Category Archives for Saving Money & Frugal Living

8 Ways to Help You Get Rid of Your Debt

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The following is a guest post by Richard Jacobs. Enjoy! 

If you are looking for ways to help you get rid of debt, you will come across many tips, but these 8 tips will help you get rid of your debt for good. The one thing you need to keep in mind is to make sure you follow these tips, and stick to them to make them work for you.

Get rid of your credit cards –

In today’’s world, people have started depending on credit cards a lot. If you are in a habit of swiping your credit card whenever you go to the market or to dine out, get rid of the habit. The best way to do this is to lock your credit cards at home to avoid using them at all. However, keep in mind that you do not close the accounts as it will result in a reduced credit score.

Stop adding more debt – 

Some people think that they can pay off old loans by taking on new loans, but that is not the right thing to do. Piling on debts will not help you get rid of your financial problems, but will keep you stuck in your debts for longer.

Change your lifestyle and attitude –

Your attitude plays a very important role when it comes to paying back loans. If you have a “can-do attitude”, you will succeed in your efforts. You will also need to make changes to your lifestyle, such as by cutting down on your spending.

Small things can bring a lot of difference, such as taking the bus to your job instead of driving. When buying groceries or other essentials for your house, look out for sales, discounts, and offers to use and save money. Stick to this lifestyle for a few months and you will be surprised with the amount you can save this way.

Look for ways to improve your earnings – 

Always lookout for ways to help you make more money. Work hard at your day job, as you might be rewarded by your employer in the form of bonuses or a raise. Also look for opportunities that can give you some extra cash, like a part-time sales job or a freelance work-from-home option.

Plan your budget and stick to it – 

Make an estimate of your monthly earnings and expenses and then decide on how you will spend the available cash. Keep a portion of this income to pay off your debts.

Pay more than the minimum payment toward your debt –

Many people tend to pay only the minimum amount towards their credit card bills, mortgages, and other loans. If you have extra money at hand, pay a little extra with every payment toward your debt.

Get help from your loved ones –

Your partner and family can help you get out of your debts. Discuss your financial problems with them, and get all the help you can to get out of your financial crisis.

Keep yourself busy –

Keep your self busy in your work, and you will not end up wasting time at the bar or at the mall, spending the money you have at hand.

Conclusions

Remember, getting out of debt can take some time, especially if the loan amount is high, but if you stick to the tips mentioned above, you will rid yourself of your financial miseries. Small sacrifices made today will help you go a long way.

How about you all? What has been the biggest contributor to you significantly reducing or eliminating your debt balances? 


Have you tried any methods of debt reduction that have NOT worked at all?


