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Financial News and Information

The difficulty of financial logic (part one of two)

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As most of you know it’s sometimes very difficult to make the best financial choices all the time, even when the logical side of our brain tells you its wrong, we still often make the wrong choice. It’s obvious this is the case; otherwise American wouldn’t be in the debt crisis we are currently facing. Millions of Americans wouldn’t have lost their home to foreclosure or be facing foreclose in the near future. With this article I however want to take this topic down to a simpler thought. I want to talk about why we make small dumb financial choices each day that may not have a major impact on our lives, but do affect our finances.

I want to start with an everyday example. There is a convenient store / gas station chain located in the Midwest and Southern parts of the United States called Speedway. Many of the Speedways that I know today were once Super America stores but this is just side information. The point is they have a rewards program. For all your in store and fuel purchases you are awarded points. These points can be redeemed for merchandise, gift cards to Speedway or gift cards to other partner stores. Sounds like a great deal, right? Wrong!

First, the term convenient store means you are going to pay a lot more for any item you buy there because it’s convenient. You won’t have to wait in a long grocery store line to checkout and you can get your can of soda already chilled and ready to drink, but it will cost you, sometimes as much as 500%! For example, just the past week soda was on sale for $2.50 for a 12 pack. I admit this isn’t typical, but you can sometimes find these deals. A convenient store may charge as much as $1.00 for a can of pre-chilled soda. $0.21 for a grocery store soda versus $1.00 for a convenient store soda is about a 500% markup.

How can you solve this problem of convenient store robbery? The answer is pretty simple and you have a couple obvious options. First, don’t drink soda; it’s not good for you anyway. Second, pack a small cooler to take in the car when you leave the house. Fill it with cold soda and even snacks. If you plan to be on the road for a while it’s a great break from driving to stop and grab a snack.

Remember I said this was a two part post, stay tuned for part two very soon.

Lower your clothing budget by over 85%

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Want to know how to buy your family’s clothes for next to nothing? Stick with me throughout this article and I will teach you how to save up to 95% off your clothing budget. As many of you super savers already know there are a few techniques you can use to get great discounts on clothing, but if you learn how to combine these techniques you will be amazed at how much money you can save! I’m going to start off explaining a few savings methods you may already know and the wrap it up with the techniques to use in order to maximize savings.

For the most part America is a “living in the present” society. The majority of us do not plan ahead, and financial statistics will prove that a small percentage of us even have a savings account with a balance of $1,000. That’s why my first technique may be obvious however; difficult to implement. Clothing stores often mark down their clothing as much as 85% toward the end of a season. Most of us will wear the same size clothing one year later so why not take advantage of the sales? Store the clothes away in a storage tote and break out your new, extremely discounted clothing the following year. Sure, it may be a season old, but I would be willing to bet that the majority of us wear clothes for longer than one year anyway. My wife often buys new, brand name clothing for our children for $2 and $3 per piece using this technique.

 Second, use those coupons! Almost every clothing store will issue some type of coupon in the local paper or on the internet. These coupons may only be for 10% – 15% discount but if you were going to buy the item anyway, why not save a few dollars. When using coupons always read the fine print, often coupons exclude certain items including items that are on sale or on clearance. If you get to the checkout counter and they won’t accept your coupon don’t be afraid to walk away. In order to avoid a voided transaction the cashier may honor the coupon anyway.

 Take advantage of discounted gift cards. Gift card resale is becoming a very popular trend and many websites and businesses are completely designed around the resale of gift cards. They offer to purchase gift cards that you won’t use for less than face value and in turn resale these gift cards to someone who will use them for a small profit. For example, you may receive a $50 gift card for Dicks Sporting Goods as a Christmas gift. You know you will never use it so you decide to sale the gift card for $40 to a gift card resale business. The resale businesses will in turn sales your card to someone else for $45. You get $40 for your gift card that you would never use and someone else saves 10% from purchasing your gift card, everyone wins!

