Making money buying at garage sales
February 17, 2009 | Leave a Comment
Garage sales and charity shops can be great places to pick up bargains that will earn you extra money by reselling them on Ebay. Practice will give you confidence as to which types of item have the best resale value….toys, gaming items, designer clothing etc all sell well in my experience.
Garage sales and charity shops can also be a great place to obtain high quality fashion items that can either be re-modelled and re-sold or save you money on fashion. Look out for garage sales in more affluent neighbourhoods as there will often be great items to be bought there at cheap prices!
A great way to save money through buying at garage sales can be purchasing like new goods that are still with labels and using them as part of a gift basket for birthdays, thanksgiving and Christmas.
Credit Card Debt – Are You Risking Bankruptcy?
November 2, 2008 | Leave a Comment
Why do people use credit cards at a level to risk bankruptcy?
Credit card debt is one of the main reasons why private individuals end up in bankruptcy. Coupled with the negative equity many homeowners now have during the credit crunch and recession, risks of bankruptcy are running higher than ever. Temptation towards excessive use or credit cards can be high as household bills soar and the money needs to come from somewhere to pay the mortgage and the bills. In times of despondancy during recession, retail therapy is also a common behaviour racking up further credit card debt. Debt resolution becomes an increasing concern.
How might using credit cards in this way lead to bankruptcy?
It is not a real solution, though, as excessive borrowing on credit – often from multiple lenders- makes more room for error on remembering repayments on time as well as keeping track of just how much those debts are costing you each month in total. Before long, it is common to find that the expense of those credit card bills is exceeding that of the household bills you were struggling with. Where will the money come from then? More debt means one step closer to bankruptcy.
How can I use credit cards wisely then?
It is always best to keep to a maximum of 2 to 3 credit cards. This is part of good financial management enabling easy monitoring of debt levels and not having so many payment deadlines in a month that you might forget some.
The main reason for bankruptcy in America and the U.K. is credit card debt. Households have developed the habit of paying off household expenses using credit cards day by day instead of using cash or checks.
As the credit crunch and recession start to bite deep, those with existing credit cards are relying on using credit to pay for food and heat and light. Essentially they are paying for these things with money that they do not have coming in….eventually the credit train will hit the buffers if this behaviour does not change and bankruptcy will inevitably follow.
How can credit card behaviours be changed?
There is little doubt that the media and company advertisers try to make out that we are old fashioned or something is wrong if people don’t use plastic (credit cards) instead of cash or checks. Never underestimate the power of advertising! Infact it is those paying with money that they actually have that will have the last laugh as they understand just how far that money will stretch each month and adjust their spending choices accordingly.
It takes nerves of steel to change deeply ingrained spending habits. Credit card statements show what you have available to spend before what you owe on your statement. Similarly, bank teller machines often state what you have available to spend instead of the actual amount in the bank plus the overdraft available to you should you choose to borrow on it.
Communication of information in this way leads people to behave as if they actually have the money that is available to them instead of it being available to them to borrow. It makes the lenders and credit cards companies richer whilst leading the borrower one step closer to the bankruptcy courts.
Remember, as the the level of your credit card uses takes you closer and closer to only making the minimum payment on you card statements each month, the time it will take to pay it all off will extend hugely. With a credit card debt of $5K, it will take 382 months to pay off your debt with the minimum repayment each month (assuming no further use of the card in the meantime. Meanwhile, that debt is costing you $7,300 in interest alone making a total to repay of $12,300 for $5000 debt.
Suddenly we start to see how that $150 pair of shoes you fancy treating yourself to on your credit card will ultimately cost you a total of $369 by the time you have paid off the interest of $219 (at current rates on them) over nearly 32 years. Suddenly they sound less appealing don’t they? They sure must be comfy to spend that much…yet across the land, people are making similar spending decisions daily that are leaving them in bondage to debt!
So what about the future of credit cards in the current economic climate?
