Monday, July 30, 2012

My Rules for Safe Saving

People often spurn low-risk savings in favor of the possibility of the higher returns that come with riskier investment options. Personally, I would have thought that many of these people would have learned their lessons over the last few years of the financial crisis and real estate market debacle.

I for one have never been a big fan of risky investments, preferring to stick instead to low-risk savings in which my money is safer and more secure. While the rewards might be a bit less in the short-term, over the long-run there are still plenty of rewards to be had if I stick to the following rules.

Don’t be Swayed by the Crowd
It can be easy when looking for places to put your hard-earned money, to be swayed by public opinion, and even the opinion of friends and family. A hot tip about an unknown stock from a co-worker. A home in foreclosure that’s too good to pass up. A new equity fund that just came on the market that everyone’s talking about.

Whatever it is, people often have a way of skewing certain investments to sound like they are a “can’t miss opportunity,” but this doesn’t necessarily mean that they are. We only have to look at the housing market collapse and financial crisis to see how seemingly “invincible,” yet still risky investments like real estate and companies “too big to fail” managed to crumble quickly.

Diversifying is Critical
Even when saving your money, diversification can be crucial. Diversifying can help get the most out of low-risk savings opportunities. Doing things like laddering certificates of deposit can help to spread money over a variety of return levels over time. And just because a savings option is low-risk, still doesn’t mean there isn’t some risk involved. Putting all your eggs in one basket -- even a steel reinforced basket -- can still burn you if that basket is somehow stolen or destroyed.

Be Happy with Lower Returns
It’s not always the higher-risk investment that burns an investor but the greed and short-sited view of the future that pushes him or her to make that investment in the first place. Personally, I’m fine with low returns. Over time, the steady low return on savings can be just as valuable -- if not more so -- than the fluctuating higher risk returns. I find that my ability to remain greed-free and satisfy myself with lower, albeit less exciting savings returns, tends to make my saving style safer and makes me feel more at ease.

Look for Control, Rather than High Returns
Low risk saving options typically offer more control. I like to have control over my money since no one is going to care about that money more than the one who actually earned it…me.

With control over my savings, I can move it where it needs to be to make me a safe, yet stable return; but at the same time, I can get to that money if I need it. Things like government savings bonds, certificates of deposit, and high-interest savings accounts might not look like much on paper, and may issue a penalty if dipped into sooner than their maturity date, but if I need the money for a purchase, emergency or investment, I can get to it rather easily.

Patience is a Virtue
Love it and leave it. That’s my motto when it comes to my savings. If I care about my money, I want it to be safe. And like a growing child, savings need time to mature and grow into their full potential. Therefore, I tend to put my money in secure, interest-earning savings accounts and investments where it can sit safely and grow for me with my having to do and worry very little.


The author is not a licensed financial professional. This article is for informational purposes only and does not constitute legal or financial advice. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.

Wednesday, July 25, 2012

Making a Garage Sale Easier in Just 5 Simple Steps

In some ways, preparing for a garage sale can be a major pain in the neck. I like to do my garage sales right, so there can be plenty of work involved. However, having a garage sale can also come as a relief. Not only can the extra cash that accompanies my efforts be a nice little perk, but there’s relief in the fact that we’re downsizing and getting rid of a bunch of stuff that we just really don’t need.

In order to make the most of our garage sales, we prepare in several ways. Here is a step-by-step version of how this process typically takes place in our household.

Step #1 – Start Well in Advance
If we really want to make a garage sale worthwhile, we tend to start our prep work fairly early. By decluttering and downsizing as many areas of our home as we can ahead of time, we can increase the number of items we have available for our sale. I tend to keep all these items in a central holding area where they don’t get re-sorted into the mix of household belongings. Then when the time comes, I can get them all priced and sorted onto tables by category (i.e. clothing, kitchenware, tools, outdoor supplies, etc.).

Step #2 – Choose a Time Wisely
The time selected for a garage sale can make or break our success. We usually shoot for late spring, summer or early fall. And of course predicting the weather can be tough. Checking the 10-day forecast ahead of time usually helps us get a feel for what the days we’re considering will be looking like weather-wise.

