One afternoon, an investment banker was riding in his limousine when he saw two men along the roadside eating grass. Disturbed, he ordered his driver to stop and he got out to investigate.
He asked one man, "Why are you eating grass?"
"We don't have any money for food," the poor man replied. "We have to eat grass."
"Well, then, you can come with me to my house and I'll feed you," the banker said.
"But sir, I have a wife and two children with me. They are over there, under that tree."
"Bring them along," the banker replied.
Turning to the other poor man he stated, "You come with us, also."
The second man, in a pitiful voice, then said, "But sir, I also have a wife and SIX children with me!
"Bring them all, as well," the banker answered.
They all entered the car, which was no easy task, even for a car as large as the limousine was.
Once underway, one of the poor fellows turned to the banker and said, "Sir, you are too kind."
"Thank you for taking all of us with you."
The banker replied, "Glad to do it. You'll really love my place. The grass is almost a foot high."
Thursday, April 30, 2009
Tuesday, April 28, 2009
Having a baby can really throw one's finances into disarray. The costs of raising a baby to age 18 is estimated between $125,000-$250,000 and that is assuming your kid sponsor his/her own way to college.
A family can expect to wash out their savings of about $9,000-$11,000 after having a baby in the first year alone (for diapers, formula, baby furniture, clothing, baby gear, etc.)
And not to forget, the delivery itself. A normal vaginal delivery costs between $5,000-$8,000, and for Cesarean delivery, you could be staring at bills of $12,000 to $15,000, depending on complications which develop. Check your insurance to see if they cover these cost.
When you are toting up these mind-boggling costs of having a baby amid a recession and your spouse is laid off, things can get pretty challenging financially. But a recession need not dampen the arrival of your bundle of joy.
I feel that bringing a child into this world is a miraculous event for any couples. Implement these baby budgeting tips, and you can prevent a lot of money squabbles by spending your money wisely instead of surviving on credit cards:
1. Make your own baby food
Occasionally, there are special sales of baby foods in your neighborhood grocery stores. You can take advantage of them but I prefer making our own baby food. It may be time-consuming but you can add whatever your baby likes to it. For homemade baby recipes, click here.
If you have more than a baby, a lot of stuff can be reused. In fact, I am a big fan of hand-me-downs as it is wasteful to throw away clothes worn by an older brother or sister which are in good condition. You save hundreds of dollars a year from buying fancy baby clothes at upmarket departmental stores. Even if you are having your first kid, you can always ask a friend or neighbor for hand-me-downs.
3. Make your own baby wipes
Baby wipes are expensive but who says you can't make your own? It's easy and shouldn't take you more than 15 minutes. Be creative and follow instructions for making your own baby wipes here.
4. Garage Sales and Thrift Stores
Although hand-me-downs is a great way to save money, you should also stake out garage sales to purchase baby cloths. Other items like cribs, toys, and other baby products are offered at a bargain price during garage sales too! Also don't forget thrift stores like Good Will where you can buy maternity clothes for only $10-$20.
5. Switch to cloth diapers
Having a baby will turn any parent into an expert diaper changer. After all, you get to perform the laborious task 10-12 times a day.
When you use disposable diapers, that is a lot of money involved every month. Thus, if you don't mind doing laundry, I recommend the use of cloth diapers. You may need more effort in washing and drying the diapers but you cut down on buying diapers and save more money.
gDiapers is environmentally friendly. They're organic and feel like cloth, so your baby will feel cozy and comfortable.
You can expect to spend (until your baby is one-year-old) between $1000-$2300 if you use milk powder or ready-to-pour liquids. That works out to about $40 a week on infant formula. Breastfeeding for a year or more will reduce these cost drastically.
Besides saving money, breastfeeding is also a healthier choice. Remember the melamine tainted milk from China? You also save time time making baby food.
It may be a good idea to borrow a breast pump or even purchase one if you're planning on having more than one baby.
Thursday, April 23, 2009
Today's Money 911 features authors David Bach (Fight for your money), Jean Chatzky (The Difference) to answer viewers' questions ranging from the great debate about debt versus savings and negotiating your college’s financial aid package.
In addition, find out how your credit score is affected by thankless credit card companies that go around lowering your spending limits, raising interest rates, and closing accounts.
Watch it below:
Wednesday, April 22, 2009
Welcome to the 1st edition of the Carnival of Money Management.
I want to give my thanks to everyone who is contributing to making this carnival a success! I would appreciate it if anyone who is featured in the carnival links back to this post.
If you want to submit an article for next week's edition, the submission form is here. Looking forward to more quality articles for my next carnival.
1. Jim DeSantis presents 3 Reasons That Can Cause Your Family Budget To Fail posted at Free Family Budgeting, saying, "Money is the only tool you have to secure your future and the future of your family and to live a good life today."
2. David presents 25 Debt Reduction Tips For Your Immediate Action Plan at Money Ning, saying, "Avoiding debt is an advice that most don’t appreciate enough until we are swamped with bills and obligations."