Nobody could fail to notice the struggle that our economy is facing. With redundancies increasing, real estate prices falling and household bills rising it is imperative to get you financial house in order before there is a sudden change in you life circumstances that could lead you towards bankruptcy.
- If at all possible, in the current climate, change high interest credit cards into lower interest cards….this will increase the debt busting power of your dollar.
- Try to double the minumum credit card payment each month to really start clearing that debt.
- Avoid using your credit cards when at all possible. Leave them at home so you have to return for it in order to use it. In that cooling off period you may decide you did not really need to make the purchase after all.
- Do not use your credit card for household bills or food purchases.
- If you really are in debt too deep to get out on your own, go for debt counselling and make sure that you stick to the budget they set for you otherwise you will be heading straight to the bankruptcy courts.
If you really can’t face sitting down with a stranger and going through your financial situation, there are packages available for debt resolution that will help you to develop your own strategy to get out of debt in 3 – 5 years….completely….now that sound better than nearly 32 years the way things are looking now doesn’t it? This resource pack for eliminating debt is entirely legal and workable without needing to involve anyone else except your creditors themselves. Click on the link to find out more.
Saving Money on Subscriptions
October 7, 2008 | Leave a Comment
Ramit Sethi in his post explaining the “A la Carte method of saving money” claims that we often overspend on services that we subscribe to as, after an initial blaze of enthusiasm, usage often tapers off. At this stage it is possible to save money by paying for these services a la carte (or as we use them).
Why are subscriptions so popular?
Subscribing to a service such as cell phone, the gym, cable television, book clubs etc is often a lazy way of ensuring that, as the subscription fee whizzes out of the bank account each month, these services we enjoy using are available throughout the month so there are no worries about using them when money becomes in short supply at the end of the month. Why else would the favourite day for standing orders and direct debits be the first day of the month?
Have you thought about how subscriptions will be saving businesses money too? Think about it. They set the price of your monthly fee knowing what average use is made of the service they provide.They have reliable regular income coming in and save money on posting an invoice to you, paying clerical staff to open mail, process the payment received and chase up money owed. There is usually a 28 day cancelletion period as a minimum. It is so easy to miss that deadline …. so the business ends up entitled to extra payments from you and you are out of pocket for a service that you no longer want. Trust me…subscription systems are set up entirely to benefit the service provider whilst, on the surface, being offered as a special deal and favour to you, the customer.
How can I check the value for money that I am getting from subscriptions?
Ramit Sethi recommends cancelling all subscriptions then keeping a careful log of exactly what you have spent on each service on a pay as you go/a la carte basis.
This may be a bit extreme for some of us. You will already intuitively know which subscriptions you are not using as much as you thought you would. These are the ones to start saving money on.
A good way to start is, if your memory is good, to look back on the last month and list:
1) How many films you watched on your dvd rental scheme (by the time you posted them back and forth).
2) How many visits to the gym you made after you felt under the weather on a couple of days and the boss had you working all the hours available on some major project.
3) How many minutes of call time did you use out of that cell phone contract? If you get free calls to family would you do better on a lower contract?
If you cannot remember, make a list over the coming month. Once you have this information, find out the unit cost of each service you use if you were paying per item. Compare this with your subscription rate and, if your usage for the month being looked at was typical, you have your answer as to whether you should go a la carte or subscribe to that service.
Other ways to save money on subscriptions
1) Do you need your subscription to be at its current level or could you save money on a cheaper level? Do you, infact only watch 2 dvds per week instead of the expected 3 – 5? Could you get away with pay as you go and free family numbers instead of a contract on your cell phone?
2) A few months ago I was looking to save money on all household bills and rang around suppliers to get cheaper deals. When I contacted my suppliers and said I was considering changing, I got 20% off cable television and 33% off my cell phone contract if I stayed with my current suppliers. All businesses are eager to avoid losing custom as a result of the credit crunch and recession. Now is the time when, as a customer, you have more negotiating power. If you do your homework you can often negotiate significant savings on subscriptions and household bills….which can only help household finances.