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• @ Getting rid of your credit cards – 
  • I definitely agree with Richard that cutting down credit card usage/spending is essential if you are looking to banish your credit card or other debt completely. If you get behind on credit card payments, the interest rates can rack up to above 20% (accruing daily), which is “bad-news bears” for just about anyone!
  • Along the same lines as locking the credit cards up somewhere at home, another trick I’ve heard that is effective is actually freezing your credit cards in a Tupperware container filled with water/ice in your freezer. This way, you have to physically thaw them out to use them. I’ve heard the physical act of doing this thawing is a great deterrent to using the cards again.
  • Locking or freezing up your credit cards should only be used as a last resort for people who absolutely do not have the control to stop credit card spending. Instead, I have faith that the majority of people with credit card debt do possess the control to simply carry the credit card in your wallet, but to only use it for emergencies. However, you know yourself better than I do, so make the decision based on what will work for you!
• @ Stop adding more debt (i.e. – don’t bother with debt consolidation loans) – 
  • The topic of debt consolidation is a truly fascinating one!
  • On one hand, it sounds like a great idea because you can combine many smaller balance loans for credit cards, etc in to one and pay just one lump sum each month.
  • However, as I discussed in Part 1 of my helping a friend get out of debt series, I personally do not think that debt consolidation loans and debt counseling is worth the time and effort unless your financial situation is such that a) you are on the verge of bankruptcy or b) making your minimum payments results in you not being able to feed yourself or your family.
  • Furthermore, I think that the majority of the time, people need more than debt consolidation to truly “win” against debt; they mainly need to change their habits and behaviors in regards to their finances/spending.
• @ Planning your budget – 
  • I’ve said it before, and I’ll say it again – budgets (in the simplistic sense) do not work. 
  • I personally do not believe that people should plan their finances by laying out a budget and then “seeing what’s leftover” at the end of the month to pay their debts and save for retirement. 
  • Instead, the better option is to 1) track your spending to determine your spending patterns and monetary requirements, 2) decide at the beginning of the month how you will allocate funds to your different needs, and then 3) actually transfer the money or pay your debt accounts at the beginning of the month before you have time to spend the money.
• @ Paying more than the minimum debt payment –
  • I absolutely agree with this piece of advice! In fact, I’ll venture a guess and say that if you have a sizable amount of consumer debt, you will actually NEVER 100% pay it off if you only pay the minimum required payment! 
  • However, I would advise everyone to consider the account hierarchy prior to paying too much on their debt accounts (i.e. make sure you have an adequate emergency fund first).
• @ Getting help from your loved ones – 
  • In my mind, getting advice from a loved one is great, fine, and excellent! 
  • However, actually getting money from a loved one is an entirely different story. 
  • Too many times, I’ve heard and seen friends or family members “loan” each other money in an unofficial capacity. In other words, there was no legal loan agreement involved. This is simply foolish because the majority of these “loans” are never paid back. 
  • If you want to help out a friend or family member, GREAT! However, it would most likely be better to simply make the “loan” a gift and not have any need to get the money back. 
  • If you want to actually loan them the money with the intention that it will be repaid, I would recommend hiring a lawyer to draw up a loan agreement.
• @ Keeping yourself busy – 
  • I agree with this bit of advice, with one caveat. 
  • I agree because I’ve found that in my life, some of the times when I have saved the most money has been when I wasn’t doing much else besides work or school.
  • However, one caveat/thing to watch out for is that when you are really busy, you might be tempted to go out to eat a lot to save time on cooking. Spending from this can add up very quickly, so just remember to take 30 minutes to cook or prepare your meals yourself, and you’ll be set up for success!

***Photo courtesy of http://www.flickr.com/photos/digiart2001/2214844805/sizes/l/in/photostream/

Petsmart vs. Petco – Which Is More Affordable?

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• Purina Dog Chow (34 lb bag)
• Petsmart = $23.99
• Petco = $21.99
• Winner = Petco = $2 less

• Science Diet Cat Food – Light Version (17.5 lb bag)
• Petsmart = $32.99
• Petco = $34.99
• Winner = Petsmart = $2 less

How about you all? Do you shop at Petco or Petsmart? Which do you prefer? Does store layout play a role in which you prefer? 


Share your experiences by commenting below!

***Photo courtesy of http://img.docstoccdn.com/thumb/orig/2374207.png

Top 5 Ways to Reduce Car Insurance Costs

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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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How about you all? What methods/techniques do you use to save money on car insurance? Do you use any of the ones listed above? How much do you pay on car insurance per year?


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• @ Parking off of the street in a driveway or garage to lower your car insurance –
• While it definitely makes sense that parking your car off of the street when it is not in use would reduce your risk of getting hit (and possibly having to tap in to your insurance if the other driver isn’t insured), I’m not certain that this will get you a discount in the United States.
• This is due to the fact that if your car is parked and it gets hit by another car/driver, it would be quite rare for the driver of a parked car to be found “at fault.” Furthermore, it is required by law in the US for every driver to have (at a minimum) liability insurance covering the other driver in the event that the wreck is your fault.
• Does anyone have experience with this aspect (I’m not much of an expert when it comes to car insurance)?
• @ Having a steering lock to prevent theft – 
• Steering locks used to be VERY popular in the US for a brief period of time. It was almost like they were a “fad” which came and has now faded.
• In fact, it’s quite rare that I see people with a steering lock on their car.

***Photo courtesy of http://www.flickr.com/photos/stignygaard/194225065/sizes/l/in/photostream/

Need to Save Some Money? Take a Look at Your Auto Insurance!

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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 guest post. Enjoy! 

Many people today are struggling financially; therefore, you might desperately need to find ways to save money. One way that you can save is through your car insurance.

Car insurance is considered by most people to be expensive, putting a financial strain on them. However, individuals sometimes are actually paying too much for their car insurance, as there are ways that you can find cheaper insurance.