3. Leave Debt Behind presents Are You Responsible for Your Deceased Parents Debt?, saying, "The only time a person is responsible for a debt is when it was incurred due to a joint account or when a child is the co-signer on a loan taken by a parent."
4. Debt Free Destiny presents Why Repairing Your Credit Makes Sense and Saves You Money, saying, " It is important when you hit a financial rut and your credit score is negatively affected that you work towards getting back on track."
5. PFCreditCards presents The Credit Card Debate, saying, "Love it or hate it, credit cards are apart of our society."
6. Joe Caterisano presents Budgeting Tips posted at Penny Pinching saying, "Compulsive spending is nothing but a destructive mindset. There is no such thing as will power."
Monday, April 20, 2009
Saturday, April 18, 2009
This is normally the time of year that gas prices hike dramatically as demand increases, but the sluggish economy has prevented any hopes of the nightmarish $4 a gallon gas returning any time soon.
Nevertheless, the gas guzzling car still account for a significant portion of our family budget. To become more fuel efficient, we maintain our car in good condition with regular tune-ups and properly inflated tires.
We are also monitoring the cost of our driving habits closely by installing a tiny computer called the ScanGauge Fuel Efficiency Adviser, which provides real-time information about what's happening in the engine.
You can determine the least expensive route as you know exactly how much each trip costs. It even shows you the difference idling at one red light can make. Armed with these knowledge, saving 15-30 gallons per month and hundreds of dollars each year is easy.
Making our car more fuel efficient is not only about saving money, it can also protect the environment. As we subscribe fervently to going green, we are sad to know that the NRDC holds United States cars responsible for about 25% of greenhouse gases produced.
Besides taking the above measures to lower our exposure to fluctuating gas prices, my wife has proposed that we purchase a fuel-efficient hybrid car.
Car prices may be low but I am apprehensive of any huge commitment right now. As the economy may deteriorate further, it is not wise to compromise our cash-flow. In fact, in the worst case scenario, I may sell off the family car and consider car pooling with my neighbors or even biking to save money and cut down on emissions.
What measures have you guys undertaken to make your car more fuel efficient?
Wednesday, April 15, 2009
Calvin and Hobbes teach us a lesson on supply and demand. This is a good illustration of the abhorrent behavior of business owners, especially the fat cats on Wall Street.
They have various justifications for charging high prices for their goods and services and extracting hefty compensation packages. If you criticize them, you are labelled as anti-business, and other derogatory comments.
That is the way things work in the American model of capitalism works. The suckers are always the tireless taxpayers.
Monday, April 13, 2009
LittlePeopleWealth came up with an interesting article which lists 97 Ways to Save Money. I believe most people are already implementing some, if not most of the tips, as they go about stretching their budget.
What caught my eye was a tip about packing lunches to work. I am inspired to elaborate with my own experience. Since my wife was retrenched, she has been packing lunch boxes for me and from reviewing the family budget, we can save approximately $100-$150 per month.
Not only is the food more healthy, I can escape the same cafeteria food and there is also time for me to exercise, have fun, network, catch forty winks or get some work done during lunch hour.
Some of the tips to take note if you want to pack your own lunch box:
1. Choose one with ample capacity. You don't want to squeeze everything into a tiny lunch box and have the food or sauces spilling out, or have the contents all mashed up.
2. Insulate your lunch box well. You will not be having lunch right away, so with a good insulation and a freezer pack to keep things cool, your food will not go stale easily.
3. Try out the carrying handles or straps. Make sure they are sturdy enough, especially if you are carrying your lunch box by hand. There was once when I took public transport and my lunch ended up on the floor because the lunch box handles couldn't withstand all the jostling.
4. Easy cleanup. No matter how carefully you pack, your lunch box will end up with crumbs and spills in it, so think ahead when you buy about how easy it will be to wipe or rinse out.
5. Prepare the food which should comprise a main dish (such as a sandwich, soup, salad), fruits, snack, and a drink. Aim for variety in your lunch box each day.
6. Plan and prepare your lunch box in advance. Lesser time will be wasted in the morning and you your desired items can be purchased in bulk from the stores. I never buy food (milk, fruit juice, etc.) in single portion, it is too costly in the long run.
7. Place your lunch box in the refrigerator once it is packed, to keep perishable items from spoiling.
8. If there is a pantry in your workplace with a microwave or refrigerator, you can add even more variety to your lunch box by packing leftovers from dinner, a jar of soup (canned or homemade), or just about anything.
Friday, April 10, 2009
I never imagine there will come a day when Americans make a beeline for grocery auctions (yes, taking a number and bidding for dry and frozen food) but this idea is getting popular. There are already grocery auctions held in at least nine states from Oklahoma to New York and more are on the way!
This economic crisis has indeed changed consumer behavior. Brandishing coupons or food stamps and lowering our standards by using store brands are no longer embarrassing or a sign of frugality.
To stretch our budget to the max, coupons are passe, think grocery auctions instead. Deep discounts (as much as 50%) are available so long as you don't mind leftovers and expired or damaged products.