Budgeting to Save Money on Household Bills
October 3, 2008 | Leave a Comment
What is budgeting?
Budgeting is simply the art of keeping track of all of your household expenses and making sure that enough money is set aside to cover each of the costs incurred during the time period that you are budgeting for (usually a month or a year or a specific project). If, after looking at necessary expenditure, your income is insufficient, you have three choices:
- draw the shortfall from savings;
- raise extra funds to cover the additional costs; or
- save money on existing costs so as to raise the money needed for other items of expenditure.
So which method is best?
There is no right or wrong answer to this question.
- Drawing money from savings to meet growing household bills is the short-term solution that many are making during the financial pressures of the credit crunch. However, it is only short term as eventually savings will run out and then what options are left to you?
- Selling unneeded household items will also only provide a short-term solution as above. What happens when all that remains in the house is needed and there is still a shortfall in the budget for household bills?
- Gaining extra income from additional employment may be an option for some….if opportunities are available during a time of recession when jobs may be harder to come by. However, additional costs incurred to do that job need to be taken into account: commuting costs, childcare costs, time costs for resting and re-charging if over working….
- Undoubtably all of us should be looking at ways of saving money on household bills. This approach is simply good old fashioned thriftiness…looked down on by many during the times of easy and cheap credit as the short term solution to household budget shortfalls. Now, as we experience the financial pinch of a lack of easy credit, high interest rates and negative equity on real estate, thriftiness is going to be coming back into fashion with a vengeance. Most of us can make significant savings on a wide range of household bills.
- Clearly during these times of financial crisis and lack of cheap credit, mortgages, taxes and community charges are not going to be easily negotiated downwards.
- Choosing to have less of the luxuries of life can release a lot of money to re-direct to essential bills.
- In the coming weeks Credit Crunch Helpdesk will be looking in depth at how money can be saved on the full range of household bills. Undoubtably as many companies start to feel the pinch of the looming recession there will be a lot of good deals out there to be had as they try to keep your custom. This gives you stronger bargaining power instead of having to tolerate rising prices.
“So what household bills could I save money on?”
Please feel free to comment on the areas of household spending that you need most help with and we will aim to bring you the best advice to reduce these costs.
Enjoying the Good Things in Life on a Budget
September 17, 2008 | Leave a Comment
The word “budgeting” is one that makes many a heart sink. It smacks of being frugal, going without the things we enjoy, possibly even missing out completely….!
It doesn’t have to be that way though. Undoubtably the rogue bill that comes in for the car or the sudden hike up in interest rates, fuel bills, food prices etc can cause a blip in household finances. However, it is still possible to enjoy the good things in life without having to completely surrender them in order to pay the bills.
“Okay, so how do I do it?”
Today’s tip suggests that you write down everything that you spend money on over the month from household bills, loans and mortgages through to the takeaway coffee grabbed on the way to the office.
That $2 dollar coffee on the way to work each day could be costing you $520 per annum. Just cutting back on that treat for 2 days a week could save money ($208 per annum).
Taking your own sandwiches and a piece of fruit to work at an approximate average daily cost of $2.32 instead of an average cost of $4.47 per day will save a total of $559 per annum.
That DVD or CD habit can really mount up….a lot of them collecting dust on the shelf and rarely being watched or listened to again. At an average cost of $14.99, choosing to buy second hand at an average price of $5.99 (if you really must own it) or renting instead at an average price of $16.99 for an unlimited rental monthly contract scheme, can give you wider options saving between $155 and $216 per annum.
Just think what you could spend just these 3 savings on alone!
Don’t even get me started on how much cutting back on a chocolate habit can save in a year! You get the picture of how it’s done……
At the end of the day, everything that we choose to spend money on is a choice….especially after basic household bills have been covered.
Tell us what you think are the best money savers in your budget and how you go about doing it. There’s a whole wealth of experience out there during the credit crunch that we can all benefit from.
