical, go florescent.

Don’t forget the visually impaired either, in addition to traditional emergency lights, you’ll also want a good set of braille exit signs to cater to the blind and to meet state and federal regulations.

4. Computers

When you’re not using your computer, put it in “hibernation mode” and you’ll save around $60 a year on electricity. Also, if you still have the old style monitors, upgrade to an LCD as they use less electricity.

There are many ways we can all do our part to cut down on electricity costs. Not only will our bank accounts thank us for it, but the environment will, too.

Friday, January 2, 2009

Money Management: Cooking At Home

Money Management: Cooking At Home
Once in a while, I take my family out for dinners at restaurants. My wife can take a well deserved break, and we spend some quality time together without thinking too hard about our finances.

And no, we don't go for Michelin restaurants where they serve exquisite dishes like foie gras or Kobe beef.

But it has been nearly a year since I stepped into any restaurant. This recession has really tightened our belts and cooking at home has proven to be an effective way to save money. If nothing else, you are already spared from all the tips and expensive drinks.

A lot of people don't realize that the secret to solving money woes lies in the kitchen. While value meal deals costing $2 and cheap upsizes in fast food restaurants make prepared food look expensive, the truth is that eating in is always better for your budget and health.

An Indian curry meal with ingredients and rice may cost $20, but don't forget that we can easily extract four portions from that $20, with extra ingredients left over in the cupboard. The next time I cook an Indian dish, it will be "free," so purchasing ingredients are definitely better investments than eating out.

And on days with special sales, we can even squeeze in fruits or fruit juice from the $20 food budget, which makes the meal more nutritious.

If you are ready to step into the kitchen, here are some tips to prepare you for your home cooking:

1. Focus on healthy dishes for meals

Try to avoid popping cakes or cookies into the ovens every day. To eat in a healthy and frugal manner, we should first take care of our core nutritional needs for breakfasts, lunches and suppers.

If the fridge is already stocked with a few days of food, then celebrate by cooking something special, brownies or muffins, say.

2. Never Do Without Eggs

Eggs are the "great equalizer" for those who are pinching their pennies. While eggs are way up in price, they're still great value for money. Eggs contain high level of proteins but go easy on the egg yolk which contains chlorestorol.

Try to fit in eggs for one night a week eggs. It could be supper or breakfast. Trade off making omelettes, scrambled eggs, fried eggs, frittatas, more. We keep our kitchen well-stocked with eggs as they are just so many ways of cooking it and they blend well with any ingredients.

3. Don't Get Confused By Long Lists of Ingredients

Getting a recipe book will be cheaper than ordering pizzas, provided you don't cook gourmet meals.

Choose a basic cookbook to begin — for example, Australian Women’s Weekly range, or you could even try this bestseller: 4 Ingredients by Kim McCosker and Rachael Bermingham.

There are more than 340 recipes using four or less ingredients. This is now our kitchen bible, just imagine how much money and time we save by focusing only on four ingredients?

4. Extract all the value

Whenever we cook, there will always be leftovers or by-products. Say, when we cook bacon, we save the fat in a jar in the fridge - it adds great flavor to stews and eggs. Another example is leeks. After whipping up a delicious plate of leeks with braised meat, we save the unused green parts to make our soup of the day.

On another day, we may have roasted chicken for dinner, and for supper, we just dump the carcass into a pot with sliced onion, celery, carrots or potatoes to make chicken stock. If everybody is feeling full, then just save the carcass for another day. Place it in a freezer bag and freeze for cooking on the weekend.

5. Eat for free

Get one more meal from what's on hand. It might well be an odd meal, it might even not be that tasty. But it's 'free' because if we shop and refill the fridge before all those odd bits are gone, chances are, they'll go to waste.

There are more money management tips but for now, take the first step and try out home cooking for a week and see if your family finances improve.