Car Insurance Discounts

You should always ask your insurance company if they offer any discounts. There are many companies which provide the following discounts to their customers:

• Safe Driver Discounts: If you follow the law, you could receive a discount of up to 15 percent. Your driving record should be spotless for three to five years to qualify for this sort of discount.
• Senior Citizen Discounts: If you are over 50, you could be eligible for a discount.
• Taking Defensive Driving: If you take a driving safety course, and you can show proof that you took the course, you might qualify for a discount.
• Good Grades Discounts: If you have a child who is old enough to drive, you might be offered a discount for their good grades. If the student has completed a course in driver’s education, you possibly could receive an even lower discount.
• Car Features: If your car has anti-lock brakes, an anti-theft device, or airbags, an insurance company might give you a discount on your car insurance.
• Low-Mileage Discount: If your place of employment is close to your home and you rarely take long trips, you could qualify for a discount based on your mileage.
• Multi-Car Insurance: If you have more than one car insured, you can receive a discount.

Save Money By Raising Your Deductible

If you raise your deductible, you can also save money on insurance. The higher the deductible, the lower your premium will be. However, you want to make sure that you can pay your deductible before you agree to increase it.

Timing of Your Premium Payments Affects Your Rates

If you are able to, you can save money on car insurance by paying the premium in full. Many people pay insurance every month, but most companies give you the option to pay it in one lump sum. The overall amount of money that you pay will be lower if you choose to pay it all at once (or twice a year is a common payment frequency in the United States as well).

Be Sure to Shop Around and Compare Rates

Another great way to save on car insurance is to shop around for the best rates. You might be paying too much because you are trying to be loyal to your agent. However, cheap insurance companies now are very competitive, and you need to search around for reputable agents to get a great deal. Most online companies will provide you with free quotes; therefore, try to get several rates before deciding on car insurance.

Conclusions

There are ways to lower your insurance rates if you can just find the right company to offer you the best deals. You need to try to save money any way that you can, and car insurance is one area in which the savings can really add up.

How about you all? What ways do you use to save money on your car insurance? What discounts have you been successful in finding and/or negotiating? Do you prefer to get your insurance company-direct or through a local agent?


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• As I’ve mentioned before, because the issue of car insurance affects such a large number of people, it makes for very good discussion in the blog and/or online forum setting. In fact, recently, I wrote an article about how car insurance rates specifically vary based on gender, age, and geographic location. Pretty interesting results!
  • Needless to say, I’m glad to continue the debate with this article as well!
• @ Ways to Save Money on Car Insurance 
  • Be sure to shop around before buying – One of the most important things for me when I start the process of looking for any type of insurance is to make sure to shop around and get a good feel for market prices of insurance premiums from a variety of providers. There’s a great deal of competition out there in the insurance market today, and we as insurance buyers can take advantage of this!
  • Purchase multiple insurance policies from the same provider – In addition to the list of discounts detailed above, another one I’ve heard of quite commonly is getting a price break if you purchase multiple types of insurance (e.g. business, home, car, life, etc) from the same carrier.
    • As far as the extent of the discount you can receive with this tact remains unknown to me as of right now. However, it is something that might be worth trying! But, just be careful that the insurance premiums of the “add-on” policy from the same provider is in fact a competitive, low price compared to other insurance providers.
• @ Good grades car insurance discounts – 
  • My parents actually were able to use this technique to get a break on pricing for my car insurance when I was in high school. They’d simply request a copy of my report card to provide proof of my grades to the insurance agent.
• @ Raising your deductible to lower car insurance premiums – 
  • It’s definitely true that raising your insurance deductible will significantly lower your monthly premiums.
  • However, one needs to exercise a good bit of prudent deliberation before raising your deductible. First and foremost, you need to make sure that for whatever deductible you decide upon, you will always carry at least this amount in a cash emergency fund. By having an emergency fund, you ensure that you are able to immediately pay your car insurance deductible and get your insurance policy to kick in.
  • Personally, I think a good amount of a deductible for car insurance would be $500-$750 (about the same as for health insurance deductibles). This is significantly lower than my homeowner’s insurance policy deductible of $2500 due to the fact that there is much more risk of me being hit by another car and having to tap in to my car insurance than for my condo burning to the ground.
• @ Question of whether it’s better to “buy local” or direct from a nationwide company – There seems to be an ongoing debate/battle between different groups about whether it is better to “buy local” versus to buy direct from a national or multinational corporation. And, car insurance is no exception to this “war!”
  • Personally, while I would probably prefer to buy local (mainly to have someone in my same town to talk to about my policy), when it comes to car insurance, I would not hesitate to buy direct from a big provider like Shelter, State Farm, etc, if it meant saving me a large sum of money.
  • When I purchased the insurance for my condo, I compared prices at many insurance providers (both local and national). Ultimately, I took out a policy with a local insurance agency who brokers policies from the national corporation, Erie Insurance. As it turned out, the price for the policy using the agent was no more expensive than buying direct from the company. Go figure!