Step #3 – Don’t Waste Time
In our area, the big times for good garage sale crowds are usually between the hours of 7 a.m. and 11 a.m. on Fridays and Saturdays. After those hours or on different days, and I’ve learned that it’s largely a waste of time having a garage sale unless we just want to sit outside and relax for a while. However, times and days of garage sale success can vary depending upon location and what is being sold.

Step #4 – Marketing Program
While I’m not one of those people who hangs signs on every street corner, I do my part to market our garage sale. From the little things like ensuring all our items are priced and that there are informational signs around our sale to help guide buyers, to bigger items like putting up signs on our street corner and advertising in the local paper, I find that marketing a garage sale can pay off in additional sales.

I try to make sure that I have our newspaper advertisement ready and in place a week in advance to make sure we don’t forget. This runs us about $35 for the smallest ad available -- a little pricey I know, but worth it to draw the extra business.

Step #5 – Be Ready Before They Are
I usually start preparing in force for our garage sales about a weekend or so in advance. This involves ensuring that there is room in the garage, that we have ample tables, that signs are made and ready to go, and that everything is priced. It rarely fails that someone shows up before the actual day of the sale in an effort to peruse the goods before anyone else. Not only this, but on the day of the sale itself, I’m up and ready to go usually a good two hours before the allowed start of the sale (7 a.m. by neighborhood rules), because I’ve yet to have a sale in which someone isn’t there early.

Monday, July 23, 2012

Financial Upsides to Online Publishing

Over four years ago, when I first entered the realm of freelance writing, much of the work I did was geared toward actual hardcopy document publishers. Being new to the writing and publishing industries, I had little experience with where or how to get my work out there and seen by others. Whether book, newspaper, or magazine, I was more interested in those hardcopy sorts of publishers than anything to do with the Internet.

I realized after a long year of mailing queries, articles, and manuscripts to a litany of agents and publishers though, that there were some distinct financial upsides to online publishing.

Time Savings
I can’t tell you how many hours I’ve spent (and largely wasted) crafting letters, stuffing envelopes, and mailing literally hundreds of letters to various publications. These are hours that I could have spent productively writing, finding new writing jobs and otherwise making money. While this isn’t to say that I still don’t have to perform similar duties with online publishing, the amount of time I spend doing so is significantly reduced.

Supply Costs
With all those mailings came increased costs. From the paper upon which to print the letters, articles and manuscripts, to the envelopes, stamps, shipping costs, printer cartridges, and similar supplies, my costs for such efforts ran into the hundreds of dollars each year. Suffice to say, my return on investment for such costs was minimal compared to what it is writing for various Internet publications and sending queries and documents by way of email rather than snail mail.

Motivation might seem a strange addition to the financial upsides of online publishing, but getting your name out there and having some items published can act to provide some motivation to stay at it.

The more I get published, the harder I work since my efforts are being recognized and pay off both monetarily and intrinsically. Just sending dozens of query letters to which I never receive a response can be a motivational killer and can quell the fire that ignites my passion to write. However, seeing something that I’ve crafted out there online for others to read makes my efforts more worthwhile.

Residual Income Possibilities
There is also of course the income side of online publishing. Many regular publishers will pay a flat fee for a piece of writing and that is that. However, with certain online work, I might be eligible for residual payments based upon the viewership of my work as well as advertising income.

Rights Retention
There is also the question of rights, and how the retention of the rights to my work in some cases can have long-lasting and significant financial repercussions. While not every online publisher to which I sell will allow me to retain the rights to my work, in some instances I do, and can therefore reap the rewards of that article in multiple ways and in multiple locations. I might publish it in one or two online venues in which I can reap residuals from it’s being viewed by others, then use it on my own personal finance blog or vice versa.

By retaining the rights to certain works, I can put it in multiple locations to keep it earning in each of those locations. And while the income stream might in some cases be small, over time and multiple sites, and with multiple articles, that income can add up nicely.

Tuesday, July 17, 2012

We Scored 100 Percent on these 10 Money Habits

I find it fun and interesting gauging my money saving habits and techniques against those of others. This mean that when I recently stumbled across an MSN Money article by way of MarketWatch entitled “Avoid your parents’ money mistakes” I enjoyed comparing our family’s financial progress and acumen to the items listed in the article.

