My Personal Finance Journey

Category Archives for Saving Money & Frugal Living

When To Rent And When To Buy – A Guide

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following is a post by MPFJ staff writer, Toi Williams, who is a professional personal finance blogger of Fine Tuned Finances. She has backgrounds in personal finance, sales, and real estate.
Many of us have been conditioned to think that if we want something, the best way to get it is to buy it.

But, there are many situations where it may be better for us to rent the items that we want instead. It can be difficult to decide whether it will be more cost effective to buy an item or to rent one, but there are some guidelines that you can use to help you make the decision.

Here is how to decide when to rent an item and when to buy it:

Houses

One of the biggest expenses for any household is housing. Many financial experts will tell you that you should try to purchase a home as soon as you can because of all of the advantages of home ownership, but in some cases, it may be smarter to rent your home than it would be to buy it. Here is how to tell the difference.
When To Rent
One of the biggest factors when determining whether you should be renting a home instead of trying to purchase one is the amount of time that you plan to spend in the area. If you have just moved to a new area and are not sure if you are going to like it, it may be better to rent a home for your family for a few years so you can see how you enjoy the neighborhood. This gives you the option to move to another part of town without a great deal of hassle if you decide that a particular neighborhood is not for you.
People that have just secured a new job and have relocated to be closer to their employment may also find that it is more beneficial to rent a home at first. That way, if you find that the job is not what you thought it was or if your new boss is a tyrant, you will not have the weight of a home to sell holding you back from exploring other employment opportunities. It is also better to rent if you feel you may be promoted to another position at another location within a few years. It is never cost effective to buy a house that you will be in for less than five years.
When To Buy
If you have lived in the area for a significant amount of time and know that you will be living and working in the area for the foreseeable future, then it may be more beneficial for you to purchase a home in the area. Purchasing a home will often result in lower payments than you would have to pay each month while renting a similar sized home and you will receive the tax benefits from the government that are reserved for homeowners. You will also have more control over the property and what you can do with it, including decorating any way you want, obtaining pets, and changing the exterior of the home.

Clothing

Outside of tuxedos for weddings, many people do not think about renting clothing to wear, but you would be surprised at the amount of clothing that is available to rent for people of all ages and sizes.

Because clothing can be expensive, it often doesn’t make sense to buy all of the clothing items that you desire for all of the occasions that come up. Here is how you can make the decision on what choice will be best.

When To Rent
For almost every special occasion, it will be more cost effective to rent the clothing that you need instead of buying new items. Special occasion dresses for women can cost hundreds of dollars, and suits for men can be even more expensive. In most cases, the main clothing items that are worn for these occasions are only worn once and then are left in the closet for many years untouched. Special occasions when you should consider renting clothing include weddings (especially wedding dresses and tuxedos), proms, and captain’s dinners on cruise ship vacations.
When To Buy
It is best to limit your clothing purchases to things that you will be wearing frequently and things that will last from year to year. Staple items, like t-shirts, jeans, and work clothes are always good purchases because you will get your money’s worth of wear out of them. The cost per wear ratio gets even better if you are able to purchase these items when they are on sale or on clearance. You should also buy the clothing items that you know you may need multiple times over the next few years, like a black suit for job interviews and funerals. Purchase shoes that can go with multiple outfits instead of unique ones that only match one or two items in your closet.

Tools

Buying tools can be very expensive, especially if you need specialty tools for a home improvement project. Fortunately, you do not always have to buy a tool to be able to use it for what you need. In many cases, it may be better to rent the tool than to purchase it outright. Here are some signs that can help you make the decision.
When To Rent
If you will only be using the tool for a specific project, like remodeling the kitchen or removing a tree from the backyard, it is often more cost effective to rent the tool for the length of time that you need it. Once you have used the tool, you can return it to the home improvement store that you rented it from, paying a fraction of the price of purchasing the item and saving valuable storage space in your home, shed, or garage. Renting a tool is also good if it is the first time that you have ever used that particular type of tool, so you can see how it works and how you like it before you decide to buy.
When To Buy
If you know that you will be using a tool frequently or for multiple projects, it will be more beneficial to buy it and have it on hand than to run back and forth to the store to rent it every time it is needed. Tools that are purchased should be versatile and you should be comfortable in its use before you decide to purchase it. Every home should have a toolbox with basic tools in it to handle basic home and appliance repairs, but other specialty items, such as chainsaws, demolition hammers, and electric sanders, should only be purchased if you are sure that you are going to be using it multiple times during the course of a year.
How about you all? Do you typically rent items you use infrequently, or do you just buy instead? What items do you usually rent?
 
 Share your experiences by commenting below!

