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Saturday, October 15, 2016

Frugality and the Challenge of Raising Children

My children get off the school bus each day at around 3:30. The bus stop is two houses down from our house, so as soon as I hear the noise of the school bus near our house, I know that the children will be in the door momentarily.

I try to be right there in the living room when they get off the bus, just to provide that little bit of reassurance, so I’ll jot down my thoughts on whatever it was that I was working on and head to the living room.

We usually start things off by going through backpacks together. Mostly, it’s a way to see if there are any notes from their teacher or anything like that and it usually provides a little window into their day.

After that, we have a “free reading” time. You can read whatever you want for 30 minutes. It has to either be a print book or a non-tablet Kindle (one of the black and white ones that mostly just display books) so that there’s no peeking at games or websites. I do this with them and we mostly read stuff from the library.

Once that’s done, we do a few household chores, making sure the pets have food or water, and then there’s a bit of pre-supper free time if there’s no homework.

They tend to do a variety of things during that free time. Some days, all of us will go to a nearby park and go on a hike. Sometimes, when the youngest child requests it, we’ll go to a playground together. Often, though, the children do more individual things.

My oldest son will often go outside and practice soccer kicks if the weather is nice or play Minecraft if the weather is poor. My youngest son usually reads more or tags along with one of his two older siblings. My daughter, though, she’s a different story. She usually starts drawing.

I usually take that time to do chores, but once a week or so, one of the children will ask me to do something with them. My oldest son will ask me to help with soccer skills, for example. My favorite one, however, is when my daughter wants me to sit down with her and draw.

I’m absolutely terrible at freehand drawing, so I used to draw a lot of mediocre landscapes and stick men, but lately I’ve discovered that I get a lot of personal joy out of so-called “adult coloring” pages. They’re basically just very elaborate coloring pages, often depicting a stained glass window or a paisley print or a garden scene or an ocean scene or something. The lines are thin and the spaces are tiny and numerous. They take a long time to complete, yet there’s something about it that I find very calming.

I’ll sit there with my daughter and sometimes my youngest son and occasionally my oldest son, all of us adding color to pieces of paper. Usually, it’s quiet, but I’ll ask a few questions about how their school day went as we all fill our pages with color.

Frugality in the System

So, what’s the point of this story? The point of the story is that, even though you might not directly see it, we make a conscious effort to weave frugality into our children’s lives as they grow up.

Even in this ordinary story, there are lots of little threads of frugality that you can see if you’re looking for them.

We strongly encourage the reading of books as a hobby. Reading is an incredibly inexpensive hobby. Even if your sole means of acquiring new books to read is by buying new hardbacks, the cost per hour of entertainment and thought is usually lower than $1 per hour. If you do anything else – buying paperbacks or used books or borrowing books – the cost goes way, way down from there.

Not only is it a frugal hobby, it’s an incredibly powerful one to have in an information economy. The ability to read quickly and efficiently and turn those words on the page into ideas in your brain is one of the most valuable skills to have today.

We use the public library. While we do have many books around our home, most of our reading is done from books that come from the public library. We visit the library every few weeks to return a pile of books and check out a new pile of books. Sometimes, we’ll check out DVDs and Blurays, too, and if we’re looking at a road trip in the future, we might check out an audiobook as well.

Keeping a frugal resource like this front and center in the lives of my children means that it’s much more likely that they’ll continue to use it in their lives going forward.

We play a lot of soccer, which is a sport that needs absolutely minimal equipment. You need a ball. That’s it. If we decide to actually play a game, we usually choose natural borders and goalposts. Most of the time, we invent our own mini-games which just amount to drills of some kind, like seeing who can bounce a ball the most times without it hitting the ground or a target competition.

Not only does this help our children stay physically active, it also shows them that you can be entertained with minimal equipment. You don’t need much of anything to be entertained.

Similarly, we make extensive use of the local, state, and national park services. Using trails, nature walks, playgrounds, and other such free equipment and services gets our family outside and exercising while also appreciating nature at zero cost.

While I’m far from the best naturalist in the world, I can point out enough elements of natural beauty and peacefulness and do it often enough that I can see the appreciation building in our children, so that they, too, will be drawn as adults to using those services.

We allow limited computer and video game play, but we don’t have an overabundance of titles to choose from. Outside of the occasional holiday gift or birthday gift or the rare occasion when they save up for a new game, our children do not get new video games or computer games. They share their game collections and those collections are relatively small.

What does that mean? They’ve actually defeated most of the games that they own and the ones that get the most play are the open-ended ones like Minecraft. They don’t just play a game a few times and discard it. Instead, games get consistent play over months and years in short sessions so that they last.

We strongly encourage raw creativity with minimal guidance and from minimal materials. Independent play is a big part of our parenting style. We want our children to be able to conceive of things to do on their own as often as possible, so we try to give them big blocks of free time, especially on weekends, to come up with their own non-electronic things to do.

We don’t load them up with organized activities or kits all the time. In fact, most of the time, we just encourage them to go look for projects or invent something on their own. Make up a game. Make up an art project. Take this box of random Legos and build something with them. The cost for such activities is very minimal and it encourages them to break through boredom, solve problems, and figure out how to entertain themselves without a nonstop flood of “stuff.”

I keep my schedule arranged to minimize child care costs. Most days, I work in the morning before anyone is out of bed, then work again during the school day. I’ve intentionally chosen to have my work day end before my children get off the bus so that we can minimize the cost of child care.

This is something that’s sometimes pointed out to our children, how Sarah and I have both made choices to maximize flexibility and thus minimize our child care costs. We don’t have to pay for after-school care for our children.

A family dinner prepared at home each night is a central part of family life (if at all possible). Almost every night of the week, we have a home-cooked meal for supper. Last night, for example, we had homemade pizza. Tonight, we’re having soup and sandwiches. Tomorrow night? A simple stir fry. We gather around the dinner table, eat together, and share our reflections on the day.

Again, this sets a precedent within our children’s minds as they grow that a family dinner made at home is not only the norm, but it’s a joyful norm. It’s a way to spend time breaking bread with people you love and people who love you, eating food that other people at the table have prepared for you.

We minimize the number of extracurriculars, encouraging our children to focus on one or two at a time to find what really matches their passion and then dabble in other interests on their own. Sometimes, our children discover something that they’re really interested in and that can grow into an actual extracurricular activity. They usually discover those things during school and grow that interest during the free time that we give them.

We keep a pretty tight cap on the number of extracurriculars, however, for several reasons. One is that overburdening them with extracurriculars can add stress to their lives during the one part of their life that should be low stress. Two, they’re not going to be passionate about every extracurricular if they’re involved in a lot of them. Three, choosing a small number to focus on is substantially less expensive, especially in terms of dollars per hour of personal investment.

All of these ideas touch upon core tenets of frugality, and all of them are embedded in the ordinary routine of just an hour or two of the lives of our children.

Goals and Principles of Parenting Growing Children

While that little after school period provides a nice window into our family life, it’s actually governed by a handful of principles that seek to achieve a few key goals. Our parenting goals are very straightforward.

First, we want our children to be able to know how to entertain themselves and enjoy their leisure time without spending money. Rather than simply throwing their hands up and saying that they’re bored and then throwing money at something/anything to provide entertainment, we want them to see how they can find leisure and find joy in almost anything that they have on hand. You don’t really need much more than your body, some open space, and a nearby library to have a deeply fulfilling life, because it’s all about what you make of the things you already have rather than longing for the things that you don’t.

Second, we want our children to be self-learners and self-starters, to be curious about the world, know how to feed that curiosity, and know how to take positive action on it. If you are able to teach yourself new ideas and new skills and you’re able and willing to look at life’s problems and respond to them by learning, you’re going to be able to handle most of the problems that modern life throws at you. Often, we let our children figure out things themselves, even surprisingly complicated things. My ten year old fixed a toilet this week. I gently gave him some guidance as to how a toilet should work, but he mostly just played with the tank’s innards until he figured out the problem, came up with a solution for it, and fixed it himself. His pride was obvious.

Third, we want our children to have the skills they need to be functional and independent adults. This includes things like a positive work ethic, the ability to teach themselves what they need to know to solve problems (as mentioned above), and how to handle the basic things that they need to do in daily life. What are the things that Sarah and I have to handle in, say, a given month? Teaching the skills and knowledge needed to do those things are at the center of our parenting.

Fourth, we want our children to deeply appreciate the idea of “bang for the buck.” If you spend money, make sure that you’re getting good value for what you get. One thing I often personally do is wait a few days and then reflect on whether an expense was actually worth it. Was the $50 spent on eating out worth it? I’ll often reflect on that with the children. “What did we get out of that $50 meal that goes beyond preparing a similar meal at home for $10?” “What did I get out of buying this book instead of just getting it from the library?” Good questions like these often don’t have any answers, which is a good indication that the choice wasn’t a good “bang for the buck” choice.

Finally, we want our children to know that they are loved and supported, but that love and support doesn’t mean that we’ll make life’s challenges disappear for them. Life is going to be challenging. They’re going to have hard teachers and hard professors and, eventually, hard bosses. They’re going to take classes that challenge their mind, they’re going to face social situations that challenge their values, and they’re going to face professional situations that challenge their heart. Mom and dad aren’t going to make those challenges disappear. Instead, we want to give them everything we can to solve those challenges on their own with the knowledge that there are always two people who love and support them, no matter what.