Though the quality and flavor may decline, the food are technically safe to eat. There is no prohibition from the Food and Drug Administration on the sale of food past its sell-by date. However, we should avoid merchandise well past expiration or severely damaged.
Also, exercise restraint during bidding as the excitment can cause you to overpay. Being savvy about unit prices in supermarkets grocery auctions is necessary to save money.
Back when I was in college, I had a part time job in a grocery and we threw away perfectly edible food that was only a day past their use-by date. Considering there are more than a billion people living in abject poverty and malnourished because of a food crisis, that is really wasteful.
It is not just about money, dumping edible food is a sin when it is a life and death matter for children in Africa. Nevertheless, grocery auctions gives me hope that Americans are no longer taking things for granted.
Though my family is suffering in this recession (like many Americans), I think all the hardships are worth it if we can emerge as a thrifty people and be more caring towards the less fortunate and our environment.
I am looking forward to more grocery auctions for products that are going to end up in the dumpster. It is a win-win solution, the store makes some money and people get discounted food.
What do you guys think?
Tuesday, April 7, 2009
Last week, I won a $50 voucher, courtesy of a lucky draw in my neighborhood cafe. It was a pleasant surprise because that is an extra $50 of savings and the way the prize fell into my lap was almost effortless.
I had dropped by the cafe to pick up a couple of Swiss rolls for breakfast and while I was checking out, the cashier handed over a slip of paper with numbers and told me it was a contest.
Well, I certainly didn't expect to win but sometimes, we can get lucky for a few minutes of our time. This contest only need me to tear off one part of the slip and dump it into their collection bin.
Over the years, I have benefitted from taking time out for lucky draws. And in this recession, there are a lot more opportunities to win prizes. Many retailers and restaurants are grappling with lower demand as consumers are hit by job losses, pay cuts and losses in investments.
Either the business owners stare into space all day long or they have to get creative and entice customers into their stores. To do that, we can expect lots of discounts, free delivery, rewards and lucky draws being unveiled. Such promotions cost money but right now, minimizing losses is the name of the game.
There are many people who are taking advantage of all the contests and are winning prizes every month. Here are some tips to join the bandwagon and increase your chances of winning in a contest.
1. Don't Neglect The Small Ones.
It is easy to be dazzled by a huge contest with a million dollar prize. But I actually prefer contests with smaller prizes as they offer better odds of winning. Not many people will be interested, and the fewer entries will work in your favor.
I know winning a T-shirt or a cup (as compared to a car) may not have you shouting hooray but it is still something free and useful around the house.
2. Give The Challenging Ones A Shot.
Many people are daunted by the challenging contests which require you to “jump through hoops” to enter. You may have to complete a survey, answer questions, or perform some other activity
Once again, fewer people will enter these types of events giving you much better odds. A few of the “hard ones” will also allow you to mail in your entries without performing any of their online tasks.
3. Only Enter The Ones You Really Want.
Many people are so anxious for a win, that they enter lucky draws with prizes that they don’t really want. Instead, be smart by skipping the ones you don’t truly care about winning, and focus only on the ones you do.
4. Follow The Rules.
Be careful not to exceed an event’s entry limit. If an event is restricted to one entry per day, and you enter it twice in the same day, you could be disqualified from the entire event.
In fact, entering more often than an event allows is the main reason people get disqualified from winning. Some event sponsors and their judging agencies are very strict. They will disqualify you for any failure to follow their rules. Always read and follow the rules carefully.
5. Be Aware Of Spam When You Divulge Information Online
Many event sponsors keep your entry information confidential, but there are black sheeps around. In fact, some events are created solely to generate mailing lists. If you are not interested in receiving mailings, remember to opt-out.
Sometimes, your mail box may still be flooded even if you exclude yourself from mailing lists. The only way to circumvent unsolicited e-mail is to create a “throw away” e-mail account.
Getting a free e-mail account through any of these services is quick and easy. Many of them also allow you to filter out unwanted messages. That can insulate your primary e-mail account from spam.
Thursday, April 2, 2009
If you cannot afford a trip down to Disney Land because of this recession, there is a new attraction in town - Fantasy Econoland. Among the thrilling experiences are:
Currency high-roller: Float like a butterfly with the euro and drop like a stone with the pound!
Chamber of horrors: Tremble at the wailing of distressed debt!
Fiscal fantasyland: Watch the economy shrivel before your very eyes as you
struggle to stop growth falling!
Bankrupt Britain: Pit your wits against the government as you try to sink sterling and bring the country to its knees!
The Severe Contest: Try your strength against a bear market!
How sad that we are experiencing the horrors of this recession, promising to live a frugal and debt-free life, but in another year or so, we may just lose ourselves in Fantasy Econoland again.
By the way, if you need a tour guide, Timothy Geithner and Ben Bernanke will be showing you around the place which is guaranteed to be a memorable experience.
And don't worry about losing money. These guys will bail you out when the fun is over.