***Photo courtesy of http://www.flickr.com/photos/john_hall_associates/3110849717/

How to Save Money When Hosting a Barbecue

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

This is a post by MPFJ staff writer, Jeff. Jeff writes about Sustainable living and finances at his website, Sustainable Life Blog.

Now that summer is unofficially here with the arrival of Memorial Day, it’s time to break out the bbq grill and get ready to enjoy it.

Summers are always a great time to catch up with friends, relax, and spend some time enjoying the nice weather. My wife and I are going to one wedding that’s relatively close, as well as a week trip to Alaska, but other than that, we will be sticking close to town and having/attending bbq’s with family and friends!

Hosting a lot of BBQ’s can get expensive quick, so we’ve thought of a few ways to keep our costs down:

  1. Don’t go overboard. Every time we have people over for a big bbq, we always talk about what a great time it was and how much fun we had. In addition to all that, we plan how much we spent and realize that we can do about 1 good bbq per summer without totally wrecking our progress on our other goals.
  2. Get help. Typically when we have a big BBQ, everyone asks what they should bring. Don’t feel like you need to provide everything yourself – you’ll just end up cooking the whole time instead of spending it with the people you invited. Have guests bring dessert and salads, and you provide the main course and the drinks. This is a great way to save money and get people invested in coming!
  3. DIY – Lots of great BBQ foods can be easily made at home for a fraction of the cost. You can make your own bbq sauce, your own coleslaw, and baked beans. The list goes on and on, and they will typically taste better than what you buy at the store.
  4. Change your meat options. Lots of the money we spent at our last bbq was because of the burgers we chose to make. They involved 3 different types of meat, and ended up being the most expensive part of our meal (If you’re interested, I believe it was the first one on this list). They were very, very good, but the next time we had a bbq, we switched to chicken for the main meat, with a bit of hot dogs and a few burgers for those that did not want chicken. Changing meats saved us a ton of money.
  5. Go easy on the fuel. Lots of people add too much charcoal to the grill when cooking, and end up leaving quite a bit of semi burned coals on the grill that have to be extinguished, and cant be reused again. You don’t need the whole 10lb bag for just a few people and you can easily get by with about 30-40% of the bag. If you’re using a gas grill, you only need the heat on high initially when cooking, once the outside is seared turn the heat down and it cook on a lower temperature.


 Those are some of our favorite tips for grilling during the summer and keeping costs down. 

What are yours?

Share your experiences by commenting below!

***Photo courtesy of http://www.great-grilling.com/images/basic-burger2.jpg

Navigating Your Finances – A Life Skill We Can All Learn

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following is a guest post. Enjoy!

There’s a constant stream of news stories these days about how busy most of us are in this global, connected, high-speed ultramodern 21st Century world. We find ourselves working longer hours and having less time to spend during our leisure time. One result of this is that it can be all too easy to put off chores and tasks that we really know we should tackle but just never seem to find the right time to get started on.

Financial spring cleaning

In much the same way as tending a garden needs a bit of TLC on a regular basis to stop it from becoming overgrown and out of control, our finances also need a regular focus of attention to help make sure everything’s on the right track.

In the broader sense, this can mean looking at all aspects of your personal finances. And, it is just incredible when you start to see where savings can be made. Something as simple as switching from one brand to another, or cancelling an under-used contract for a gym or DVD rental can claw back some much needed cash from the inevitable monthly expenditure. It doesn’t need to be about living frugally – it’s more about always keeping an eye on where the money goes and how it could be used to better effect.

Assessing your financial products

As creatures of habit, many of us will stick with a provider simply out of familiarity. In fact, it’s probably quite normal to use, say, the same utilities company for your entire adult life. But doing so can mean spending more than is necessary – if you shop around, there may well be deals and offers that will suit your budget and requirements better.

The same goes for the financial products that you have. Credit card interest rates differ, and it’s often the case that transferring your balance to another card can mean having an introductory period which is interest free – all the better to pay the money back without added cost.

It can be very useful to set a date for your financial spring clean – a day or evening when you look at everything from your current account and any credit cards or loans as well as savings accounts too. The latter is a particularly interesting area of personal finance – and even a cursory look at the savings section of sites like Money Saving Expert (MSE) demonstrate that the interest on saving can vary dramatically from one provider to another. One example MSE gives is of an ISA that offers 0.1% interest, which as MSE highlights is not only pretty low – it ‘underpays the market leader by £450’ – which is a lot of interest going unearned for those who have ISAs with that level of interest paid on them.

Finding products to suit your requirements

But, it isn’t all about reassessing the products you do hold. Having a close look at your finances also means seeking out any products you don’t currently hold that could enhance your life, save you money, or provide contingencies for unforeseen circumstances. The benefits of health insurance, for example, can bring about serious benefits in terms of peace of mind and allow you to get on with the important things in life without worrying.