In effect, the article was stating that by adhering to the following ten money habits, recent college grads might have a better chance at a successful financial future. Therefore, since my wife and I are already in our mid-30s, I wanted to see if we were on the right track and decided to put our family to the test when compared to the article’s 10 money habits.

“Create a budget”
I created a budget the year I graduated college and haven’t looked back since. It not only helps rein in our spending, but in the process, I can track expenses to help me gauge how and where we spend.

“Have a rainy-day fund”
Even before I’d completely paid off my student loans that first year after graduation, I had begun building my emergency fund. Gradually, this fund has grown over time so that our family now tries to keep a “rainy-day fund” of around $5,000 available to insure that we can cover a variety of possible emergency scenarios should they arise.

“Pay off your credit cards”
Neither my wife nor I have ever carried a balance on our credit cards over the years; therefore, paying off our credit cards has never been an issue.

“Pay your bills on time”
We’re on the “pay ‘em as you get ‘em” plan for all our bills. Whether they’re property taxes or cable and internet, it doesn’t matter what they are or when they come, we have always paid our bills on time. This helps us stay current, avoid late fees, and provides peace of mind.

“Don’t spend more than you make”
While on a monthly basis – with larger bills relating to property taxes or medical costs arriving – we might not always be able to make more than we spend, on a longer-term annual basis, we meet this money habit.
By adhering to our budget and tracking our expenses, we can gauge the differential between income and expenses quite easily when it comes to this aspect of our financial lives.

“Be careful with your mortgage"
Having downsized to a small condo, we were able to purchase the property in cash, thereby eliminating the need for a mortgage. This has taken our home-related costs from around $2,250 a month in our previous home, down to about $750 a month now.

“Start thinking about retirement now”
I started thinking about retirement as soon as I graduated college. Shortly after entering the working world, I realized that the sooner I could pay off debt and focus on the future, the better prepared that I – and eventually my spouse – would be for our golden years.

“Start saving for retirement now”
Being aware and knowledgeable of our retirement goals and timeframe allowed me, as well as my wife, to take advantage of employer sponsored retirement options such as 401(k), 403(b), and employee stock purchase plans. We found that this was a good thing to do early in our careers since later on things like buying a home, having children and making career and location changes would make it much more difficult to squeeze out the extra money for bolstering our retirement savings.

“Set your financial goals”
We’ve set numerous financial goals over the years. As we age, our situation changes or our family grows, these financial goals tend to change; however, they are always there providing a look ahead toward the future and giving us the motivation to keep forging ahead with our financial dreams.

“Learn about personal finance”
Well, considering that I read and write about personal finance on a regular basis, and even maintain a personal finance blog, I think we’re doing pretty well in this area. However, I also feel that it’s important to constantly be on the lookout for new information relating to personal finance so that we can continue the learning process and expand our knowledge in this ever-changing area.


Pelletier, John. MarketWatch. “Avoid you parents’ money mistakes.” July 6, 2012. July 10 2012.

Monday, July 16, 2012

Living Each Day Like It's My Last on the Job

Each morning when I wake up, the odds are that I’ll still have a job, especially now that I’m self-employed. This doesn’t mean that I have to take that job for granted though. In fact, living like each day could be my last day on the job, helps me better prepare myself for the unexpected and get (and keep) my financial affairs in better order. It might sound somewhat depressing, but living like each day is my last on the job actually makes my life feel a little bit better, especially when I end that day still gainfully employed.

Reduced Spending
If you thought that you were going to lose your job today, would you go out and start throwing money around frivolously? Would you buy that new flat screen television? Would you have that big dinner out? I hope not. I wouldn’t.

Knowing that my income could suddenly and severely be diminished and that such a situation could last for months, if not longer, means my attitude toward spending would change. And so, by acting like each day will be my last on the job, it alters my spending habits and makes me reconsider just how, where, and in what amounts, I’m spending my money.

