January 25th, 2010
When making a purchase, people typically only consider the upfront cost but for many items there are additional costs to consider. Below are some examples of costs that will be incurued after ownership.
Car: Fuel (need to consider type of fuel and its fuel efficiency), insurance rates, and maintenance costs.
House: Taxes, maintenance costs, insureance, mortgage.
Phone: Phone plan (If you buy a smartphone, you’ll likely need to buy a data plan in addition to a voice plan to utilize all of the features).
TV: Electricity (Typically the bigger the TV, the more electricity it’s going to take to power).
When looking at a big purchase, be sure to look at the total cost to own. Sometimes spending a little more money up front for a quality or more efficient product that will result in a lower total cost.
-
tim
Categories: Frugal Living, Misc, Saving Money
November 24th, 2009
When most people hear of a recession, they tend to think of it as a negative. Not everything about it is negative though. In recessions, people tend to make the most of their money.
For people who see a drop in their income due to the recession, they are forced to find ways to spend more efficiently because they have to.
For people who’s income level were not affected, they tend to spend more sparingly since there is a fear that their job may be next to go.
Will you maintain the frugal habits that are picked up during the recessionary times and use them when the good times come? If you start putting 10% of your paycheck into savings because you are scared that you may lose your job, then there is no reason why you can’t save 10% when your job stability improves.
-
tim
Categories: Frugal Living, Saving Money
August 26th, 2009
My local library offers more than just books, they also offer DVD, CD rentals and many other amenities free of charge. While theoretically I pay for all this through taxes, it costs me nothing additional for items that I take out.
While my local library does not always carry everything at their site that I’d like, I can place a request for materials into the online catalog which draws from all the public libraries in my region. After I place the request online, the material(s) will be sent to my local library so that I can pick it up at my convenience.
The library is a great resource for me. For books/movies usually I’ll only read/watch it once and never look at it again, so it works out perfectly.
-
tim
Categories: Frugal Living, Misc, Saving Money
July 15th, 2009
The secret to not getting rich is to set your lifestyle around your income.
To simplify things, we’ll take a look at the following hypothetical scenario from a high level and assume no investment spending occurs. Bob earns $100,000 in a given year and spends $100,000 in that same year. Sue earns $50,000 in a given year and spends $40,000 in that same year. Sue is therefore able to build $10,000 more wealth than Bob despite earning significantly less than him.
Sue is able to build more wealth than Bob because she spends her money based on what she needs to live her modest lifestyle. If Sue gets a promotion and earns $60,000 next year, she won’t spend more to move her lifestyle up, instead she’ll still only spend $40,000 next year.
Bob however sets his lifestyle around his income. If Bob gets a promotion and earns $120,000 next year, he would increase his spending to $120,000 next year to live a more luxurious lifestyle.
If you emulate Bob and set your lifestyle around your income, you will never get rich.
-
tim
Categories: Frugal Living, Misc, Saving Money
June 24th, 2009
Ever buy something in the clearence section just because it was cheap? Buying an item soely becuase it’s a good ”value” is a waste of your money. This includes buying items in bulk to receive a discount when you only have plans to use only a small portion of the items purchased.
It’s an entirely different story if you buy items on the cheap to resell them for a profit. There are many people that buy soely for the thrill of getting a good deal without a plan for their purchased goods. Buying without a plan is wasting money and not “saving” you any money.
-
tim
Categories: Frugal Living, Saving Money