***Photo courtesy of http://www.flickr.com/photos/insurewish/4112407433/sizes/z/in/photostream/

You’re Homeless. How Would You Improve Your Situation?

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• In my possession, I have $20 and a valid Driver’s License.
• I am living in a mid-sized Midwest United States city with an adequate bus/trolley system for public transportation. In this way, transportation is not a limiting factor.
• I do not have a college degree(s), but did graduate from high school (or have the equivalent G.E.D certification).
• I have clothes that enable me to fit in with regular people. In this way, I don’t automatically appear homeless.

How about you all? If you were homeless, what steps would you take to improve your situation? Have you ever known any one that was homeless?


Share your experiences by commenting below!


***Photo courtesy of http://www.flickr.com/photos/roughgroove/2473248707/lightbox/

My Personal Finance Journey Vs. The United States of America – Round 2 – What Interest Rate is Your Savings Account Earning?

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For the past three months, we were running a poll on the left sidebar of the site. This poll was seeking an answer to the question below:

What annual interest rate are you receiving on your savings account?

With savings account interest rates being almost sickeningly low these days, the goal of this poll was to make sure that we’re all doing the best we can in maximizing our savings account returns. 


In the course of the three months that the poll was running, we received a total of 41 votes, with the answer distributions as shown in the pie chart below:

As you can see in the chart, the majority of people on My Personal Finance Journey are receiving an annual interest rate of 1% or higher. This is very good! Great job readers!

Second place was an interest rate in the range of 0.76% to 1%, and third place was an interest rate of 0.05% of less.

How Does This Compare With The Rest of The United States?

So, we were able to see that the majority of MPFJ readers are earning 1% or higher in interest on their savings account totals. Having established this, we then wanted to see how these numbers compare to the rest of the country.


According to BankRate.com, the national average interest rate for savings and money market savings accounts is 0.17%.


Examining the results in the pie chart above, over 78% of MPFJ readers are earning a higher interest rate than the national average. While this is a really good result, there is still room for improvement. With online banks such as ING Direct offering 1% interest rate savings accounts with no fees and no minimums, there really is no excuse for people in this day and age to be in any category below the 0.75-1% interest rate group.


Of particular concern to me is the 14.6% of voters in the 0.05% interest rate or lower category. These people are most likely not taking advantage of online savings account options. For example, Bank of America and Wells Fargo (some of the biggest brick-and-mortar US banks) savings account are only currently offering a 0.05% annual interest rate. For those readers that fell in to this interest rate category, I would highly recommend checking out the BankRate.com savings account comparison link above to find an online bank that is offering a higher interest rate. You can easily connect these online accounts to your brick-and-mortar bank’s checking account, and many of them are offering interest rates above 1% per year. Please let me know if you have any questions!


A big thanks to everyone for voting in the poll and generating some good on-site discussion about this very important topic.


The next 3-month poll (up now on the site in the same top left side-bar location) involves the topic of mutual fund expense/fee ratios. In today’s economy, many people use mutual funds to invest for retirement in their 401k and/or IRA accounts. However, since there are thousands of mutual fund options to choose from, it’s imperative to select funds that offer the lowest fees possible while still accomplishing your investment strategy. One way that I accomplish this is through the use of low-fee index mutual funds. But, more on that later after the poll results are tallied! I look forward to seeing how the voting goes!   


How about you all? How does your current savings account interest rate compare with either the national average or the results of the site poll? Do the poll results seem consistent with what you’ve experienced as well?


Share your experiences by commenting below!

How Do Your Car Insurance Rates Vary Based on Age, Gender, and Geographic Location?

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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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One of my favorite topics to ponder over and research is the cost of living differential based on certain demographic factors. Of these, probably the most interesting (to me) is the difference that is often seen in the cost of goods and services based on geographic location. It’s amazing how much you can save simply by locating yourself in the right place!