Better Saving Habits
It’s not just my spending habits that are affected by training my thoughts upon the possibility of today being my last day on the job. By convincing myself that my income flow could be shut off -- or at least greatly diminished – it helps me stash more cash away in the event that I’m left high and dry when it comes to income flow. When that rainy day could be tomorrow, saving for it is much easier than if I think that rainy day might be nowhere in the foreseeable forecast.

Increased Awareness
Thinking that my last payday is imminent helps me keep better tabs on my personal financial situation. One of the common threads among advice for those who are going to lose or have recently lost their job regards doing a general accounting of personal finances.

Knowing what bills are outstanding, what my regular expenses are, what expenses could be cut and by how much, how much I have in reserve accounts and my emergency fund, and similar financial information can be pertinent to sustaining some sort of normal existence after a job loss. Thinking that each day could be the day that loss of employment arrives, heightens my awareness regarding my overall personal financial situation.

Heightened Productivity
Since, as a writer who is typically paid per piece, thinking that I might not have a job tomorrow pushes me to get more done and earn more today while my employment is secure. If I knew my job would be there tomorrow, I might push certain work off until later, but not knowing when I wake up the next day whether a huge portion of my income could be gone, is a great motivator for finishing today what could be put off until tomorrow.

More Appreciation
When I consider the possibility of a job coming to an abrupt end tomorrow, it creates more of an appreciation for the work I have today. It’s easy to take a job or steady work for granted. Knowing that it could all suddenly be gone though -- along with the income it provides -- makes me more appreciative and helps me push aside some of the minor annoyances that come with my work.

Thursday, July 12, 2012

Preparing to Publish My First e-book

The trend in becoming an author these days appears to be leaning increasingly toward online publishing. As a writer myself, I can certainly see why. Avoiding the hassle of trying to find an agent or publisher – a process that can be both costly and time consuming to writers – being able to publish what you want and when you want, and possibly being able to reap higher residual income due to not having to pay an agent or publishing house are quite attractive features to online publishing.

Publishing e-books can also be a great way to open up a few more passive income streams for those within an industry that already often finds income at a premium. And while I’m not saying that publishing my first e-book was easy – it still took plenty of work to read, re-read, re-write, and go through the preparation and uploading process to get it up on the internet and looking good – having it up and on the internet through Kindle Direct Publishing on has certainly been a rewarding experience, as well as a great learning process.

Familiarizing Myself with e-books
When I first started hearing more and more about e-book publishing, I decided it was time to take the trend seriously and learn more about it. I had read several newspaper and online articles regarding individuals, who like myself, had little success with agents and publishing houses, and had instead turned their attention to online publishing options with great success.

While I had no grandiose visions of becoming an instant millionaire by publishing an e-book or two, with several completed manuscripts just sitting around the house collecting dust, I figured it might at least be a way to get some of my work out there, while earning a few bucks in the process.

I therefore took some time to start finding out more about the online publishing process. I watched some instructional videos online, starting reading more articles by those who had been through the process, visited the Kindle Direct Publishing site, and began developing a path and timeline for rehashing some of my previous works and giving the online publishing route a shot.

Getting Ready
To be perfectly honest, I think that I could probably read my own work 100 times and change it every time.

Proofing, polishing, changing, re-reading, and adjusting can be an even lengthier process than actually writing an e-book in the first place. Once I’d gotten things reasonably squared away on this side of my work, I then had to develop the cover art and write the descriptive overview for the book (much like the inside jacket cover of a hardcopy book).

Starting the Process
Once I had everything pretty much set to go, the actual process of getting the book put on Kindle Direct was relatively easy…minus the formatting aspect.

See, I thought that since I didn’t use any pictures or graphics in my book, I wouldn’t have any formatting issues. Wrong!

I had paragraph indentation issues throughout my manuscript, a few spacing issues, and some other formatting glitches here that I had to work out. The indenting issues took the most time to work through, but with Kindle Direct’s preview screen, I could upload my manuscript, take a look at it, see if my changes were having the desired effect, and re-modify if necessary.

The final step in the uploading/formatting/previewing process was a final flip through of my complete manuscript – page by page – on the preview screen to ensure that it looked okay before finalizing the copy for the world to see.

Setting a Sales Price
I had mixed feelings about setting a sales price for my book. After the hundreds of hours I’d poured into the work, I personally felt it worthy of a reasonable price. However, being a no-name author who was looking for exposure and hoping to build readership with his first few works, I was realistic.

