Category: Misc
February 16th, 2010
In an interview a few months back on CNBC, Bill Gates (Founder of Microsoft) responded to a question on business with the following: “Well, it’s surprising that the fundamentals of business are pretty straight forward, you know. You try to take more in income than you spend in cost.”
The same could be said about personal finance, “The fundamentals of personal finance are pretty straight forward. You try to make more than you spend.” Personal finance at its most basic level is simply making sure that you are earning more than you are spending.
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tim
Categories: Misc
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.
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tim
Categories: Frugal Living, Misc, 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.
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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.
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tim
Categories: Frugal Living, Misc, Saving Money
June 3rd, 2009
You should almost never take the first offer given to you. There’s a good chance that a better offer will be given to you after you turn down the first offer. If there isn’t, you can almost always go back and accept the original offer.
When I was offered my first job out of college, I was able to get about a 5% increase over what I would have gotten by turning down the initial offer. I told the hiring manager that I was expecting more given the current market rate. I showed him the going rate for my position and location according to Salary.com.
Turning down the first offer works in most situations where there is a list price, asking price or an offer given to you.
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tim
Categories: Career, Frugal Living, Misc, Work
May 27th, 2009
What is the difference between being cheap, being frugal and being wasteful?
Cheap: You’re only concerned about spending the least amount of money.
Frugal: You are financially resourceful and seek the best value.
Wasteful: You buy more than what is necessary and typically buy things on impulse without prior planning.
Toilet Paper Analogy
1 Sheet vs. 3-4 Sheets vs. Big Wadfuls
If you only use 1 sheet you may be considered cheap in your TP usage.
If you use 3-4 sheets you may be considred frugal in your TP usage.
If you use big wadfuls you may be considred wasteful in your TP usage.
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tim
Categories: Frugal Living, Misc
May 13th, 2009
Some people get a thrill out of paying the lowest possible price. But there are several factors that need to be looked at to see whether the best price is really the best price.
Cost of Acquiring the Deal
If gas is $0.02/gallon cheaper in the next town, it doesn’t make financial sense to drive 5 miles out of your way to save $0.30. You’ll be spending more on gas (plus wear and tear on your car) then you would receive in actual savings.
Time
Spending hours doing comparison shopping at the mall to save $2 on one item is not an efficient use of your time.
Usage
If you buy a product just because it’s on sale but never use it, then you would have been better off if you never bought the product in the first place.
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tim
Categories: Frugal Living, Misc, Saving Money
March 20th, 2009
About Me
I am a 20-something currently residing in upstate New York who was brought up with a strong personal finance foundation.
About this Blog
This blog will provide you with free personal finance tips on topics such as investing, real estate, saving money, budgeting, retirement, frugal living, and more.
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tim
Categories: Misc