Bringing it all together

While it may initially seem daunting to haul all those policy documents out of the desk drawer and to compare providers and so on, it’s one of those things where getting started is the only really challenging bit. Once you’re looking at the detail and seeing where money can be saved or more usefully spent, a sudden sensation often takes hold – and it’s the realization that you have grasped more control over your finances. And to go back to the garden metaphor I’ve used above, this means that you’ll be able to nurture and prune even more effectively as time goes on – and hopefully everything will be rosy.

How about you all? Is there anything in your personal finances that you working on optimizing in the near future?

Share your experiences by commenting below!

***Photo courtesy of http://www.flickr.com/photos/fatguyinalittlecoat/7090297073/sizes/h/in/photostream/

How To Save Money in The Living Room

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following article is by MPFJ staff writer, Miss T from Prairie Eco-Thrifter. If you want to learn how to live your dream life in a sustainable, healthy, and money savvy way, check out her site here.

How can you save money in the living rooms of your house?

In other articles in this series, we’ve talked about saving money by turning off lights when no one is in the room, adjusting the thermostat a few degrees and turning appliances off at the wall when not being used.

Are there any other ways that you can save money in living rooms?

Using the windows and drapes to control the temperature inside your living room is going to save you money on your heating and cooling bills. 

In summer, if you open the windows and drapes in the early morning, you will draw in the fresh, and usually cooler, morning air to lower the temperature of the room and freshen the atmosphere. As the day heats up, and especially before the sun hits that side of the house, close the windows and pull the drapes to help maintain the room temperature. You will save dollars by not turning on your cooling system until after midday. As the day cools down again in the evening, open your drapes and windows on the shaded side of the house, or where you will get a cool breeze blowing in, and let nature cool your house down again.

In winter, keep the drapes and windows closed in the morning. When the sun hits the wall of the house, open the drapes and let the sun warm the room and lift the spirits. As the warmth of the sun fades, close the drapes again to conserve the warmth in the room. Use drapes that are made from special insulating fabric for the best results. If you use this strategy in conjunction with adjusting the thermostat on your heating, you will certainly notice a drop in your energy bills.

Use ceiling fans to help with temperature control. 

In summer, they provide a gentle movement of air to cool you down. In winter, don’t ignore these great heating helpers. Most ceiling fans have a reverse function which forces the warm air in the room down towards the floor, keeping the warmed air where you need it and helping to keep the room warmer.

Consider ways in which the lighting in your living areas can save you money. 

Overhead lighting is usually very bright and may not be necessary in rooms where you are just watching TV, listening to music or having a quiet conversation. Change the bulb in your central lights to a low-wattage CFL to conserve power and use only as necessary to light the whole room. Use table lamps beside sofas and chairs for light as needed. By only turning on the lights you actually need, you could save up to a hundred dollars a year. During daylight hours, open the drapes instead of turning on the lights and watch your power bills drop.

When the time comes to replace or upgrade your electronic appliances in the living room, look for low energy usage and energy-efficient models so that you will be able to keep your energy bills as low as possible. 

Consider the size of the TV you buy; do you really need a huge TV that is going to use loads more power than a smaller one? Another little known fact about televisions – the factory settings on your TV may not be at the most energy-efficient levels, nor the most suitable for home viewing. Did you know that the brighter you have your TV, the more energy is uses? No, I didn’t either and I found I could adjust this setting several degrees lower and save money.

We now know that electronic equipment left on standby continues to use power, even though they seem to be turned off. However, these are often very difficult to get behind to turn off at the wall, so consider plugging them all into one power strip that you can put somewhere that is more easily accessible. It won’t be such a chore to turn off the TV, DVD player, computer etc and you will be more likely to do it regularly. When spending time on the computer, use the low power mode for as much of the time as possible to save energy as well as extending the life of the computer. Most people believe that a screen saver saves power but this is incorrect; set your monitor to sleep mode after a certain time or switch it off manually when not in use. Another misconception is that computers and other electronic devices last longer if they are never turned off; the best way to conserve power is to turn them off when not in use.

If you have more than one living room, such as a family room and a formal living room, you probably usually only use one room at a time. I know when we had a formal living room in our last house, we hardly ever used it. Another way to save money is to turn the heating or cooling off in the room you aren’t using. If you plan to use the room, you can always turn it back on ahead of time but in the meantime, you’ll have been saving even more off your power bills.

I’ve noticed a drop in our energy bills by putting most of these ideas into practice  While, on their own, they may seem minor, the most effective way to save money in living rooms is to put several small initiatives in place, rather than looking for one major to change.