How Those Principles Become Frugal

One natural theme running through those principles and through everything presented here is frugality. Frugality isn’t just a “lesson” that we teach our children, it’s deeply baked into how we live our lives and the choices we make as parents.

Knowing how to self-entertain with limited resources leads to frugality. Our children are constantly challenged to find ways to entertain themselves and to learn on their own without someone telling them specifically what to do and without giving them a ton of supplies. They figure out fun on their own, without stuff.

Having the confidence to tackle lots of life problems on your own (like, say, repairing a toilet) is incredibly frugal. They don’t need hand-holding or coaching to tackle the things that life throws at them. They do it themselves, and when frustration turns to asking mom or dad for help, they get just a hug and a pointer or two. Mom and Dad don’t do it for them. It’s up to them to do it. That’s because, when they do eventually succeed – and they usually do – it’s incredibly rewarding and it’s an incredible boost to self-confidence. We don’t need to throw money at problems and we’re teaching them that they don’t have to, either.

Minimizing extracurricular activities and giving plenty of space to exploring new interests and ideas is incredibly frugal. Rather than investing a lot of money in a large handful of extracurricular activities, we try to give our children plenty of space to discover new interests on their own with a minimal financial investment. Instead of signing up for the baseball team, why not try out baseball on the playground? Instead of going to expensive art sessions, why not try to emulate a van Gogh painting at the family table? Try lots of things. Figure out what clicks in your heart, and learn that it’s okay if things don’t click, even if your friends are passionate about that thing. It doesn’t take expensive extracurriculars to figure out who you are and what you’re passionate about.

Making frugal lifestyle choices normal. Simple meals cooked at home? That’s the norm, and we work to keep it as the norm. Family movie nights together in the basement with popcorn we pop ourselves? That’s the norm, and we work to keep it as the norm. Family activities that center around free things, like hikes in state parks? That’s the norm, and we work to keep it the norm. Buying store brands and using them? That’s the norm, and we work to keep it the norm. We don’t make frugal things or free things into the exception. We don’t celebrate how we’re being “frugal” this weekend and then abandoning the idea by Monday afternoon. These low-cost methods – and many others – are normal at our house. Sure, we might point out the cost-saving benefits sometimes, but the frugal choice itself is the normal choice.

Discussing the choices we make when they’re no longer fresh or emotionally fraught. One of my favorite parenting techniques – and one I use on myself – is to take a decision made a few days ago, whether it’s a money-related decision or just a personal decision, and then go through it again. Was it the right choice? Did I get the best overall outcome? Was I swayed in that moment by some emotion? I do this constantly with my own choices in order to make better choices going forward, and I often do it with my children and turn it into a conversation with them. This isn’t just useful as a problem solving discussion, but it slowly awakens a similar questioning in their own lives that will inevitably lead them to a better (and more frugal) life.

Final Thoughts

Parenting is hard. You move from the sleepless nights with a baby to the flood of basic life skill teaching with toddlers into that period of older childhood and the teen years when you’re trying to mold those children into adults with a good set of tools inside of them to handle all of the challenges that life throws at them.

I don’t want my children to repeat mistakes I’ve made, financially or otherwise. I know they’re going to make mistakes in life, but I want them to have the best set of internal tools I can possibly give them to make a better set of choices than I did.

Maybe, just maybe, they won’t wind up hundreds of thousands of dollars in debt. Maybe, just maybe, they won’t make giant career missteps. Maybe, just maybe, they won’t get caught up in a cycle of trying to impress others that inevitably leads to nothing at all.

All I can do is give them the best set of internal tools I can.

The post Frugality and the Challenge of Raising Children appeared first on The Simple Dollar.

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How to Ship Wine (Legally) Through the Mail

With the holidays fast approaching, many people aged 21 and older are getting ready to put down their kale smoothies and pick up the bottle of vino. That’s right — between Halloween, Thanksgiving, Christmas, and New Year’s Eve, drinking season is upon us. Since it’s also a time of gift-giving, many more will try to navigate the labyrinth of rules that govern how to ship wine through the mail.

For a country built by booze-loving colonials who in large part believed, “Alcohol could cure the sick, strengthen the weak, enliven the aged, and generally make the world a better place,” we Americans sure do make it complicated to ship wine to one another.

If you are ready to take up the challenge, here’s what you need to know.

How to Ship Wine: General Overview

First of all, the most important thing to keep in mind is that it’s illegal for one individual to ship any amount of wine to another person through the mail in the United States, regardless of where you live or whether you try the U.S. Postal Service, UPS, or FedEx.

That doesn’t mean you can’t send wine to someone — but you can’t just stuff it in a box and slap a few stamps on it. Unless you’re willing to take a big risk and break the law, to ship wine you need to buy it from a company who’s certified to deliver it. The good news is, plenty of companies are licensed to ship wine to most states. 

Depending on the quantity you’re sending and where it’s going, there could be additional hurdles to overcome. For instance, if you want to send wine to a friend in Oklahoma, you’re out of luck: The Sooner State doesn’t allow it, and you might be looking at a felony if you get caught trying.

While the law is mostly the same in Delaware, there’s one important loophole: If you’re a resident of Delaware and you’re visiting a winery in a different state, you can send yourself back a few bottles. 

The strictest laws, by far, are found in Utah, Oklahoma, Mississippi, Alabama, Kentucky, and Delaware. Pay particularly close attention to the rules if you’re sending wine to those states. An updated master list of all the state law nuances can be found by searching the alcohol statutes over at The National Conference of State Legislatures website

But, keep in mind that that these laws are constantly changing. Massachusetts started allowing direct shipments from vineyards only last year. If you live in a state where it’s hard to get wine, your best bet to change things is to make sure you get out and vote.

Best Ways to Ship Wine

Join a Club

If it seems like you’re constantly being bombarded with advertisements trying to get you to join the latest and greatest wine club, it’s because they’re quickly becoming a major player in the alcohol sales game. They’re also one of the easiest ways to get wine delivered to your doorstep or as a gift to someone else’s.

If price is a factor, wine clubs are increasingly a great way to go. As Sandra Hess, the founder of DTC Wine Workshops states, “There’s a lot of competition out there.” Thanks to good ol’ capitalism, the prices at wine clubs are being driven down, and there should be an affordable option available to you this holiday season. 

Order from a Winery or Vineyard

Fun fact: Every single state in the U.S. currently produces wine. Even Alaska produces wine, people! With such a plethora of wineries to choose from, you’d be wise to check whether there’s a winery near the lucky person you’re looking to send it to.

Sure, you might not be able to send them the exact bottle of California Cabernet you initially had in mind. But if they’re fans of the winery or simply like to support local businesses, ordering this way is a no-brainer. Since the whole transaction is happening in-state, there are fewer regulatory hurdles to overcome.

And if the person absolutely loves a particular wine that’s produced out of state, it never hurts to check if you can buy some from the the winery that produces it. Some wineries have special permission to ship across state lines. 

Buy Online

As is rapidly becoming the case with most industries, buying wine online is a fairly simple option. Pick one of the major online retailers (Wine Folly has  a good list of them), select a bottle that looks good, confirm they can ship wine to the state your friend lives in, and you’re all set. With Amazon.com’s entry onto the alcohol shipment scene in 2012, it’s never been easier to send wine around the country.

Meanwhile, alcohol-delivery apps such as Drizzly partner with liquor stores in major markets who can deliver booze to local residents – meaning you can order and pay for a bottle of wine to be delivered to a friend across the country in as little as an hour, all from your smartphone.  

Send a Gift Card

Okay, this isn’t technically shipping wine, but sometimes it’s the best option. For one thing, all wine shipments and deliveries require that someone at least 21 years old be there to sign for them. If your delivery happens to show up when no one’s home – or the only person around is your 14-year-old nephew — you’re out of luck. Your gift may be delayed, and the wine might even go bad sitting a shipping facility where temperatures are too high or too low. 

Giving a gift card — to a wine store, local vineyard, or other wine retailer – lets the recipient choose a local wine at his or her leisure, and there’s no chance of anything bad happening to their bottles in transit. 

Summing Up

The key to shipping wine without stressing out is to remember that the wine clubs, stores, and wineries have well-paid people on staff to make sure all the rules are followed. As long as you stick to the above options and don’t try to sneak a personal bottle to your friend via the USPS, you should be fine.

Related Articles:

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Friday, October 14, 2016

How to Find High-Risk Car Insurance

Motorists who want to save money on their car insurance should do everything they can to avoid being labeled as high-risk drivers by insurance carriers.

“If you want to keep your insurance affordable, try to keep your driving record as clean as possible,” says Nicole Farr, a spokeswoman for Arizona Insurance Institute.

Things that can put you in the high-risk group include frequent accidents, traffic tickets, and convictions for driving under the influence (DUI) of alcohol or drugs says Kevin Foley, a New Jersey insurance agent.

“If you have been driving under the influence and you are caught, it will adversely affect the cost of your insurance,” Foley says.

How do insurance companies rate drivers?