Pricing a personal project like this e-book can be a difficult balancing act. I had heard through the grapevine that setting a lower price would likely attract more sales, but in so doing, I would be cutting my residual price per book. I was initially thinking of $1.99 per copy, but that would only garner me about 70 cents profit per copy sold. Going a bit higher – at $2.99 – would bump that residual price up to about $2 per copy sold.

I felt that it was worth this risk to go for the $2.99 price, since I still thought it a pretty good deal (especially considering all the work that went into the project) for the reader, yet didn’t leave me earning just pennies per copy sold.

Tuesday, July 10, 2012

How We Resist Summer Spending Temptations

Here in the Midwest, our family finds it relatively easy to save money and work hard over the winter months. Snow, wind, rain, and cold weather tend to keep us indoors much of the time, and our urge to spend money is greatly reduced simply by that fact that we don’t want to have to bundle up and head outdoors.

However, when summer arrives – and with it warm temperatures and pleasant weather – we’re out and about, and the temptation to spend and overindulge can leave us struggling to stay within our budget.

Therefore, we tend to take some steps during the warmer months in order to keep our spending urges down and continue to abide by our budget.

Window Shopping…and Eating
We live in a sort of boutique-style neighborhood. There are tons of great restaurants, eateries, stores, and shops. This can be quite a temptation during the summer, especially when we end up taking a walk around our little village once or twice a day.

We’ve learned however, to take pleasure simply in the walk itself. We enjoy indulging by way of others. Window shopping and browsing is one thing, but with plenty of sidewalk seating for the various eateries, we end up getting to see all the other great meals and dishes that others are enjoying.

Not only is this great inspiration and a lot of fun, but we can typically steal these ideas and make them ourselves by way of internet recipes for much less than they would cost if we actually purchased them at restaurants. This tactic helps us keep our “going-out-to-eat” entertainment budget around $100 to $120 a month for a family of three.

Maintaining our Regular Budget
It is certainly a temptation to raise our budget come the summer months. However, doing so would only act as the go-ahead to throw caution to the wind and spend more money than we should. By maintaining our regular budget, we reign in our spending, force ourselves to look for better deals, coupons, and budget buys, and stretch our dollars.

By using local ad booklets that come in the mail, searching for coupons in local newspapers, and looking for daily and lunch specials at restaurants, we can still partake in plenty of activities, but are able to do so at a much reduced cost.
For example, in the last couple of weeks, we’ve used a 2 for $5 coupon at the local ice cream shop, a “15 percent off” coupon at an area restaurant, and a 3 for 2 go-karting coupon that have in effect saved us about $14 on just these three activities alone.

Taking Advantage of Low Cost or Free Activities
One of the great things about summer for our family is that there are so many free activities in which to participate. From heading out to various festivals and art shows, to walking over to the library, going to parks, cooking out, playing sports, heading to the zoo (which is free once we buy our family zoo pass for about $100 and that allows us unlimited entry for a year), and similar events.

These activities help us stay active and entertained, and do so with very little – if any – negative effects to our budget.

Grilling Out Instead of Going Out
We enjoy going out to eat, but doing so can have costs adding up in a hurry, and if we’re looking to keep from spending more during the summer, it pays to look for other culinary options that aren’t as expensive. Therefore, we tend to do more cooking outside during the summer.

Not only is it nice to spend time outside, but we like cooking a variety of foods on the grill and it cuts our food costs significantly when compared to going out to eat. We can pick up some Italian sausage, cook up some burgers, throw some chicken breasts on, or do some grilled veggies for a fraction of what it might cost to go out to eat, and the best part is, since I’m typically chef and server, we don’t have to tip!

Friday, July 6, 2012

Tracking Expenses in 5 Simple Steps

Tracking expenses may be one of the most important, if not the most important aspect in organizing and getting a handle upon personal finances. It’s crucial to numerous facets of personal finance planning and preparation.

I started tracking my own personal expenses in college and have continued to do so to this day. It has assisted me in all sorts of ways when it comes to saving money and making my dollars go further.

Here is how I track my expenses in five simple steps.