How about you all? What techniques do you all use to save some money in the living rooms of your house? Have you used any of the strategies mentioned above?

 Share your experiences by commenting below!

***Photo courtesy of http://prairieecothrifter.com/wp-content/uploads/2012/08/iStock_000014230326XSmall-300×199.jpg

Are Expensive Professional Photographers Obsolete or Still Worthwhile?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following post is by MPFJ staff writer Travis. Travis is a customer blogger for CareOne Debt Relief Services, and also appears weekly at Enemy of Debt.  Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he’s learned along the way. As a father and husband, he provides a unique perspective on balancing debt, finances, and family.

My son was confirmed over the weekend, and as we were getting ready to leave for the church, my wife asked me if I had filled out the picture order form.

It was the last straw. 

It started with the beginning of the new school year last fall.  The kids put on their newly purchased school clothes for the first time.  Both of my kids headed off to school picture day carrying an envelope with a check for $28 to pay for the the middle of the road package we normally buy.  In October came the email with the opportunity to purchase pictures from the Twin Cities Marathon which I completed just a week prior.  I really just wanted one picture, which would have cost me $25.  No thank you. Spring time school pictures rolled around in March, which we usually skip.
How much does a kid change in six months anyway?

Things really picked up at the end of the school year with pictures for Dance ($24), baseball ($28), and  Middle School Graduation Class Photo ($10).  Luckily, we’ve moved on from thinking pictures with Santa Claus and the Easter Bunny are necessary as well. 
There I stood looking at the choices available for confirmation pictures shaking my head.
Photography is big business because people want a record of their lives to look back and reflect upon.  Kids grow up fast, and parents feel guilty not being able to perfectly remember everything about their child at every phase of their life. 
Parents like to show other people their kids.  Photo packages come with pictures of all shapes and sizes to be displayed in offices and end tables everywhere.  Of course, there’s also the wallet size pictures that parents exchange with each other like trading cards and the photo magnet to stick on the refrigerator. 
But just how much use do you really get out of those pictures?  For our family, the 8×10 of each kid goes in a frame next to the fireplace, a 5×7 goes in my office frame and some get given away to family.  The rest stay in the envelope and get shoved in a drawer only to eventually settle to the bottom with the envelopes from previous years.  The pictures we give away end up in a frame for some period of time, then they too either get shoved in a drawer.  Or, they may be hidden behind the next year’s picture pressed together with the pictures from previous years like a layered time capsule.
The insane thing is that pictures themselves are dirt cheap.  I can take a picture and send it off to Walmart online and in an hour I can pick up as many 4×6 pictures as I want for 9 cents each.  What you’re really paying for is the photographer’s talent, time, and the rental of his professional equipment.
Years ago, the concept of using a professional photographer made sense.  Once upon a time, there was this thing called film that you put in a camera.  When the roll was used up, you took it to a local drug store and crossed your fingers that at you kept your finger out of the lens for at least one picture.  Hiring a photographer was essentially a guarantee that you would get decent pictures. 
But does it really make sense today? 

Times have certainly changed with digital cameras.  A person can take a picture and view it instantly.  If you don’t like it, you just delete it and yell, “One more!”  Technology makes getting a good shot so much easier especially with today’s high resolution cameras that are light years ahead of cameras that even the professionals used just a few years ago.   You can take dozens of rapid fire shots and be assured that you’ll capture a keeper.  Now that almost every phone includes a camera, digital photography is almost impossible to avoid.
If the purpose of taking photographs is to capture the stages and events of life, wouldn’t you want to take you own pictures anyway?  Let me ask you this:  What offers a better remembrance of your child: A stranger snapping a picture of Johnny with his hair combed perfectly sitting in front of an artificial backdrop, or you capturing him looking at back over his shoulder at you excitedly, but with just a little bit of fear in his eyes as he climbs aboard the school bus for his very first day of kindergarten?
Pictures like that capture the very essence of life.

The pictures we did buy over the course of the last nine months cost $118 for about 40 pictures.  In contrast, to physically print out pictures I took myself through Walmart, those 40 pictures would have cost less than $5. 
Grab your phones and your digital cameras people.  Take pictures.  Lots of pictures.  Capture those special events and those smiles.
Capture life.



How about you all? Do you think professional picture prices are out of control, or are they worth it? How much do you pay for pictures during a year?

 Share your experiences by commenting below!

***Photo courtesy of Image courtesy of graur razvan ionut / FreeDigitalPhotos.net

A Little Splurging is OK (It May Even Be Good for You)

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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 Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following post is by MPFJ staff writer, Kelly Gurnett. Kelly runs the blog Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. You can also follow her on Twitter and Facebook.