Based on their driving histories, motorists typically are placed in one of three risk groups by insurance carriers:

1. Preferred drivers: These are divers with clean driving records, without traffic citations.

2. Standard drivers: These people have reasonably good driving records, but they may have some citations.

3. Non-standard drivers: These drivers represent a higher-than-average risk because of numerous accidents, citations, or DUI convictions. Other things that can put you in this category include:

  • Allowing your insurance coverage to lapse. Insurers don’t like to see gaps in auto coverage.
  • Driving a high-performance car. These cars are expensive to repair and are more frequently involved in accidents.
  • Living in a community with a high rate of traffic accidents. You may be a safe driver, but if there are numerous accidents in your community, your insurer may charge you higher rates.
  • Having very little driving experience. Young and inexperienced drivers are considered to be at high risk for filing insurance claims.

How can non-standard and high-risk drivers find affordable insurance?

As with any consumer product, shopping around and comparing offers is the key to savings – and many major carriers insure non-standard drivers. For example, a 2016 Washington State consumer guide lists Allstate, Farmers, Nationwide, Progressive, and Safeco as providers of non-standard auto policies to state residents.

You can request a list of companies that offer non-standard or high-risk car insurance in your state by contacting your state department of insurance. The National Association of Insurance Commissioners provides a contact list for state insurance regulatory agencies.

Another way to find non-standard auto carriers it to work with an insurance broker who can contact numerous insurers on your behalf, Farr says.

Be sure to compare several quotes from different insurers to find the best rates. Non-standard drivers often can find cost breaks by contacting small insurance companies that specialize in such policies, says Farr.

Even when you’re trying to cut costs, however, you should consider whether the policy you choose has adequate protection, says Janet Ruiz, a spokeswoman for the nonprofit Insurance Information Institute. “It’s important to get the right amount of coverage for your situation,” she says.

How can you tell if a non-standard insurance company is reliable?

When you buy an auto insurance policy, it’s important to make sure that the carrier is fiscally sound so it can pay off if you have a claim.

Before you choose a policy, you may wish to request information about its business practices and performance from the National Association of Insurance Commissioners’ Consumer Information Source. This online feature offers facts about insurance complaints, licensing, and finances.

Another source of information is A.M. Best’s online Consumer Insurance Center. A.M. Best rates insurance companies by reviewing their financial performance and fiscal stability.

What if no one will sell you a policy?

If you can’t buy non-standard insurance because you represent a very high claims risk, your state department of motor vehicles may place you in an assigned-risk auto insurance pool.

This is a last resort, since the cost of coverage typically is very high in such pools, says Foley. “You want to avoid the assigned-risk pool if you can.”

Insurance companies are typically required by government regulators to insure a share of a state’s high-risk drivers, based on the amount of policies they sell. Once you’re in an assigned-risk insurance pool, you may pay more than double the amount you would pay for a policy on the open market.

Before you can buy a policy outside the assigned-risk pool, you’ll have to demonstrate that you’ve become a more responsible driver. You may need to remain a part of the pool for two or more years, Farr says.

During that time, “you need to be prepared to pay some pretty high insurance premiums,” she says. “That’s where it hurts, in the wallet.”

Related Articles: 

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‘What Do You Want for the Holidays?’ for Frugally-Minded Folks

My extended family has always been very passionate about giving gifts. We enjoy hunting for and finding interesting gifts for each other. We often make gifts for each other, too, which can require a lot of lead time.

However, sometimes, about this time of the year, we realize that we simply have no ideas as to what the other person might like as a gift.

Often, we simply ask. I’ll often get a few emails and Facebook messages and texts during October asking for ideas, not just for myself, but for other people. At other times, we start brainstorming.

I know I’m not alone in this. This year, I’ve already had spouses of my friends that I don’t normally exchange gifts with asking for ideas. I’ve also already been planning many gifts and have already started making a few things and have purchased a few items as well.

Often, the hardest part is the idea. What can you give to someone that they’ll really enjoy that you can find at an inexpensive price? What can you make for someone that they’ll really enjoy, particularly if that person is frugal?

Here are some of the ideas I always turn to, both as a gift giver and as a frugal person who is sometimes asked for gift ideas.

Experiences An experience is a wonderful gift because it’s usually something new for the recipient (or else a repeat of something deeply enjoyed), it’s not something that requires storage space, and it’s almost always something that a frugal person wouldn’t buy for themselves.

What kind of things does the recipient enjoy doing? How exactly can you create a worry-free “deluxe” version of that experience for that person? That’s the idea behind an “experience” gift – to take something they enjoy and find a way to amp it up.

One great frugal way to do this is to remove some worry from their life so that they can simply enjoy something without concern. If that person is a parent, for example, you might “gift” them some hours or a day or even a weekend of child care so that they can go do something that they care about. You might even bundle that idea in with the child care offer, like giving someone concert tickets or passes to a convention and a note that you’ll watch their kids during that event.

For example, I personally like child care as a gift if it comes from a trusted friend or relative that enables me to go do something I really enjoy that I might otherwise skip due to family responsibilities. I enjoy nice meals at restaurants, too.

Consumables Everyone consumes food or drink during their lives. Many frugal people choose to reduce the cost of their food and drink as much as possible, meaning that they often skip over things like eating meals out on the town or trying interesting (read: expensive) food or beverage items.

For example, you might know someone who occasionally “splurges” and buys themselves an entry-level craft beer like a bottle of Sam Adams at a restaurant. That person might deeply enjoy a top-flight craft beer as a gift. You might know someone who occasionally buys a bar of inexpensive chocolate at the grocery store. A few bars of amazing chocolate can make for a spectacular gift for that person. A person who uses highly inexpensive coffee for their morning beverage might really relish a bag or two of high-end ground coffee.

These are gifts that are meant to be consumed and enjoyed. They are things that the recipient often won’t bother – or be able – to splurge for. It’s easy to find ideas – just spend time with the person and watch what things that they consume that they also seem to enjoy.

For example, I always enjoy a bomber or a six pack of some type of unusual craft beer. I rarely buy any, but that’s because I usually make some at home and I don’t drink very much – maybe one or two bottles a week – but when I do, I enjoy them. I also tend to enjoy cheeses, especially well-aged blue cheeses.

Higher-end practical items Frugal people tend to love practical items, items that they will use again and again in their daily lives. If there’s an item that they use a lot that’s looking worn, a well-made reliable replacement for that item – particularly one that you researched a bit in order to find one that’s actually well-regarded – is going to be a wonderful gift.

What does that person do every day? Do they cook at home? If so, kitchen tools are a good gift. You can also look at things that everyone does every day, like sleeping. A well-made set of bedsheets is going to be a great gift for a frugal person.

Another personal example: I almost always like well-made basic kitchen tools. A great paring knife, for example, is a welcome gift, as would be a bamboo cutting board. I also love flannel sheets – sure, it’s a boring gift, but few things make me happier than flannel sheets on my bed in the winter.

DIY items Many frugal people tend to embark on do-it-yourself projects, where they handle minor home improvements and home repairs on their own without calling in an expert. This often means trips to the hardware store on a regular basis.

This is why a gift card to a home improvement store is a very good fall-back gift for frugal people. Sure, it’s not imaginative, but a frugal person is definitely going to use such a card. It will often be enough to convince them to take on some project that they might have been putting off – if they can now get that replacement doorbell for free, it might just be time to replace that doorbell, for example.

If you spend time with that person, you can also rummage through their toolbox and watch what tools they use and then upgrade those tools for them. For example, if they have cheap plastic-grip screwdrivers that look kind of beat up, you might replace them with some Klein cushion grip screwdrivers.

Self-improvement items This can be kind of a tricky area if you don’t know the person well, but most frugal people do welcome self-improvement items. I’ve found that if a person I care about is talking a lot about an area of self-improvement, doing some homework and finding a great book or other key resource on the topic almost always makes for a great gift.

For example, if a frugal person is talking about getting more exercise, you might want to do some homework and get that person a Fitbit, which can really help with encouraging more walking, or a book on body weight exercises at home like this one. If a frugal person is talking about trying to organize their time better, get that person a copy of Getting Things Done.

Right now, I’m really into learning more about meditation and improving my personal ability to focus, so books on meditation would be a great gift for me. I’m also passionate about the big questions in life and understanding them better, so books on philosophy are always good ones for me. These are things that people can easily become aware of about me if they spend much time around me.

Hobby items Hobbies can be a tricky thing because you’re often unsure as to what items they have related to that hobby. One great way to find out is to simply examine their collections and then do some quick research on your phone for an item they don’t have that they might love. Another even better strategy is to find out if they participate in an online community related to their hobby and simply lurk there a little bit, seeing if they mention any specific items that they’d like or if they have a wishlist.

For a personal example, I’m an active member on BoardGameGeek, which is related to my hobby of board gaming. If a friend or family member wants to get me a game, they’ve been known in the past to check out my account there, where I keep an updated “wish list,” primarily to facilitate game trading but also to help anyone who might be peeking for such a reason.

A final thought: think about the giver. If the giver has a passion for, say, making home brewed beer, suggest that the person give you a six pack of their home brew. If the giver has access to, say, books or hobby items at a discount because of their job, suggest items that they can get at a discount.

The same is true for you. What are you skilled at making? Taking advantage of that skill means that you can produce a gift of much higher quality than the financial cost. Similarly, what special discounts do you have available to you? Again, using those discounts can enable you to buy a much higher quality gift than the sticker price.

In the end, it’s all about paying attention. The best gifts for anyone – frugal or otherwise – often appear right in front of you if you just pay attention a little bit. A person frustrated with an item they use regularly? That’s a big clue. A person longing for a particular item but not buying it? That’s a big clue. A person who’s passionate about a particular hobby or a particular type of item? That’s another big clue. Just pay attention and put some thought in and you’ll never go wrong.