Step #1 – Selecting a Method
I’ve never found that tracking expenses needs to be something that is made overly-complicated. Doing so can just make it something that seems more trouble than it’s worth.

Initially, I tracked my expenses in college in a notebook, on a single sheet of paper. Eventually, I moved my tracking into an expense ledger, and later still onto a spreadsheet, but in all cases, it was done in a method that was most conducive to actually doing it and that made it as simple for me as possible.

Step #2 – Making it Consistent
Tracking expenses is one of those things that is typically most beneficial when you make it consistent. Tracking only certain expenses or at certain times can provide some input on where money is going, but it might not show the whole picture.
I’ve tracked every penny, every day for the last 15 years, and it’s amazing the amount of information I’ve been able to pull from this spending history. Staying consistent with my tracking has also allowed me to make it habitual, which takes some of the work out of the process.

Step #3 – Pooling Data
With a consistent flow of information coming from my expense tracking, I can begin to pool data from its stream of information. From how much I spend in certain expense categories such as food, housing, clothing, entertainment, transportation, etc., to seasonal spending trends (summer vs. winter, holiday season vs. the rest of winter), and year-over-year comparisons, I can begin to sort my data into various sets in order to take away the information that is most valuable to my financial life.

Step #4 – Pulling Data
I can then use the information I derive from my expense tracking to develop my own personal inflation rate, set budgets, plan for retirement, find expenses to cut, and apply this data to all sorts of other valuable financial purposes. Having consistent spending reports available is a great safety net when I find it necessary to look back at spending trends, review how changes of location, family or lifestyle have impacted my spending, and break spending trends down based upon expense category.

Step #5 – Making Adjustments
Over time of course, the education with which my expense tracking has provided me has helped me make adjustments not only to how I track and gauge these expenses, but to my spending itself. I use the foundation of my expense tracking to branch out into sub- expense category tracking when it comes to things like utilities, homeownership costs, and moving expenses. These offshoots of my overall expense categories provide me with the opportunity to delve deeper into my spending and begin to pick out ways in which to reduce or enhance it.

Wednesday, July 4, 2012

Budget Areas in Which We’ve Found Huge Savings

For me, not only does saving money make me feel good, but the process is something that I find quite interesting. Having tracked our expenses over 15 years, I’ve noticed interesting trends, found frightening revelations, and been able to utilize the data I’ve gathered to make personal finance decisions, adjustments, and modifications.

One thing in particular that I’ve been able to observe from this tracking is where we’ve saved the most money. Here are some of the high impact areas where we’ve been able to recognize the most in savings over the last five years.

Between car, renter and homeowners insurance discounts, we’ve recognized thousands of dollars in savings. By utilizing things like claim free, multi-line, multi-vehicle, and similar discounts on our various insurance policies, we’ve managed to save upwards of $2,000 over the past five years.

Child Care
Before having a child, child care expenses might not be something that people give a lot of thought to, but the costs relating to finding daycare for a youngster can really add up. In our area of Chicago, costs for a week of child care can range from $200 to $250 a week. That equates to an average of about $11,700 a year, or $58,500 over the five year period that our son has been able to avoid such care while staying home with me as a work-at-home dad.

And now, with another child on the way and another possible five years of such care at similar costs, and we’re talking about a total savings for both children of around $117,000. Now that’s some big savings!

Since I’ve been working from home for the past four-and-a-half years, we’ve saved significantly on transportation costs. Once I began working from home, we decided to sell one of our vehicles. Not only did we received $1,700 for this vehicle (which I had brought two years prior for $4,500), but over the next nearly five years, not having to maintain that vehicle has likely saved an extra $800 to $1000 a year in insurance, maintenance and upkeep costs.

Since the birth of our child -- and the resulting higher vacation costs -- we’ve worked to try to make our vacations ones that we can spend with family members and friends. This not only allows us more quality time with these people, but it saves us quite a bit of money on hotel costs as well.

I’d venture to say that by planning these trips to places where we can stay with friends and family, we’ve in turn avoided hotel costs for at least eight days each year. With many hotels often charging around $150 a night, this equates to $1,200 per year or $6,000 over the past five years.