We’ve all heard of the “latte factor”— the idea that cutting back on regular luxuries, no matter how tiny (like that daily latte from Starbucks) can lead to big budget savings. And, it’s a good notion to keep in mind. Mindless splurges, big or small, have repercussions when we’re trying to live a financially smart life. It’s hard to pay down debt, build up savings, or meet any other money goal if you treat yourself too often.

But, being a miser and not treating yourself at all can be just as bad for your budget—and your happiness.

The Deprivation Factor

It isn’t always easy to be smart financially. We’re only human. As disciplined and goal-oriented as we may be, it can be tough to see our friends going out to eat, going to the movies, or grabbing that infamous latte and knowing we can’t afford to do the same. It puts our focus into a deprivation mentality—that in order to meet our money goals, we have to cut things out from our lives. Frugal living becomes a negative thing.

As anyone who’s ever been on a diet can attest, focusing on what you can’t have isn’t the best way to motivate yourself to stay on course. If anything, it just makes you want what you can’t have even more.

Yet that’s the way so many of us focus on making financial changes—by stripping away things we used to purchase, by denying ourselves things we want—and that often leads to a feeling of frustration. Sure, we know our long-term goals are smart, will bring us happiness, yada yada yada…but we live in the now, and right now, being so frugal all the time can make us kind of miserable.

Which is why treats—strategically and smartly granted (like one would do for children or pets)—can be exactly what we need to help us achieve our financial goals.

They infuse a little positive reward into the routine. They give us a much-needed break from all the striving and sacrificing. They give us something to look forward to now and again, so we don’t suddenly find ourselves blowing the bank on a super-pricey item because we just can’t take it anymore.

It Doesn’t Take Much

My husband and I are in a more frugal than usual situation at present. He recently lost his job due to disability, and we effectively had to cut our budget in half in the span of a month. Once you start moving past cutting the premium cable package and occasional massages and begin looking for ways to slash your grocery budget, you know you’ve gone beyond the point where the “latte factor” is even a consideration.

That said? We’re still finding ways to “treat” ourselves now and then. Because it makes it easier to be as stringent on a regular basis as we need to be.

Our treats aren’t nearly as grand as the ones we allowed ourselves before the job loss (a night at Dave & Buster’s seems like an unattainable luxury now), but they’re still treats in that they’re not strictly “necessary,” but they help take some of the pressure off. They give us a little reprieve from the stress of being a one-income household and let us just enjoy ourselves, even in the smallest of ways.

The fantastic luxuries we allow ourselves now? A movie at the dollar theater (with homemade popcorn snuck in). A container of the one-step-up-from-store-brand coffee. My occasional $3 box of hair color (typically 50 cents after couponing skills). They’re not huge, by any means, but they’re still treats. And, to be honest, I enjoy them every bit as much as I did our Dave & Buster’s outings, because I know how lucky we are to even be able to afford these little things.

So don’t starve yourself financially. Allow yourself a little treat now and then. Your budget will ultimately thank you for it (and so will your sanity).

How about you all? What special “treats” do you allow yourself, in spite of being on a budget?


 Share your experiences by commenting below!

***Photo courtesy of http://farm5.staticflickr.com/4142/4936746457_eb22f010ca_o.jpg

How To Save Money When Setting Up A New Home

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following article is by MPFJ staff writer, Miss T from Prairie Eco-Thrifter. If you want to learn how to live your dream life in a sustainable, healthy, and money savvy way, check out her site here.

There are so many things to consider when setting up a new home, especially if it is your first home. There’s lots of stuff to buy, redecorating to be done, maybe even some renovating, and it all seems so very expensive.

Well, read on, because here are some great ideas to help you save money when setting up a new home.


Get Organized

Organization is the key when taking on any big project, as it helps you understand what has to be done and what order it all needs to be completed. This can save you money right there; when you have a time-plan, everything flows smoothly and you don’t waste money having to do things more than once. Make lists for everything so nothing is forgotten. You need a list for what to buy, what to do and when to do it.

Consider which things on your list are necessary to have straight away and which can wait. 

I found the best way to sort this out was to ask myself if the item was a need or a want. A ‘need’ is something you can’t live comfortably without, like a refrigerator. A ‘want’ is something that would be nice to have but you could live without it, like a second TV or artwork for the walls. Focus on the ‘needs’ when just starting out and you will save money by spreading the expense; when you are settled in a bit you can save up for or manage to pay for the ‘wants’.

The next step, after you’ve made your lists, is to do some research. 