In my experiences of living in New Jersey, Pennsylvania, Arkansas, and Virginia, I’ve unofficially found that car insurance is no exception to this phenomena. During my time in PA and NJ, I found that many of my friends were paying upwards of $3000 per year in car insurance. When I told them that several people I know in Arkansas pay $1200 per year, they were simply amazed!

Because of the drastic difference in the price of car insurance I’ve heard from my friends and wanting to save money on car insurance being a topic applicable to almost everyone, I thought it would be an interesting thought exercise to do a little online research to see if significant price differentials exist based on other demographic factors.

Investigation Setup

Insurance Provider


According to CarInsuranceCompanies.com, the largest car insurance provider in The United States is State Farm. State Farm has a total of 75 million policy holders, corresponding to 18.7% market share. This is quite impressive!

When I first started looking in to this investigation, due to State Farm’s popularity, I was hoping to use their car insurance quotes tool to generate car insurance premium prices based on the different demographic information we input. However, since you have to input the specifics of your current car insurance coverage, using State Farm’s quote tool would be far too complicated for a broad analysis like we are looking for.

Because of this, my focus shifted to reviewing previously-published studies on the Internet.

How Do Car Insurance Premiums Vary Based on Age?

In my quest to find a specific answer to this question, the best resource I could find was the table below from Bob @ Christian PF (originally published on Insurance.com). I added a % Difference column to Bob’s original table in order to specifically see the change in premium rates at different ages. It definitely makes for some interesting analysis!

From the table above, the most shocking finding is that it appears that between the age of 16 and 25, car insurance premiums decrease by almost 50%! Wow! That’s truly amazing! However, having been a driver during college and especially high school and seen the increased risk factors for young drivers, I cannot say I blame the insurance companies for charging high premiums. It’s probably smart business with how likely 16 year old driver’s are to get in a wreck.

In my experience, the specific risk factors present to drivers in high school are as follows:

• Driving with a full car of people – In high school, within each group of friends, there can exist a pretty significant range of ages (significant in high school terms being 1 year – haha). Because there are fewer numbers of drivers, more people are likely to pack in to one car. Naturally, with more people in the same car comes more talking and distraction, leading to an increased risk of accidents.
• Loud music – High school kids are also more apt to listen to very loud music (subwoofers with huge amplifiers were a popular item among my high school crowd!). This loud music can take the driver’s attention away from the road and increase the risk for accidents to occur.
• Driving being a “novelty” – Since driving is a new experience in high school, kids are likely to spend an enormous amount of time simply “cruising” around town. Many times, this takes place late at night, which can increase the exposure of the driver to accidents and/or drunk drivers.

How Do Car Insurance Premiums Vary Based on Geographic Location?

The best resource I found answering this question was the table below from The Insurance Information Institute.

Examining the table above, it’s not surprising to me that 7 of the top 10 most expensive states for car insurance either are Northeast states or contain many Northeast state retirees (Florida). However, it’s surprising to me to see Louisiana on the list as having such high car insurance premiums (pretty much the same as New Jersey). Does any one have any guesses to why this is? I thought Louisiana was a pretty rural, low-traffic state…


The states with the lowest cost for car insurance premiums were Iowa and North Dakota. This makes intuitive sense to me since these states typically have low traffic and low population density. What’s wild is that car insurance rates in these two states are over 50% lower than rates in DC and New Jersey.

How Do Car Insurance Premiums Vary Based on Gender?

According to a recent study published on PRweb.com about California car insurance premiums, the average annual policy for a male driver was 20% higher than for a female driver. They also found that the gender-pricing gap decreases as driver’s get older, with a fairly minimal gap being present above the age of 25.

However, at the age of 18, car insurance policies for male drivers can be upwards of $1,500 more than for females. Pretty wild stuff!

There is, of course, logic behind why the car insurance companies charge more to insure male drivers (except in five states where it is against the law to charge different rates for females than for males). According to the study, males are 196% more likely to be involved in a fatal car crash than a female.

In my opinion, the reason that guys are more likely to be involved in a fatal car crash is simply because we are not as smart as women when it comes to cars (sorry guys). In my experience, guys are more likely to participate in dangerous activities simply for the sake of “playing” with their car, whereas women typically just want to use the car to get where they are going.