Good luck!

The post ‘What Do You Want for the Holidays?’ for Frugally-Minded Folks appeared first on The Simple Dollar.

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Thursday, October 13, 2016

21 Thoughts I had when I Landed In Nepal After 3 Years!

I had been away from home for last 3 years and recently came back to Nepal. Do you know what does that mean? Excitement, happiness, emotions, nostalgia, and a lot of feelings — good feelings. So, without further ado, these are the 21 thoughts I had when I entered Nepal after over three years.

1. Wow! Everthing is so green from up here.

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2. It must be Kathmandu now. So many houses and tall buildings everywhere – pretty much the same as before, I guess.

3. <Captain Announces: “We’re about to land in Kathmandu.> Damn! Is this for real?

4. Aaaaaaand we land! Woot woot! Namaste Nepal – my favorite country in the entire freaking world.

5. Aaah! This air!

6. There’s the bus. Let’s go inside the airport now. Tadadada!

7. Aww! Niti baini welcomed me.

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Niti Shah!

8. I wonder who all have come to receive me.

9. Here we are. Let’s go and grab the luggage now.

10. My flight no. is still not listed on the screen. Guess I’ll have to wait for a while.

11. Wait! That looks like my bag. But my flight no. is still not listed. How come..?? Whatever, I’ll just grab my bag.

12. And there’s the other one. Let’s get the hell out of here now.

13. Aah! Everyone speaks Nepali. Eargasm!

14. Now, where my people at? There they are! Happinessssssssss!

15. Finally! Meeting my family after years. I am the happiest person on earth right now.

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Familyyyyyyyy!

16. They say Tribhuvan International Airport is one of the worst international airports in the world but not even the finest airports have ever given me so much happiness.

17. Come on, let’s hit the road now. Can’t wait to see how much the capital has changed.

18. Why is everyone honking so much!?

19. Is that where Dharhara used to be? I think I am gonna cry right now.

20. Hmm! The roads look pretty good.

21. Here we are. *Dances*

I moved to Pokhara, the beautiful town I call home, the next day.

That’s it amigos! Until next post.

The post 21 Thoughts I had when I Landed In Nepal After 3 Years! appeared first on NeoStuffs.

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31 Days to Financial Independence (Day 9): Trimming Your Spending – Transportation

“31 Days to Financial Independence” is an ongoing series that appears every Thursday on The Simple Dollar. You might want to start this series from the beginning!

Last time, we started looking at the average American family budget, going through each category and examining how one could trim the cost of typical expenses in that category. Here’s the “average American family budget” that we’re looking at, along with links back to the earlier entries on those specific areas:

Housing – $10,080
Transportation – $9,004
Taxes – $7,432
Utilities – $7,068
Food – $6,602
Insurance (including things like pensions) – $5,528
Debt Payments – $5,252
Healthcare – $3,631
Entertainment – $2,564
Cash Contributions – $1,834
Apparel and Services – $1,604
Education – $1,138
Vices – $775
Miscellaneous – $664
Personal Care – $608
TOTAL – $63,784

Today, we’re going to look at the next category in this budget – transportation. It’s the budget category you tap whenever you buy gas, make a car payment, get an oil change, fly somewhere, take a taxi or Uber, or use mass transit. Unsurprisingly, transportation gobbles up almost $10,000 a year in the average family budget.

So, how does the average American actually transport themselves from place to place?

The average American family owns 2.28 cars. 85% of new cars and 53% of used cars are financed, according to Business Insider. Car loans are simply a reality for the majority of Americans, as are all of the costs of car ownership and operation.

Gallup reports that the average American takes 2.2 airline flights per year. That’s an average, of course; many Americans take zero, while some Americans take many more than two or three flights a year.

What this data boils down to is this: Most Americans use their car for transportation to and from work and for local errands most of the time and then travel further distances on relatively rare occasion, using planes, cars, trains, buses, and other means. So, what we’re going to look at are mechanisms for reducing the costs of that picture. If that represents the average American’s transportation habits, how can the average American save money on transportation?

Exercise #9 – Cutting Back on Transportation Spending

The rest of this article consists of a long list of specific tactics that you can use to trim your annual transportation costs. Given that everyone lives a somewhat different life, some of these tactics are going to seem useful and sensible to you, others will seem like a stretch to you, and still others won’t apply at all. That’s okay. Ignore the ones that don’t apply. Make an effort to adopt the most sensible ones. Then, give the others a trial run and see if it’s something that can work for you. Commit to some of the challenging ones for 30 days and see if they work, or apply them during the relatively rare situations when those costs come up.

Remember, your overall goal is to cut back hard on the areas of life that are less important to you – the shallows – so that you can afford the “deep” areas of your life both today and tomorrow. Keep that in mind as you read each tip. Is this tip cutting back on something that’s really important to me, that amounts to a core life value? If not, why not cut it so that I can afford those things that really matter?

Let’s dig in.

Take public transportation to and from work. Instead of driving your car to work, take the bus or the train or the subway to work and back. If you assume that every mile you drive in your car effectively costs you around $0.60 once you figure in gas, oil, other maintenance tasks, insurance, registration, and so forth – that number is rounded down from AAA’s actual estimate – then if you have a 10-mile commute to work each way, your cost is going to be $12 a day for commuting in your own car, or $60 a week. Seven-day mass transit passes in almost every metro area range from $20 to $35 and longer-term ones are even cheaper per day. In other words, if you drive more than, say, seven or eight miles each way to work, mass transit is cheaper and the further you commute, the better the deal is.

Organize a carpool. For a lot of people, mass transit isn’t an option. If you live in a smaller city or a town, it might not be available or cost-effective. However, organizing a carpool might make a lot of sense. Is there anyone else who lives near you who works near where you do and has similar hours? If so, driving back and forth to work with that person even once or twice a week can save you both money. If you have a 20-mile round-trip commute and can share a ride with someone else twice a week, that means you’re eliminating 20 miles of driving per week, which given the earlier number saves you $12 a week – or $624 a year. That’s a lot of savings, and it gets even bigger with more frequent ride sharing, a longer commute, or more carpool participants.

Walk or bicycle to work, especially when the weather is nice. If you happen to live pretty close to your workplace, it might actually be cost-efficient to walk or ride a bicycle to work instead of driving or taking mass transit. Not only does that reduce the cost of the commute to effectively zero, it also provides some mild exercise along the way. For several years, I had a four-mile bicycle commute that enabled me to avoid the cost of a car or a mass transit permit.

Optimize the route you regularly take to and from work. If you’re still committed to driving to and from work every day, make sure that your route is as efficient as possible. It’s very likely that you’re using the route you initially discovered to get to and from work, and that route may not be the most efficient one. Spend some time with a GPS program to see whether or not there is a more efficient path to your workplace. Just shaving a single mile off of your drive each and every day adds up to $312 in savings per year (if we stick with that $0.60/mile metric).

Drive efficiently. If you drive efficiently, you can maximize the number of miles that you get out of a tank of gas. Some simple tweaks to your driving technique can really help. Don’t accelerate hard unless absolutely necessary. Don’t brake unless necessary, either. Instead, simply drive as steadily as possible, allow the vehicle to naturally pick up speed when going down hills, and don’t accelerate going up hills – instead, gradually regain your original speed once past the hill. Stick to the speed limit and try to avoid going over 65 mph if you can help it as fuel efficiency goes rapidly downhill at those speeds. Plan ahead so that you can turn right most of the time instead of turning left, as it drastically reduces idling time in cities. Little driving tweaks like that will make your car a lot more efficient.

Turn off the engine when waiting more than a few seconds. If you’re waiting for someone to run an errand or waiting on construction, turn off the engine on your car. Leaving your engine running while you just sit there in park consumes fuel. While this is a minor thing, it’s such a simple step that takes no time at all and it does save money.

Keep your tires properly inflated. Buy a $1 tire pressure gauge from your local auto supply store and keep it in your glove box. Whenever you’re at a gas station and you’re waiting for someone to finish up their business inside, check your tire pressure and make sure it matches the pressure recommended in your car manual. If it’s low, drive over to the free air pump and fill up each tire to the recommended pressure – it’s incredibly easy to do, not much more complex than pumping gas. Every two PSI (the pressure number given to you by your gauge) that your tires are below the recommended pressure costs you 1% in fuel efficiency. So, if your recommended PSI is 35 and your tires average 23, filling them up improves your fuel efficiency by 6% for free. That’s a 6% reduction in your gasoline costs to keep your car going. (Of course, air slowly leaks over time, so you’ll have to do it again in the future.)

Use the discount card associated with your local gas station chain of choice. Most gas station chains offer a Visa or MasterCard that offers some sort of significant discount when buying gas, either in the form of direct savings at the pump or a very good cash back rate or rewards rate. Sign up for this card, use it exclusively for gas purchases, and pay the bill off in full every month and you’ll naturally reduce the overall cost of your fuel.

Buy gas on the “smart” side of state lines. If you cross state lines during the course of your drive, make sure that you buy your gas in the state with the better gas prices. Some state borders see differences of as much as 15% per gallon, so stopping for gas on the right side of the border makes a lot of sense. It’s also worthwhile to avoid gas stations right near the state border, as they are often a bit pricier than stations closer to the interior of the less expensive state. One great tool for helping out with this is the GasBuddy smartphone app, which helps you find the best deals on gas along your route.