Don’t be tempted to just rush out and start buying; there are much more money-saving methods for getting the many things you need, when setting up house for the first time. First of all, ask around your family and friends to see if anyone has a spare/old/no-longer-used refrigerator, TV, vacuum cleaner, microwave oven, washing machine and whatever else you need. You might be pleasantly surprised at what people have stored away that they don’t use anymore and would be happy to let you have. It’s fine to have second-hand goods when you’re starting out; it cuts costs dramatically at the time and then spreads the expenses of getting new things over time. As these second-hand goods wear out or you find you have the cash, you can then replace them gradually, in your own time. This also reduces your stress levels!

Take Advantage of Thrift Stores

I’m sure you will have crossed several items off your list with this strategy and saved hundreds, if not thousands, of dollars. The next step is to scour the thrift stores, auction houses and second hand shops to see if you can find a few more things at amazingly low prices. These outlets are a great place to find sofas, dining tables and chairs. If you are little bit of a handy person, like me, you can restore older furniture to make it look like new; this is a great way to co-ordinate pieces with your new décor. I bought a beautiful old oak dining table that had seen better days but was solid and sound. I sanded it off, filled a few dents in the surface and then re-polished it. It only took me a couple of weekends and our friends thought it was a new piece of furniture! It cost me under $50 for the table and the reno, plus a bit of my time.

Now you will be left with items you might need to buy new. 

Again, research will save you money when setting up a new home. Go online to compare prices and check out your local stores to find where the best deals are. Be prepared to negotiate; you ‘ll be surprised how many stores are happy to drop their price. Look at different models and don’t be temped to buy more than you need. You are just starting out; there is just you or maybe a partner as well; do you really need a 12 seat dining table or a huge family-sized refrigerator? This is what I mean when I say don’t buy more than you need. Later on, when you are able to spread your expenses, and the need arises, you can upgrade to the bigger, better pieces. Right now, it’s more about getting yourself set up without going into huge amounts of debt to do it.

Another tip about saving money when setting up a new home is not to rush into buying lots of decorating ‘extras’. Take some time to settle in and get to know your new place. If you’re anything like me, you’ll probably move the furniture around numerous times before you are happy with the placement. Wait until you’ve lived with your stuff before deciding on a firm decorating scheme. This will save you money because you won’t buy something that doesn’t fit in.

Setting up house is so much fun, whether it’s for the first time or the tenth. There’s going to be lots to do and even more you need to buy, but by using some of these ideas, you will certainly save some money in the process.

How about you all? How have you saved yourself money when getting a new house/apartment set up after a move?

 Share your experiences by commenting below!

***Photo courtesy of http://prairieecothrifter.com/wp-content/uploads/2011/10/iStock_000016696172XSmall-300×198.jpg

Help Your Child Open a Roth IRA with His Summer Job Money

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following post is by MPFJ staff writer, Melissa Batai. Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food. She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.

Summer is upon us, which means that many high school and college students are picking up summer jobs.

Whether they’re working as lifeguards, camp counselors, or waiters at local restaurants, these students will likely find themselves more flush than they’ve been in several months.  (Of course, flush is a relative term here, but still, teens will have some money to spend.)

When I worked during the summers, I wasn’t too financially savvy.  I used the money to pay for my car and gas, and I had fun with friends.  Chances are that’s what most teens do. Some more financially savvy teens may be setting money aside to buy a car or to pay for part of their college education, which are both worthwhile goals.

But, what if you’re a parent of a teen and you suggest that they use some of their money to do something they’ve likely not thought of doing before–opening a Roth IRA?

How to Open a Roth IRA for Your Teen

If your teen has a source of earned income, she can open a Roth IRA account, with your help.  You’ll need to serve as the custodian of the account since she can’t open the account herself.  (The account will be hers alone when she is of age.)  You’ll just need proof of her income. 
Keep in mind that not every brokerage offers Roth IRAs for teens, but a few that do include Vanguard, Janus, Schwab, and T. Rowe Price.

Benefits of Setting Up a Roth IRA for a Teen

They’re likely already in the lowest tax bracket.  Because teens typically earn a low wage and can’t work that many hours, especially during the school year, they’re likely already in the lowest tax bracket.  That means they’ll pay very little in taxes on the money before they invest it.   When they pull it out at retirement, they won’t pay taxes on their withdrawals.

They can withdraw the money as a down payment on a house or for college.  To maximize the power of the Roth, it’s best to keep the money in the account and let it grow.  However, if they needed to, they could use their contributions for a down payment on a house or for college without tax or penalty. 

CNN Money warns though, “You and your child should know that earnings money taken out for qualified higher educational costs, while free of early withdrawal penalties, will be subject to income tax.”  In addition, the earnings money taken out from the Roth may be considered income, which could have an impact on your child’s financial aid award for the next year, so proceed with caution with this option. 