 Now that you have read the saving techniques you may already know where I’m going with this, but if not let me explain. Simply combine two or three of the techniques for extreme savings. Let me give you an example to further explain. I start my search on a gift card resale website. I purchase a $50 Kohls gift card for $45. My wife loves to shop at Kohls because their off season clothing prices are great and usually you can use a coupon even on clearance items. Let’s assume it’s the end of summer and their discount is 85%. I buy $350 worth of clothes and after the 85% discount my total is $52.50. I use a coupon that is 15% off your total purchase that brings my total to $44.63. Sales tax adds another $2.68 for a grand total of $47.31. I use my $50 gift card to pay the balance and get back $2.69. My total percentage saved after all discounts is is almost 88% and that’s not including the discount on the gift card, not bad. I just bought $350 worth of clothes for $47.31.

What happened to the barter system?

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The barter system was used for centuries before the invention of money. It was a great way for people to exchange goods and services for other goods and services. The local Tailor may trade a nice pair of pants for a weeks worth of milk from the dairy farmer. It didn’t really cost either person anything except their time and skills.

A few weeks ago a lady at work overheard me talking about needing a babysitter. She jokingly told me she would babysit for me anytime I wanted to come over to her house and cut her grass. I never really thought any more about it until a couple of days ago. Why wouldn’t I take her up on this barter for services?

We usually pay our babysitters $25 or so for a couple of hours of service. That’s a pretty big amount per hour for a babysitter, but we feel it’s not worth the hassle of someone coming to our house for less money than that. This can make a date cost upwards of $80 for dinner and a movie. Why wouldn’t I barter for free babysitting?

The lady from my work hates yardwork and tending to her lawn. She would much rather watch our kids for a couple of hours than cut the grass. I actually don’t mind yard work and I could always find an extra hour or so to tend her yard if it meant free babysitting.

Think of some ways you can use your skills to save some money. With the recent recession I think it’s possible you will start seeing more of the barter system being used. An ancient system may be making a comeback!

A great deal at the consignment store

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Today my wife got a phone call from a friend who just visited the local children’s consignment store. She informed her that they were having an end of summer clearance sale on all their summer clothes. Since we have two small girls my wife decided it would be a good idea to at least go take a look and try to scout out some leftover deals.

The consignment store was offering a deal where you could stuff a bag full of clothes and only pay $15. I thought it would be a pretty good deal if the bag was a decent size. I’m all about saving money so I gladly watched the children while she went to scope things out.

About an hour and 20 minutes later she returned with her bag full of clothes. I was pleasantly surprised to find out that the bag was a decent sized bag. She actually crammed exactly 40 articles of clothing into the bag. All of the clothing was name brand clothing and looked new. So she bought the clothes for about $0.38 each. The best part is that everything she bought was something she would have probably purchased anyway. Sure it’s mostly for next summer but you just can’t beat a sale like this!

If you really want to save some money in the clothing budget check out consignment stores. Most of them only buy back clothing that looks new so there is still plenty of wear left in the clothes. Most of the clothes are also top name brand clothes, so you can be stylish and still save a lot of cash!

Free entertainment, take a walk

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Bored and don’t have a lot of extra cash for entertainment? There are many free or very cheap entertainment options to keep away the boredom blues. One of the most overlooked form of entertainment is walking.

Come home from a hard day at work, eat a good dinner and head out into the neighborhood for a walk. It’s a great, free form of entertainment and also can provide many other benefits.

Walking is a great form of exercise. It’s very low impact so you won’t bang and strain your muscles and joints, but you will still burn some calories. The average person can easily walk a mile in 30 minutes. You’ll burn about 100 calories over that 3o minute period or 36,500 calories per year. That’s enough exercise to lose just over 10 pounds in a year without going on a diet!

Walking also helps to relieve stress. Take a look around and enjoy your surroundings. Forget about your boss at work or the pile of paperwork sitting on your office desk. Take 30 minutes to enjoy your life and relieve some stress.

Finally, if you are up for a little more challenge take a hike! Walking through the wilderness will slightly increase your intensity level burning more calories and also adding much more scenery to your walk.

Forget about spending $50on taking the family to a movie. Grab a few water bottles and head put on your tennis shoes. Take a walk around the neighborhood, enjoy the scenery and conversation and save a lot of cash!