Shop around for car maintenance and repairs. If your car is rattling and clanking, don’t hesitate to ask around your social network for recommendations. Furthermore, don’t hesitate to go to multiple repair shops to get an estimate on the repair before making a decision. Different shops will sometimes diagnose different things and also give you different bills for the same problem. If you need a third or a fourth opinion, don’t be afraid to get one, then go with the reputable shop that offers you the best deal. Not only will this process save you some money, it’ll also save you some headaches, too.

Do basic maintenance and repairs yourself. The cost of changing your own oil is substantially cheaper than doing it at the car shop or at the oil change place – and it’s a really easy task. The same is true for many minor car repairs and other tasks, like changing windshield wiper blades, checking and changing transmission fluid, changing an air filter or an oil filter, and so on. These tasks are explained with great clarity in your owner’s manual and you can easily find YouTube videos to help you with any rough spots. All of these tasks take just a few minutes at home and save you substantially over the cost of paying someone to do it.

When a car is paid off, keep making “car payments” to a savings account. It’s easy to think “freedom!” when you’ve paid off a car loan, but instead of just pocketing the money you’re no longer paying on that car loan each month, put that same amount in a savings account instead. Let’s say, for example, that you got a $10,000 car loan over 60 months with a 3% interest rate. That means your monthly payments would be $180 a month (and you’d pay a total of $781 in interest). At the end of that loan, start putting $180 a month into savings instead. After 60 months, assuming your savings account returns 1% annually, you’d have $11,018 in that account and you could buy that car with cash. Doing things this way means that, going forward, the interest works for you. You can actually save a little less each month and then always have the cash you need to replace a car.

Drive your current car until mechanical issues begin to mount rather than quickly getting a “new” car. Many people get a desire for a new car while their current automobile has many more good miles left on it. That’s a huge financial misstep. The best strategy is to continue to drive your current car until repair bills begin to mount and upcoming major problems begin to loom, then trade in the car on a replacement model. Follow the above strategy in selecting a reliable late model used car and you’ll find yourself in the most financially efficient car replacement cycle.

Buy late-model used cars with good fuel efficiency from reliable manufacturers. This is absolutely the best way to maximize the number of reliable years you’ll get from a car for your dollar. New cars have a longer lifespan, of course, but you pay a lot for those first few years. Older cars are cheaper, but have a much shorter lifespan. The sweet spot is in the middle, with cars that are between three and five years old that are manufactured by reliable car manufacturers like Honda and Toyota. Make those cars your priority when buying a new one.

Reduce your family’s total car count by one. If your family currently has three cars, ask yourself if you can make things work with two cars. If you have two cars, can you make things work with one car? If you can, not only do you recoup the value of the car (likely using that money to pay off other car loans or other debts), but you eliminate the annual cost of registration and the monthly cost of insurance as well. You also likely become somewhat more efficient in terms of how much you drive. That’s a pretty significant bundle of cash.

Evaluate many modes of transportation for longer trips. Is it less expensive to fly and rent a car at your destination? What about taking a bus, or a train? Do you really need a car at your destination? What about driving your own car? Taking the time to figure out which option is the least expensive for you can make all the difference in the world. Here’s a great “fly or drive” calculator that can help you figure out which move is right for you.

Be flexible in terms of flying. If at all possible, be flexible in terms of the times you need to fly. Shop for flights well in advance of when you might consider traveling and purchase tickets during inexpensive periods. Compare flights at different times and on different days of the week to see how the prices compare, then do trip planning around the inexpensive fights. This works well for some purposes, like planning out a family vacation.

Pack a smart carry-on bag. Put a number of small snacks and an empty water bottle into your carry-on bag when flying. You can easily fill up the water bottle once you’re through airport security, saving you the price of expensive airline beverages. The same philosophy is true with snacks that you bring through security, as they can save you the price of expensive airline snacks and meals.

Consider other means for taking extra luggage home. If your airline charges a hefty fee for checking your bags, consider shipping a large box with your belongings home using a shipping service. Not only is it potentially a lot cheaper than checking a bag, it also can make the trip more convenient (and there’s a lower likelihood of a lost bag, to boot). It’s well worth the time to compare the costs.

Again, the key thing to remember when considering all of these options is that your overall goal is to cut back hard on the areas of life that are less important to you – the shallows – so that you can afford the “deep” areas of your life both today and tomorrow. As you consider each tip, give some serious thought as to whether or not that particular tip affects something that’s truly one of the “deep” areas of your life or whether or not you’re just acting reflexively. Is this thing really important to you, especially when compared to the things that are most important in your life?

Next time, we’ll keep digging through the categories in that average American budget.

Related Articles:

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Five Careers Where Being Frugal Pays Off

Being frugal is an asset in any career path. After all, you never know when markets will shift and your occupation will go from in-demand to “not accepting resumes at this time.” Even when it’s a job seeker’s market, you’re better off knowing how to stretch a dollar. Put yourself in the hiring manager’s shoes. Which candidate do you want: the one who spends money like it’s his actual job, or the one who can make the budget go just a little bit further?

That said, there are some jobs were being frugal is a necessity. If you have one of these jobs, or are thinking of changing careers to one of them, your ability to save and spend judiciously will serve you in good stead.

Teacher

When we were kids, back-to-school shopping meant stocking up on supplies for yourself. Nowadays, it’s about filling the communal art supply cupboard. (Or possibly outfitting an entire copy shop. How else can you explain school supply lists that include things like 12 glue sticks and two reams of printer paper?)

Parents find this frustrating, understandably, but there’s a reason for these crazy lists: many schools no longer have a budget for these supplies, and without donations, kids go without.

Still, not everyone can afford to send their kids off to school with 70 brand-name pencils, so teachers often chip in their own cash to make up the difference. Regardless, being able to do more with less is practically an occupational requirement for teachers.

Entrepreneur

People who work the 9-to-5 grind often dream about owning their own business and being in control of their time, but successful entrepreneurs aren’t sleeping in and spending money on fancy office furniture and long lunches. When you’re working for yourself, you know how much money is worth.

In fact, many fledgling business owners pay themselves last, preferring to pour most of their earnings into developing the business. It’s a strategy that can pay off in the long run, but it requires a willingness to sacrifice now. The longer you can get by on less, however, the longer runway you’ll have to get your new business off the ground and profitable, and the better you’ll be able to weather lean times.

Tax Preparer

Frugality isn’t about refusing to spend money; it’s about spending wisely. Tax preparers need to advise their clients on deductions they can take today and strategies that will reduce their tax bill even further the next time around. Want to know if that dinner out counts as a business meal, or whether you can deduct the cost of using your personal vehicle for work? Tax preparers are trained to find cash where you’d least expect it.

Office Manager

Office managers do everything from ordering supplies to managing the front of the office to distributing keys and access codes. In everything they do, however, there’s one common theme: keep things running, and don’t waste money doing it. Beyond that, the best office managers are also adept at making sure other employees don’t spend the company’s cash faster than it comes in, by monitoring expenses and keeping costs low.

Stay-at-Home Parent

You can argue about whether or not stay-at-home parent is a job — it doesn’t come with a paycheck, per se, or benefits, and it sure doesn’t come with vacation time — but it’s definitely work. Stay-at-home parents can also add to the family’s bottom line by saving money as well. In some cases, when expenses tally up, stay-at-home parents can save as much or more money than they’d bring in otherwise.

Consider the staggering cost of childcare, plus smaller expenses — like takeout, coffee, gas or a transit pass, a cleaning service, and all the other little things you might wind up paying for when you work outside the home — and staying at home can start to make more financial sense than at first glance.

Having a frugal parent on the home front can relieve expenses even further — and you don’t have to be an extreme couponer to do it, either. (Although, if that appeals, there’s a right way to go about it, so you don’t risk spending more time on the project than it’s worth.) For example, if staying home means you’re able to prepare most meals yourself and rely less on takeout or dining out, that can up add up to hundreds of dollars a month in savings. And if being home allows you to devote a bit more time and headspace to managing your money, you may be surprised by the payoff.

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Wednesday, October 12, 2016

How to Choose the Best Mortgage

You’ve found a home you love. That’s great! But for most buyers, it’s only half the battle — next you have to secure a mortgage. The idea of researching loans and rates, talking with lenders about points and other fine-print items, and gathering all the financial documents you’ll need just to apply for a mortgage might seem like a hair-pulling task, but it doesn’t have to be.

By understanding your own needs and taking stock of your situation, you can more easily find a home loan that’s right for you. If you’re wondering how to choose the best mortgage, start by asking yourself these three questions:

Question 1: How much can you put down?

You’ll hear “20% down” over and over as you research the home buying process. The reason is that, if you’re able to make a down payment of at least 20% of the home’s price, you’ll enjoy lower interest rates, and you’ll pay little or no private mortgage insurance (PMI). A good-sized down payment essentially protects the lender in case you stop paying your mortgage — in its absence, PMI is a type of insurance that offers lenders that protection instead. PMI can run as high as 1.5% of the entire loan annually — in addition to your loan payments — so it can really add up.

If you have enough cash saved up (or equity in your current home) to put down 20% toward the cost of your new home, and you have very good credit, you can take advantage of a conforming or conventional mortgage. Interest rates on conventional loans are typically among the best you’ll find, and you can avoid the added expense of PMI.