For example, guys would be tempted to participate in the following activities, whereas I would think that girls would have no interest in doing so…

• Going 140 mph on the interstate simply to see how fast their car can go.
• Go shopping cart bowling at 80 mph slamming the shopping cart in to a concrete post.
• Go down a hill in a neighborhood street at 75 mph (in a 25 mph zone).
• Doing doughnuts in a parking lot or a field simply for the fun of it.

Needless to say, it’s very interesting to explore the fundamental psychological and economic differences between being a male and female. I think the next topic that I will explore regarding these gender gap differences will be seeing whether males or female typically get cheaper life insurance. It should be an interesting investigation!

How about you all? Have you experienced these or any other trends in car insurance premium rates? 


Share your experiences by commenting below!

***Photo courtesy of http://www.flickr.com/photos/madaroni/4964347820/sizes/l/in/photostream/

Psychological Tricks Retailers Use to Make You to Spend More – The Importance of Smart Shopping in Today’s Society

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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 guest post. Enjoy!

We have all had the experience of walking into a store to purchase a simple carton of milk and coming out with a shopping cart full of other items! It may be funny when this occurs, but it is not by at all by accident. This is due to the fact that malls and stores alike are deliberately set up to entice you into buying more than you need or want.

This is different than shopping for items online. Take looking around the Internet for a credit card for example. At least when it comes to this exercise, you can research online and spend time finding the most suitable card for you. You can use a reputable and informative site to view a whole range of cards offering low APR, rewards, and cash back features.

On the other hand, malls and stores have spent millions of dollars researching the psychology behind shopping. Everything is done for a purpose, and many of these strategies are subtle but effective. The atmosphere, the lighting, the carpeting, and the shelves are all set out within a store to achieve maximum sales of the most profitable goods and to keep shoppers in the store for longer periods of time.

Strategies Behind Store Layout

Have you ever wondered why the toy departments or washrooms are placed at the back of the store? It is because customers have no choice but to walk through other departments to reach them. In this way, customers are exposed to goods they may not have otherwise seen, and therefore, this creates a sales opportunity. It is a clever and common technique employed by most retailers.

Strategies Behind Shelf Placement

High-priced goods are displayed on shelves which allow easy access, whilst their lower-priced counterparts are placed on lower or higher shelves which are not as convenient. In the busy rush of daily life, consumers will often just reach out and take what is there without seeing the cheaper alternatives.

Some manufacturers pay stores more for their goods to be placed within easy reach. Often time, products will be put in some sort of bin or in a particular area to suggest they are a bargain. Check carefully before trusting that this is true as sometimes it is simply a psychological trick. Many times, the items are reduced, but only minimally.

When purchasing perishable goods especially, think about how long they will last. It can be what is known as a ‘false economy.’ You may save a dollar on fruit in the reduced aisle, but if this has to be eaten within 24 hours, it may not be such a bargain. Check the price against regular fruit that will not spoil so quickly.

Sensory Strategies

Psychological research shows that when shopping, consumers are more likely to purchase an item if they touch it. This is why you will find soft cashmere sweaters near the entrance to a store.

Using a shopping cart frees your hands to touch items, which is when temptation is strongest. If possible, use a basket or at least the smallest size shopping cart. Human beings do not like empty space, so a smaller cart will feel better than a larger one. The risk with this is it looks empty, even when you have many items in there.

Conclusion

The best advice is to prepare a list before entering the shop and stick to it. Don’t be seduced by the sights and smells of the store! Be single-minded and you will save money by shopping smartly.

How about you all? What strategies have you seen that stores/retailers use to get customers to spend more? Have you ever encountered or fallen prey to any of the ones on this list above?


What tips do you have for other readers to avoid these schemes? 


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.

• @ Strategies behind store layout – Discussing the intricacies that go in to how a store is laid out is a source of un-ending interest for me!
  • Just off of the top of my head, the store layout strategy that I see most often is placing the milk at the very back corner of the store. This ensures that all customers (since just about everyone in a grocery store needs to buy milk) must first walk through all of the promotion “discount” items throughout the aisles on their way to retrieve their milky-treasure.
• @ Strategies behind shelf placement – One strategy for product placement on shelves that I see quite often (in addition to placing higher-priced brand name items at eye level) is placing products within one side of the aisle where the highest priced items are on your left and the lower priced items are on your right.
  • My hypothesis is that they think that people are most likely to scan products on an aisle the same way they read a book (left to right). This ensures that people first see the higher priced items, increasing their sale.
  • Any one else seen this?!
• @ Sensory strategies of cart size – I am definitely guilty of falling prey to this strategy!
  • Whenever I go on one of my big once-a-month food/household items shopping sprees at Wal-Mart, I generally continue to buy food until my shopping cart is full. And, if you’ve been to Wal-Mart recently, you probably know that the shopping carts are BIG!
  • I imagine that if the carts were smaller, I would spend significantly less. Wal-Mart sure has me figured out! 🙂
  • However, since I buy mostly all generic Great Value food/products and will use the food eventually, I consider these “smart” purchases and feel OK spending this money.