Having a Roth IRA will not affect their student aid eligibility.  Simply having a Roth IRA will not affect a student’s financial aid availability as it is not included when the school calculates how much the child can afford to contribute to his own education.

How to Convince Your Child This Is a Good Idea

Convincing your teen to part with her money to invest it for retirement that will be 50 years away is not easy.  However, there are some strategies you can use to convince her.

1.  Start when she’s a tween, offer her simulated interest.  To help your child understand compounding interest, when she’s perhaps 10 or 11, have her put some money in the bank.  If she leaves that money there for 1 year, you’ll match her dollar for dollar.  If she leaves the money there for 2 years, you’ll give her $2 for every $1 she contributes.  This will help her understand the power of compounding interest and delayed gratification.

2.  Give your child a set amount to add to the account, and you add the rest.  If your teen is making $3,000 this summer, have her contribute $500, and you contribute the rest that you would like to see her invest.  (Your teen’s account can be funded up to the amount she earns in a year or $5,500, whichever is less.)

3.  Match your child’s contributions.  If your child agrees to contribute $500, then match the amount she saves.
Convincing your teen to invest in a Roth IRA may be a hard sell, but it’s worth trying.  Your teen’s few thousand dollars invested today could grow to a few hundred thousand by the time he’s ready to retire.  Imagine teaching your child now how to save for his future. 
In addition to the initial monetary perk, you may also convince him to be a lifelong saver.  If he continues to contribute to his Roth throughout his lifetime, he could easily have over a million dollars in that one account by the time he retires. 

How about you all? Have you ever tried to open up a Roth IRA for your child or tried to convince them to start saving money at a young age?

 Share your experiences by commenting below!

***Photo courtesy of http://www.flickr.com/photos/oldrebel/8726635625/

Are People Born Frugal?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following post is by MPFJ staff writer, Catherine Alford. Cat is a freelance personal finance writer who blogs at www.BudgetBlonde.com.

Ever since I was a little girl, I have been very aware of money.

I had my own little safe, and I kept a running total of the amount of money I had in it. My parents paid me $0.01 per page of every book that I read, so I spent my summers absorbing Nancy Drew, collecting the amazing fee of $1.00 per 100 pages, and putting it safely in my box. I never wanted to waste my money, and I liked counting it. I guess you could say that even as a young child in grammar school, I was pretty frugal. I just didn’t know to call myself that yet!

Interestingly enough, my parents raised all three of their children the same way, with monetary incentives for good grades and the ability to make choices about the money we received for our birthdays and other holidays. Yet, while my siblings are both extremely intelligent professionals today, I am the only one who borders on obsessive when it comes to frugality as an adult. My two siblings both work hard, but they allow themselves rewards for their hard work. That’s a concept I’m still working on.
So, this leads me to the question posed in the title of this post: Are people born frugal?

Argument #1: Yes, People Are Born Frugal

It seems that in my case, I have always been this way.

When my parents gave me $200.00 a month “allowance” during my college years, I never asked for more. I carefully planned how I was going to use it, and if I wanted to go on spring break, I used money that I earned from my own job to do so. This is not something they specifically taught me or expected of me. It’s just how I am. I never wanted to ask them for more than they gave me. Even today, I find it very difficult to accept help, even when I need it.

Now, before you think I’m patting myself on the back here and singing my own frugal praises, I definitely want to acknowledge that I’ve made my own fair share of money mistakes. I’ve gotten into thousands of dollars worth of credit card debt and then gotten out of it. I even took out more student loans than I should have, and I cringe every month when I send in the payments.
Yet, even when I was in credit card debt, it wasn’t because I was snatching up Louis Vuitton bags and buying my friends rounds of drinks. The debt came as a result of stretching myself too thin, not having a savings, and my husband quitting his job to go to school. Still, knowing what I know now, I could have easily avoided it.
Even on my darkest debt days, I was still hunting down coupons and deals. I was still a frugal person at heart. I just didn’t have a good handle of budgeting and saving (yet!)


Argument #2: No, People Are Not Born Frugal 

The other side of the argument is maybe people aren’t born frugal. Maybe people have to learn this trait from their parents or from experience.
For example, there are a lot of people who write about the habits of their parents and grandparents and the ways in which they are frugal, like canning vegetables and hanging clothes on the line. Those are things we can actively learn by watching.
As for experience being a teacher, there are tons of personal finance bloggers who I admire who had a history of reckless spending and turned it all around to become some of the most money savvy people I know. In their cases, they learned frugality from getting in over their heads and actively seeking a way out.
Experience is a great teacher, and perhaps it can show people that being frugal doesn’t necessarily mean you are poor or someone to be pitied. It actually means that you are pretty smart with your finances.