If you can’t afford to put down 20%, or if your credit score isn’t as stellar as you’d like, you don’t have to fret. There are many options still available (especially for first-time home buyers), including the conventional 97 LTV, a loan available through Fannie Mae and Freddie Mac requiring as little as 3% down. The nice thing about the conventional 97 LTV loan is that you can use a cash gift toward your down payment, and it’s available to current homeowners as well as first-time home buyers. The downside is that it only applies to 30-year, fixed rate mortgages.

You can also look into a FHA loans, which are backed by the Federal Housing Administration. You can put down as little as 3.5% for this type of mortgage. You may also benefit from reduced closing costs, although your interest rate may then be higher. Two mortgage insurance premiums are required for FHA loans.

Veterans and their families have a great opportunity to purchase a house using a VA loan. You’re not required to put any money down with a VA loan, and you don’t have to pay mortgage insurance. One-time funding fees do apply, but these can be reduced by making a down payment.

Question 2: How long are you planning to stay in the home?

This is perhaps the biggest question you must ask yourself before buying a home — because if you’re only planning to stay somewhere for a couple of years, you’d probably be better off renting in most cases. But how long you intend to stay in your home can also determine which type of mortgage will work best for you: fixed or adjustable rate.

A fixed-rate mortgage is just that — fixed. The rate you agree to when you get your loan is the rate you will pay throughout the life of your mortgage, unless interest rates drop and you decide to refinance your mortgage. The advantage of having a fixed rate is that you know exactly what you’ll be paying now and in the future. This is especially appealing for those who plan to stay in their home for a decade or more. A 30-year, fixed interest rate loan often gets easier to pay the longer you own your house, as both your earnings and price inflation on everything else inch steadily upward, hopefully allowing you to add to your financial wealth.

However, the certainty that a fixed rate affords comes at a small price premium: Adjustable rate mortgages (ARMs) typically start out with interest rates that are often about half a percentage point lower than fixed-rate loans. Most ARMs allow you to lock in that low interest rate for a set period of time — typically five or seven years – after which your rate will re-adjust annually based on market conditions, usually with caps on how much it can increase in a given year and overall. So on a 5/1 ARM, for example, you might lock in an enticing interest rate of 2.75% for the first five years, after which it could increase no more than two percentage points a year up to a cap of say, 10%, depending on market rates at the time.

If you sell or pay off your home before those five years are up, none of that matters. So if you’re looking to buy a “starter” home — one you expect to serve you well for about five to 10 years, but fully anticipate outgrowing at some point – an ARM may suit you best, as your rate and payments would likely be much lower those first five to seven years. And if you plan to pay off the house in short order, an ARM is a great way to go. Just remember that, once the initial fixed-rate period ends, you’ll largely be at the mercy of current interest rates – and your monthly mortgage payment could rise dramatically and indefinitely.

Question 3: How much is it really going to cost you?

You’ve figured out your needs and zeroed in on a mortgage that seems just right for you. You’re aware of the current interest rates and whether you’ll be be on the hook for private mortgage insurance. You’re feeling pretty knowledgeable about what will be expected of you financially. Nevertheless, you’d like to know if there are any other costs or obligations on your part. And, naturally, you want to be sure you’re making the best possible decision. That’s where a loan estimate comes in handy.

Within three days of applying for a mortgage, you’ll receive a loan estimate from the prospective lender — this replaces the good faith estimate that was previously used. A loan estimate will give you a clear idea of the interest rate, monthly payment, and closing costs of the loan. Estimates for any property taxes and home insurance you’re responsible for will also be stated. In addition, you’ll see if your mortgage has any special conditions that might positively or negatively affect the loan down the road.

While different lenders may offer you different mortgages and terms, even on the same home – for example, one might lump the closing costs and fees into the loan, so you’re paying for them over 30 years instead of upfront (but, be assured, you’re still paying for them) – the loan estimate is a standard form that all lenders use. That means you can use it to make an apples-to-apples comparison of mortgage offers from multiple lenders. Compare things like closing costs, fees, and the total interest paid over the life of the loan, and decide which mortgage is the best option for you.

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Some Thoughts on Hating Your Job and What You Can Do About It

With the exception of about two years of my adult life (split into two periods), I have never actually hated my job. I’ve usually been relatively happy about going into work. I’ve enjoyed the tasks I’ve had to work on and the people I’ve had to work with.

Those two periods where I hated my job, though? They were horrible.

During the first period, which lasted about six to eight months, I was in a small office with two other people. My boss actually worked in another building and was very hands-off. The three of us in this office were tasked with a standalone project that we were basically expected to pull off on our own. It was up to us to sink or swim, and it was a pretty challenging project.

One of my coworkers was an awesome person, someone I valued greatly and am still friends with more than a decade later. The other person was one of the most poisonous people I’ve ever interacted with. This poisonous person would claim to be working on specific tasks or sub-projects and produce nothing. This person would skip meetings and, on the occasions when this person would show up, would be acidly negative about everything and offer no positive ideas. This person would claim that we were “sabotaging” this person’s work, including such things as changing this person’s laptop password when this person wasn’t even in the office. There were negative comments, extremely critical emails to the boss (sometimes blind carbon copied to us, sometimes not), and almost-daily secret phone calls and meetings about how evil we both were.

This was all happening while the other guy and I were trying to build a successful prototype to solve a pretty difficult and multi-faceted problem in six months. The work itself was stressful, even without this third person. It reached a point where I didn’t want to go into work at times.

Eventually, that person was fired, primarily on the back of a presentation at the six month mark where that person literally knew nothing at all about the prototype.

During the second period, I was charged with essentially maintaining a large software project. It was one of those government jobs where you could just sit there and earn a paycheck if you were just quiet and willing to do very little. Most of my tasks involved paperwork shuffling. I liked the people I worked with quite well, but the truth was that the entire eighteen month (or so) period where I was doing this work was utterly soul-sucking. Every single day, I wanted to do anything other than go into work. I was basically restricted from actually even trying to do anything interesting – my work was pure maintenance, nothing else, and nothing else was welcome. I did maintenance and paperwork and twiddled my thumbs and hated my life. The sole bright spot of those days was that I liked my coworkers.

After a year and a half, I walked away from that job. I couldn’t take it any more. I am simply not psychologically built to sit there and just collect a paycheck. If I am not working on something or building something or creating something, I get very frustrated and negative.

This brings us back to the key question of what exactly do you do if you hate your job but you’re not in a financial position to just quit. It’s a tough spot to be in, but it’s a spot that a lot of people eventually find themselves in at some point or another in their career.

Some people can just stick with it. They can go in every day, deaden themselves, collect a paycheck, and go home. Other people force themselves to go to work each day. They hate the job, they hate themselves, but they feel forced to do it because they need the paycheck.

In either case, having a job that destroys your soul does not have to be the way life is. There are other options.

First of all, you can get off the financial tightrope. People often stay in jobs like this because they’re spending every dollar that they bring in. Often, much of that money is needed to pay actual bills – mortgage payments, car payments, credit card payments, huge cell phone bills, internet bills, energy bills, and so on and so forth.

People find themselves walking that financial tightrope because of a long history of personal spending choices and thus one of the most effective ways to get off of that tightrope is to change those choices. Cut back on your spending. Don’t trade in that car every three years. Downsize your home or rent out part of it. Eat out less and eat at home more. Have more modest vacations. Actually use a shopping list at the grocery store. All of those things will cut your spending by the hundreds of dollars a year.

Then, take that money and eliminate debt. Wipe out your credit card debts and your student loans and your car loans and, eventually, your mortgage. Build an emergency fund, too, so that when things go sideways, you have cold, hard cash to handle it. When your bills go down, don’t spend that money; instead, channel that extra money into even faster debt payoffs and into retirement savings or into savings for a small business. You’ll pretty quickly find that you don’t actually need that full paycheck as bad as you think you do.

Another strategy is to start a side gig that can earn money. What are you good at? Can you sell that skill on the side, or sell the things you produce with that skill? Can you at least talk about that thing with passion and insight and turn that into some income via a podcast or a Youtube video channel? There are lots of ways to start side businesses, whether it’s selling your art on Etsy or broadcasting your thoughts on a topic on Youtube or fixing computers in your community or countless other things.

This achieves the same effect as cutting back on spending. You can use this extra money to start trimming your bills so that you have fewer required expenses going forward. You can also use both strategies in parallel – improving your income while cutting your spending.

Another alternative version of starting a side gig is to simply get some education that will help you move into a better job in your current career. It might be that you love your current career in general, but you just hate your current position. In that case, more education often becomes the ticket for getting up and out of your situation.

Of course, neither one of these strategies is going to directly help with a situation in which you truly hate your job. They’re just going to help create some financial breathing room, but it is that very financial breathing room that is going to make all of the difference.

Once you have a little bit of financial breathing room, you can start searching for a different job with a much lower level of risk to your current job. You can afford to take a job that pays a little less for a huge increase in the quality of life. You can afford to be on shaky ground in your current workplace if they catch wind of your job search. You might even be able to afford the risk of jumping onto one of your side gigs as your full time employment, which is exactly what I did when I walked away from my second miserable job experience.

Sure, this is a long term plan, but the thing to remember is that it is a plan, and having a plan means that there is light at the end of the tunnel. Without a plan, a soul-killing job looks like it will keep cycling forever and ever without any hope. It can feel bleak.