***Photo courtesy of http://www.flickr.com/photos/james_lumb/5587734031/lightbox/

A Simple Way to Banish Credit Card Interest

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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 guest post written by Colin Robertson from Credit Card Balance Transfer Offers, a blog focused on the money-saving and debt-destroying aspects of balance transfers. Enjoy!

How about you all? Have you ever used 0% balance transfer deals to reduce your credit card debt? If so, how did the process shake out? Were there any hidden fees?


If not, what has kept you away from using them? If you’ve never had credit card debt, would you use balance transfers?


Share your experiences by commenting below!


Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.


First off, great post Colin! I really enjoy these first-hand experience posts about debt reduction. It puts a very human feel to reading a blog, and I like that!

• @ Spending excessively in your first job out of college – 
• Colin brings up a very prevalent issue that I have seen all-too-often with highly educated early 20’s graduates with whom I was acquainted at my old job. 
• It’s definitely understandable how it would happen: you go to college for 4 years busting your tail to get your engineering degree (or equivalent). You’re most likely strapped for cash and having to cut as many corners as you can on your apartment, meals, car, etc. 
• Then, SHA-BAM!! You land an engineering job where right out of college you are earning $60,000 – $80,000 per year. You have no children and no family to take care of. You’re living the high life, and the money is plentiful! Sure, maybe you have accumulated some student debt in your undergraduate days, but the interest rate for that is low, and you have no trouble affording it!
• Because of your new-found healthy cash-flow situation, it’s easy to be tempted to start taking out loans to buy furniture, cars, $10,000 wedding rings, or even a new house.
• However, by simply attempting to maintain some of the same lifestyle you had in your college days, you can really save a lot of money and get ahead in life. 
• In my first job out of college, I was able to save about 60% of the money I made. This really enabled me to get ahead, especially since the money was being invested during the recession of 2008-early 2009.
• @ Key to reducing credit card debt = changing your habits –
• I couldn’t agree more with Colin’s point about it being crucial that he not only 1) get the balance transfer to enable him to get ahead on his payments, but 2) that he also make sure to change the habits that landed him with credit card debt in the first place. 
• Even with the most favorable 0% balance transfer terms, you’re not going to be able to pay off your debt if you keep on spending excessively.
• @ Using balance transfers to get rid of credit card debt –
• First, I want to add one word of caution for anyone thinking of using a balance transfer. Please make sure to watch for hidden fees. In other words, do what Colin did here and read the fine print! This will ensure that no surprises come your way as you commit to a balance transfer deal.
• Second, I am still trying to decide if I would recommend using balance transfers or not when people are paying down credit card debt. Indeed, there seems to be a split in the advice of personal finance experts on this topic as well.
• On one hand, I cannot argue that using a balance transfer will allow you to pay less interest in the short term. However, in the long run, after the 0% promo deal is up, what will the interest rate be? Will it revert to being 20%? 30%? Will the whole ordeal of finding a 0% balance transfer deal just take away the person’s focus of saving and paying off their debt?
• Because of these reservations I have, in my Helping a Friend Get Out of Credit Card Debt Series, I currently just recommended that my friend focus on 1) calling their credit cards to lower their interest rates and then 2) creating their Debt Free Action Payoff Plan.

***Photo courtesy of http://www.flickr.com/photos/alancleaver/4105755730/lightbox/

How Strategic Currency Conversion Can Prevent Losing Money in Translation

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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 guest post from the editorial team at Card Hub, a leading credit card comparison website.

Wasting money – It’s what we all strive to avoid and why many of us read a blog like My Personal Finance Journey. While there are endless ways people waste their hard-earned funds, one of the most frustrating is currency exchange while on a vacation to another country, which can add up to 15% on the cost of a trip.