What Do You Think?

Do you think that people are born frugal? To take it a step further, do you think frugality is a skill that can be learned or an inherent trait that we are born with?
What is your own personal experience with frugality? Did you have frugal parents who showed you the way or did you learn about money management from your spouse or a friend?
I’d love to hear your thoughts. As for me, I think I’ll always be a frugal person at heart regardless of how much money I might make in the future. It’s just who I am. However, I do plan on getting much better at rewarding myself for my hard work and not feeling guilty when I do spend my hard earned money on something I want! That will take time, but it’s something I’m actively working on. Now, let’s hear from you.

Share your experiences by commenting below!

***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/a/ae/Smooches_(baby_and_child_kiss).jpg

Should You Lend Money to Family and Friends?

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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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The following is a post by MPFJ staff writer, Kevin Mercadante, who is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry.

Lending money to family and friends is usually done with the best of intentions. But, this is also a potentially difficult area from both a financial standpoint and a personal one. You want to help a friend or family member, but if something goes wrong you could lose more than money.

What are some considerations you should take into account before lending money to family and friends?

Carefully consider the reason for the loan

Since the stakes are high in making this kind of loan, you should give careful consideration the nature of the relationship, as well as to the purpose of the loan. There are necessary loans and luxury loans, and which it is could impact your decision.

A necessary loan is one that you almost have to make. It will be one to cover a critical need, and doing so is basically what family is all about. An example is a loan to a close family member for an emergency – such as to cover a sudden medical expense. You might go ahead with it without much thought.

And then there are luxury loans, and this is where it gets more complicated. If the loan is to an extended family member to cover the down payment on the purchase of a car, that will also involve a car loan, this is a situation you may want to avoid entirely. But if you are loaning money for the purchase of the first car to your own child, that would be one you’d probably make, even though it is not an emergency situation.

Seriously consider the possibility and outcome of non-payment

When you loan money to family and friends, there is always the risk of losing money, but there’s also the possibility of destroying a family relationship. You have to consider this carefully before extending such a loan.

Some people will make the loan because they fear that if they don’t then the relationship will be destroyed anyway. But, that kind of situation is usually forgotten in a short period of time. Loan defaults however, are not.

If the friend or family member does not pay you back, or pay you back fully, you may harbor negative feelings sufficient to destroy the relationship. Alternatively, the friend or family member may come to resent your efforts to collect money from them. They may even believe that as a family member, you should forgive the debt entirely.

Blood may be thicker than water, but it’s not always thick enough to overcome money disputes. If you believe that there is a real potential for this to happen, you might be better off taking the bitter pill up front by saying no, rather than allowing it the blowup later when the family member can’t pay.

If you make the loan, be sure to formalize it it writing

If you do decide to proceed with making the loan, you should formalize it with a written agreement.

This is partially to protect yourself in the event that the situation becomes a legal matter. But, it is mostly to spell out the specific terms and requirements of the loan. That will put the borrowers responsibilities in black and white, that way there will be no dispute as to what was expected.

Since there is already a relationship complicating the business aspect of the loan, there’s also the possibility that it will be viewed as a casual arrangement. Absent a written agreement, the relative may assume exactly that and not feel any specific responsibility to repay or to pay in a timely manner.

Lend with no expectation of repayment

This is actually a biblical directive – lend money, but do so with no expectation of repayment. In effect, this will make the loan into a gift. But, this also means that you probably should not make a loan to any friend or family member who you are not prepared to give a gift to (always remember to consider gift tax laws as well is you decide to go this route!).

The friend or family member can pay the loan back if they’re willing and able, but from your standpoint, you will view it as a gift. If the loan is not repaid, you will not feel slighted and the relationship will be preserved.

Find another way to help without making a loan

If you would prefer not to make a loan, or you have made loans to family and friends in the past and gotten burned, you might see if you can find other ways to help.

For example, you may decide to provide them with money for trade. You can decide to buy something from them that will provide at least some of the cash they need. Alternatively, you could have them do some work for you in exchange for the amount of money that they need. In this case, they’ll have the money that would’ve been a loan, but you will be compensated in exchange. That will be a win for both parties.

You may also advise them either to avoid the purchase, or to buy something that is less expensive that will not require a loan from you. In this way, you might actually be helping them to avoid taking on an obligation that they really cannot afford the first place. It’s a bit risky, but far less so than if you make the loan and face the possibility of default.

How about you all? Have you ever made a loan to a family member or friend? Did you formalize it with a written agreement?

What happened to the relationship as a result of the loan being paid or not paid back? 

 Share your experiences by commenting below!

***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/9/99/Making_friends.jpg

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