Add a plan to that picture and you can begin to see that change is on the horizon. Rather than looking like a black hole of pain, your job can instead begin to look like a tool. It’s merely a tool that you use to convert your hours into money so that you can start moving toward a job that you actually want or a career shift you actually care about.

In the end, that’s the truth about a job that you hate: it’s just a way to convert your hours into dollars until you can find a more fulfilling opportunity in life. If you have a plan that gets you off of the financial tightrope, then you open the door to lots of fulfilling opportunities.

Good luck!

The post Some Thoughts on Hating Your Job and What You Can Do About It appeared first on The Simple Dollar.

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Can You Buy a Car with a Credit Card?

When you’re in the market for a new or used car, it’s smart to shop around. Beyond searching for the best price on the right car for your needs, however, you should also shop around for financing. Unless you have enough cash saved up to pay for your new ride, you’ll need an auto loan or personal loan to finance the purchase. And if you’re feeling adventurous, or are having trouble qualifying for such loans, you may even weigh the pros and cons of charging the car on your credit card.

Can You Buy a Car with a Credit Card?

But, is that really an option? And if so, is it a good one?

First thing first: Before you can charge your car to a credit card, you have to find out if your dealership even offers that option. Most of the time, they won’t let you charge the entire purchase price of your car – instead, they’ll allow you to put up to $5,000 of the purchase on a credit card. Second, you need to make sure your credit card limit is high enough to cover the amount you want to charge.

So, let’s say you still think it’s a good idea, are buying a $10,000 car, and have the ability to charge up to $5,000. To cover the rest of your car’s purchase price, you’ll need to come up with the cash or apply for a loan. If you’re buying a cheaper used car, on the other hand, you may be able to charge the entire purchase price.

Like anything else, just because you can do something doesn’t mean you should. Here are some instances where paying for a car with a credit card makes sense – and when it doesn’t.

Paying for a car with a credit card makes sense if…

You’re using a card with 0% interest on purchases.

With a 0% interest credit card, you could secure zero interest on your purchase for anywhere from 12 to 21 months. If you charge $5,000 on a card that falls into this category, you could feasibly pay that portion of your car loan down during that time without paying a dime in interest charges.

Before you go this route, however, you should make sure you can afford to pay off your car fairly quickly. If you don’t pay off your charged balance during your card’s 0% APR promotional period, you’ll wind up paying credit card interest when your card’s rate resets — which is going to far higher than the rate you’d receive on a good car loan.

You want rewards and have the cash to pay it off.

Let’s say you’re buying a car that’s relatively cheap to begin with and you have the cash on hand. By paying for an inexpensive car with a rewards credit card and paying off the balance right away, you could earn valuable rewards without much effort on your part. Since most rewards credit cards offer kickbacks worth between 1% and 5% of a purchase, you could benefit handsomely with this one small move.

Your credit is good.

With good credit, you can qualify for a credit card that may make charging your car purchase worthwhile. As mentioned above, zero-interest credit cards offer an excellent opportunity to avoid paying interest on at least part of your purchase. If you’re in it for the rewards, on the other hand, the best travel and rewards credit cards are usually only available to individuals with a FICO score of 720 or higher.

So, if you don’t have an awesome 0% APR or rewards credit card already, don’t despair. With a little research, you can apply for a great credit card before you walk into a dealership.

What’s more, some of these cards offer huge sign-up bonuses worth hundreds of dollars to new cardholders who meet certain spending criteria — for example, making $3,000 in purchases on a new credit card within the first 90 days. Charging part of your car purchase is a surefire way to meet those requirements in one fell swoop – as long as you can pay it off.

You should avoid using credit for a car purchase if…

Your credit card charges a high interest rate.

If your credit card charges a high interest rate, you should consider dealership or bank financing instead of using your card. Many car dealerships offer special promotions that make financing downright cheap, and you may be able to qualify for a better deal with your bank. According to an ongoing study from Bankrate.com, the average interest rate on credit cards is over 16% as of September 2016. Surely your bank or dealership could do better than that.

You want to pay off your car slowly if possible.

If you’re hoping to pay off your car at a leisurely place, a credit card probably isn’t ideal. Since the average interest rate is well into the double digits, you’ll pay a ton more interest over time if it takes you a while to pay it off. Most zero-interest credit cards offer 0% APR for 12 to 21 months, so these introductory offers aren’t long enough to help if you need four or five years to pay off your car.

You don’t have good credit.

If you have bad credit, you should proceed with caution no matter what type of financing you choose. With bad credit, you may not qualify for the best rates with a credit card, traditional bank, or even dealership financing.

The best thing you can do is shop around for the best rate you can find and save up the largest down payment you can muster. The larger the cash deposit you can come up with, the less you’ll need to borrow and less risk you’ll present to a lender. In the meantime, you can figure out ways to start boosting your credit score over time.

Final Thoughts

Buying a car with a credit card might seem like a good idea, but it’s not the ultimate solution you might think. Sure, you might earn rewards or even a lucrative signup bonus, but the additional interest you’ll pay if you’re not careful could easily wipe out those benefits and then some.

As always, you should explore all of your options, weigh the pros and cons, and think long and hard before you take out a loan or charge any large purchase on a credit card.

Buying a new or used car is definitely exciting, but the financial consequences can last for years. Before you jump in, you should arm yourself with as much information as you can.

Related Articles

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Tuesday, October 11, 2016

Money Boosts from Unexpected Places: Ten Areas of Personal Growth That Link Well with Personal Finance Success

For many people, “personal finance” becomes a separate and distinct area in their lives, completely blocked off from how they choose to spend their time and energy. It becomes little more than a register of dollars and cents and an overarching rule that you just need to watch out when you spend money.

The truth is that financial success comes not just from how you spend your money, but also how you spend your time and energy. The most obvious example of this is in your employment, which is where your money comes from, but it also comes down to how you use those hours at work as well as how you use your free time.

In short, are you using your free time to improve yourself?

Personal growth and improvement simply boils down to using your time and energy smartly to improve the quality and quantity of time remaining in your life. When you do that, you naturally increase your ability to earn a stronger income (by becoming someone who is a more effective worker) as well as improving the quality of your personal time as well (by improving some aspect of your life upon which your personal time rests).

Here are ten areas of personal growth that you can incorporate into your own life, along with clear explanations of how they can improve your finances.

Physical Fitness

Spending some time each day to ensure that your body is in tip-top shape (or at least in a little better shape than it was the day before) is actually pretty easy. It doesn’t have to involve hours at the gym. It doesn’t have to involve feeling miserable when you get home and feeling incredibly sore the next morning.

You can take a giant step just by walking a little more. Make a conscious choice to move around a little bit and do a few exercises. Make a conscious choice to go on a walk after dinner, or to park on the far end of the parking lot at work so you have to walk a little more to get into your workplace.

Every step you take, whether it’s just walking around the block and touching your toes ten times or doing 100 squats and doing a big bench press, is going to be a step that improves your health.

How does this help my finances? The healthier you are, the lower your health care costs are going to be. The healthier you are, the more energy you’re going to have to tackle all of the challenges in your life, which means you can ramp up your productivity at work or take on another big project like working toward a masters degree or finally starting that side gig you’ve been thinking about.

Confidence Building

Having confidence in yourself gives you the ability to do things like speak up at meetings, volunteer to do a presentation, or take on other workplace challenges that will make you stand out and bolster your resume. The lower your self-confidence, the less likely you are to raise your hand in those moments of opportunity and instead they just slide by, never to return.

Again, self confidence isn’t that hard to build. It mostly just requires taking a lot of little actions to improve your self image over time.

There are many, many actions you can take to build your self-confidence. Groom yourself. Dress nicely. Intentionally think positive thoughts about yourself. Visualize future conversations and give those visualizations positive outcomes. Squash negative thoughts when they pop up. Intentionally be kind and generous. Prepare in advance for meetings. Set small goals and achieve them, like walking 5,000 steps today. When you start taking those actions, your internal confidence meter slowly starts to rise.

How does this help my finances? The more confident you are in yourself, the more likely you are to step up to a challenge at work, and it is through willingness to step up to challenges and succeed at them that people build stronger resumes, get raises, and get promotions. The more cash you have flowing into your life, the better. Improved confidence also helps with building personal and professional relationships, the value of which we’ll discuss a bit more later on.

Learning a New Language

Learning a new language opens up a door of communication that wasn’t open to you earlier. A person with the ability to speak a second (or third or fourth) language now has the capacity to communicate easily with more people than ever before.

This makes travel easier. It makes many workplace situations easier. It makes reaching out to others easier. It makes understanding others easier. The simple ability to speak to someone in a common language or in their native language helps build relationships and makes the exchange of ideas so much simpler.

Not only that, learning a new language has been repeatedly shown to help in other cognitive areas. There are few things you can do with your mind that are more powerful than the thinking that goes into learning a new language.

My favorite method for easily learning a new language is to simply download the Duolingo app to your phone. Duolingo is completely free and turns language learning into a pretty fun game with a ton of levels that tracks your language learning progress quite well.