There’s something about overpaying for a supposedly equivalent amount of money that just doesn’t sit right with me, and I’m sure many of you feel the same. So, what’s the best way to approach currency exchange, and how can we avoid losing cash in translation? Let’s find out.

Current State Analysis of Foreign Currency Exchange

The name of the foreign currency exchange (FXCM) game is minimizing fees and finding the lowest possible exchange rate, which means shopping around. Luckily, you’ll have a bit of a head start in this endeavor as we at Card Hub recently conducted a study of the exchange rates offered by the market’s major players: 15 of the largest consumer banking institutions in the U.S.; Visa and MasterCard, the most widely accepted credit networks in the world, and Travelex, the world’s biggest airport forex operator. Overall, this study provided three major insights into consumer currency exchange that will help guide your shopping:

1. Credit cards save you the most money on currency exchange.
2. You should never convert currency at the airport, if you can help it.
3. Bank exchange rate offers vary widely, so shop around.

More specifically, no international fee credit cards on the Visa and MasterCard networks can save you 14.7% on currency exchange relative to Travelex and 7.9% as compared to your average bank. Therefore, getting such a card is the first step in minimizing the cost of overseas travel.

That’s not the end of the story, however, because you’re going to need cash when traveling abroad and Credit Card 101 says that a credit card cash advance is a terrible idea given the high fees and interest rates. You should therefore use a low-foreign-fee ATM card when you land.

Final Thoughts

There are a few additional details to keep in mind in order to bring your currency exchange savings plan to fruition.

• First, it’s important that you open a no international fee credit card before booking any flights or hotels because the foreign fees that 90.2% of credit cards charge apply to any transactions processed outside the U.S. 
• Second, make sure to notify your bank of your travel plans in order to avoid suspicion of fraud and resulting account difficulties. Last but not least, though it might be tempting, decline any merchant’s offer to covert your bill into U.S. dollars or you’ll be left paying an exchange rate that would make an airport currency exchange service’s offer look attractive. Other than that, all that’s left is to enjoy your travels.

How about you all? Did you know that credit cards have the most favorable foreign currency exchange rates? What strategies do you and your family employ to save money on converting currency? 


Share your experiences by commenting below!

Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article

• Great article here! Since my family and I like to travel to foreign countries for vacations, currency exchange is an important topic for my personal finances. It is also one to which I’ve given a bit of thought before.
• Typically, in order to save money on foreign currency exchange fees during vacations, my family does the following:
• Withdraw the majority of the cash we need for the trip before we travel at our home bank branch. This saves money on foreign ATM fees. Then, when we get to our destination, we split up the money among the four of us, with each of us carrying a bit of the cash in our money-belts for security.
• Because all of our credit cards carry the typical 3% foreign currency purchase fee, we try to only purchase “big-ticket” items using our credit card.
• If we need to exchange our US Dollars for the local currency, we generally always try to do so at a bank (because we’ve found banks have better rates than currency exchange booths).
• @ Results of currency exchange study – Very interesting study! I would definitely like to see the complete methodology and results of the study for further reference. My thoughts on the results are listed below:
• I completely agree that 1) bank exchange rates vary (so shopping around is very good!) and 2) that exchanging money at the airport will cost you more.
• I definitely didn’t know that credit cards provide the most favorable foreign currency exchange rates. I would have thought that one would pay a premium for the convenience of having the credit card do the conversion without you having to take any action. I’d like to see the complete details of the study for this part especially!
• @ No-International Fee Credit Cards – I have heard of these credit cards before, but I have resisted applying for one because I really only travel about 1-2 times per year outside of the US. Because of this, I don’t think I would use the card enough to make it worth its while. In addition, I would suspect that since no-international fee cards have this added no-fee perk, certain other features such as cash-back rewards, APR, etc, would be less favorable than normal credit cards.
• However, if I were to get a no-international fee credit card, I would make sure to get one that 1) has no annual fee and 2) has a rewards program.
• A list of cards that fit these criteria can be found here.
• Examining this list, there are 8 credit cards that fit the two criteria described above. Of these 8 cards, none offer cash-back bonus levels as high as my current favorite credit card for domestic spending – The Chase Visa Freedom Card.

***Photo courtesy of http://www.flickr.com/photos/epsos/5902557577/sizes/l/in/photostream/