How does this help my finances? To put it simply, if you learn a new language, you drastically improve your employment prospects. Someone who can speak Spanish or Chinese or Japanese or French is suddenly eligible for quite a few high-paying jobs that they weren’t previously eligible for. Beyond that, there are the secondary benefits – opportunities for communication with people that you didn’t have before which can open up all kinds of social and professional benefits, for one, and the added cognitive benefits that come from building your brain as you learn a new language.

Social Network Building

Putting in the work to build up your ability to connect with people, build new relationships, and maintain them in both the personal and professional spheres is challenging, especially for introverted people like myself, but it can be incredibly rewarding.

Simply having lots of relationships and friendships makes your social life vastly richer, for starters. You always have conversational partners, people to bounce ideas off of, and people with which to hang out with.

If you’re an introvert like me and find that working on social communication and network building is really hard, I highly recommend two books. First, How to Win Friends and Influence People by Dale Carnegie (see my detailed review of this book) is kind of a step-by-step how-to book on being social for introverts. Second, Never Eat Alone by Keith Ferrazzi and Tahl Raz (see my extremely detailed review of this book) is an amazing book on how to build personal routines that make keeping relationships, building relationships, and utilizing relationships pretty easy, particularly for introverts.

How does this help my finances? The greater the number and the richer your personal and professional relationships are, the more likely you are to be given opportunities and have connections in place that will help you get promotions and to rebound when you’re down on your luck. They’ll also enrich your social life and make it easier to not simply spend money as a way to “grease the skids” for social interaction – things like dinner parties and other low-cost social events will seem much easier and much more enjoyable.

Time Management

Being smart about how you use your time, particularly in terms of cutting out the little spots of “wasted time” throughout your day so that you can turn them into a big block of useful time later on, is incredibly valuable for all aspects of your life. It gives you more time to take on challenges at work, more time to enjoy the things you truly want to enjoy at home, and leaves you feeling much less stressed about the things on your life’s plate.

For me, the best benefit of smart time management is that I don’t have to think or worry about what I have to do next. I can just focus on the task at hand. My time management system has all of the things I need to do remembered for me.

I highly recommend that you take a look at David Allen’s book Getting Things Done (here’s my very detailed review of it) for a great foundation in time management and a pretty good system for keeping track of all of the stuff you need to do (and want to do). I personally use several tools for time management – Google Calendar for all of my events, OmniFocus for task management (though Todoist is a great free alternative), and Evernote and a trusty pocket notebook for jotting down thoughts and ideas on the fly (to later process into those other places).

How does this help my finances? The more efficient you are with your time, the easier it becomes to find time for other areas of self improvement that this article discusses and then reap the rewards of their benefits. Plus, being more efficient with one’s time makes it easier to take on new challenges at work, which can open the door to raises and promotions.

Better Eating Habits

Better eating habits really just boil down to making better choices about each food item and beverage that you put into your body. The healthier the fuel you put into your body, the better your system will run.

It’s really easy. Just choose to put one less scoop of the unhealthy stuff on your dinner plate tonight, and maybe one more scoop of vegetables instead. Pass on a donut when they’re available at work. Pack a sandwich to take with you instead of hitting a drive-thru. Make a healthy meal you like, then make extra batches at the same time and freeze them so they’re easy to pull out.

Eating better doesn’t mean sacrificing all of the foods you like to eat. It just means spreading them out a little more and not gorging on them.

How does this help my finances? The better you eat, the more likely it is that your weight will stay under control and the lower the likelihood you have for things like diabetes and heart disease and high blood pressure. Those ailments are incredibly expensive to treat and are life threatening. Beyond that, having a better diet can bolster your personal energy levels, making it easier to perform better in work and in everyday life, which can improve your workplace standing and open the door to raises and other financial benefits.

Non-Destructive Candor

Learning how to have meaningful discussions with people that don’t devolve into negativity and criticism is a powerful skill, indeed. Knowing how to provide a good mix of positive and negative feedback not only helps out the other person, it can boost their confidence and make them perform better and they’re going to want to return the favor.

Mostly, this skill is about focusing on finding truly positive things to say in almost every situation paired up with making sure that you buttress negative comments with positive language and other positive elements.

There are a lot of ways of doing that. I personally like finding at least two very positive things I can say about anyone’s performance and both starting and ending with that. If there are things to criticize, I don’t just blurt them out – I think of a way to state them that isn’t an attack. I also try to clearly identify ways to improve those things, and I usually offer to help with those improvements in a way that doesn’t involve me simply taking on the task myself (“I’ll happily look at it when you’ve made those changes!”). I’ve never had this practice go poorly.

How does this help my finances? It is a great way to build stronger relationships with people by simultaneously making them feel good and helping them find real ways to improve their outcomes. It also opens them up to providing you with the same kind of feedback, which can do nothing but improve your own outcomes in life. It can improve your presentations, your work performance, and your opportunity for promotions and raises.

Self-Directed Learning

The value of self-directed learning doesn’t just come from the subjects that you learn about, though that in itself is valuable. If you spend some of your spare time learning about a topic that’s relevant to your career, like a programming language or new teaching paradigms or anything else, the knowledge itself can be incredibly value.

Instead, a big part of the value of self-directed learning on a regular basis is that you simply have the skill to teach yourself about almost any topic you might want to or need to learn about. If you know how to teach yourself things, then when a new challenge comes up in the workplace, you’re ready for it. You can quickly learn what you need to learn to turn it into a success.

Self-directed learning achieves both of these objectives. There are many, many ways to dig into self-directed learning, from taking classes at Coursera to digging into programming at Code Academy or reading books at the library. Self-directed learning opportunities are everywhere.

How does this help my finances? If you’re a lifelong learner and constantly work to learn new things, you’re going to not only have a large knowledge base, but you’re also going to have the skills you need to gain new knowledge quickly to face challenges at work. That’s going to do nothing but help you in a competitive knowledge-based workplace, no matter what it is that you do. It will put you in line for raises, promotions, and new career paths.

Focused Meditation

This is literally the most valuable thing I’ve discovered in the past five years. I’m not kidding in the least.

If you’re anything like me, your mind is racing at a hundred miles an hour most of the time. It can be very hard to slow it down and focus on something with any depth. I can focus really well for brief periods, but I know from experience that the most valuable and worthwhile things I do in my life is when I’m so lost in focus that time passes without notice and I produce exceptional work. I call it the “flow state,” and that state is magical.

However, if your mind is racing along from topic to topic all of the time, it is really hard sometimes to get into that flow state. It’s hard to focus on anything. It also makes you feel rather anxious at times.

The solution I’ve found to this is focused meditation, and it’s like some kind of magic balm for this. It has helped me to be able to focus on professional and personal tasks like nothing else. It’s helped reduced my general sense of anxiety and worry. I’ve found it much easier to drop into “flow states” than ever before.

It’s really easy to do. All you have to do is just find a comfortable spot, close your eyes, and focus on nothing but your breathing for five minutes. If your mind ever wanders – and it will wander – just notice that you’re wandering, drop that train of thought, and bring the focus back to your breathing. That’s it. It’s like doing bench press reps for your mind’s “focusing muscle.” It’s absolutely amazing, especially when you do it over time.

(There are more practices than just this one, but if you do this a couple times a day for a few weeks, you’re going to want to dig in deep on your own, and I’ll leave that wonderful journey to you.)

How does this help my finances? The better your ability to focus and manage your personal stress and anxiety, the better you’re going to be at performing your job tasks and taking on new challenges. You’re simply going to perform better at work, and better work performance leads to better pay, better jobs, and better opportunities.

Presentation Skills

The ability to collect together a set of ideas and turn them into something that will inform and inspire people without drowning them in information over their head is an incredible skill for anyone to have. In many workplaces, this is a skill that you can tap daily.

The thing is, most modern workplaces rely on the exchange of information between people, and part of that involves people presenting information as effectively as possible to others, both by standing up in front of a room and presenting it as well as by sending out documentation. In both cases, the goal of the person presenting is to take a set of ideas or a bunch of pieces of information, organize them sensibly, and then sharing that organized set of ideas in a way so that most of the people in the room are able to follow and be engaged with the ideas and information while learning something. If you can do that, you’re going to do well no matter what your career path is.

There are many books on presenting, but two really stand out to me as being very worthwhile. The first is Scott Berkun’s Confessions of a Public Speaker, which focuses on the nuance of actually standing up in front of a room and verbally sharing your ideas. The other is Presentation Zen by Garr Reynolds, which focuses more on taking sets of ideas and organizing them for presenting to others, both in terms of creating sensible order but also finding ways to minimize the rough edges and details while preserving the core of the information you want to share.

How does this help my finances? Knowing how to present ideas and information well, whether in written form or in spoken form, is going to help you show off the work that you’ve done and also become a “face” for the work your team has done. Both of those things put you out in front of people that often have the power to push your career in a very positive direction. I speak from experience here – my first real opportunity for presentation came at a key point in my career and it was that presentation as much as the work I had done that secured long-term employment for me.

Final Thoughts

Whenever you work to improve yourself, almost no matter what that area of improvement is, you end up providing substantial benefits to your future financial health. You often end up trimming the costs of your life going forward, but more often than that, you open the door to improving your professional standing and earning potential.

Make room for self improvement and personal growth in your life and you’ll be glad you did, not just because of the improvement you see in yourself, but because of the opportunities that are opened up for you in life.

Good luck!

The post Money Boosts from Unexpected Places: Ten Areas of Personal Growth That Link Well with Personal Finance Success appeared first on The Simple Dollar.

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