Gather Little by Little

Is this President Obama’s “mission accomplished moment? We might find out this weekend. Here are some articles that I enjoyed this week:

Cruise over Green Panda Treehouse and enter a contest to win an iTouch!

College textbooks can be a really large unexpected cost. Moolanomy suggests the Best Places to Purchase Textbooks for Students. Before spending money on that brand new textbooks, take a look at this article and give yourself the opportunity to save a few hundred dollars each semester.

Late payments on a loan are not the only way to hurt your credit score. Mrs. Micah lists5 Ways to Hurt Your Credit Score Without Using Credit.

I am getting ready to open a new bank account. Squawkfox tells us how toFire your bank with the Switch Bank Accounts Checklist. Closing an old account can be a massive pain, but part of being a good customer is the willingness to walk.

Rocket Finance ranks the Top 10 Smarmy Financial Products on TV. Can you add any to the list?

Have a great weekend and remember do not just spend money, spend time with family!

Article by Stew

Photo by borman818

• Why Debit Cards Are Better Than Credit Cards Yesterday a couple of credit card related articles showed up on Get Rich Slowly. One...
• Credit cards and doctors visits I was reading over on CNN Money this weekend that a health care market research...
• Save $2,000 or more this year. Maybe. I do not normally like to steal other people's ideas, but I thought I would...
• 5 Simple ways I save money Photo by: HowdeeDoodat This is a guest post by Jaushwa who blogs about "his journey...
• Saving Money with Wachovia's Way2Save Wachovia bank recently announced a new program called Way2Save. If you watched the super bowl...

For the past 2 years, most people (including me!) have been having second thoughts before buying any goods. We didn’t want to make an unnecessary purchases and potentially run into money problems down the road. Each time I stand in front of a store and am about to buy something, I ask myself: “Do I really need it or can it just wait?”

In fact, I should also ask another question: “If I really need it, is it the right time to buy?”. Whether you are frugal or not, we all need to buy appliances if they break or look for a new computer when our children start college. In those situations, you might be surprised how great a deal can be found depending on your timing and the month of the year.

In fact, if you take the time to think about it, most stores offer rebates from time to time. But, they come out at pretty much the same time year after year. They have what we call “rebate seasons” and they are fixed in their business models. I did a few researches over the net and here’s what I found as the best months to buy specific goods:

When I look at the table, I am not really surprised about the timing of some rebates. For example, January and February are good months to buy clothes. This is quite logical as one of their biggest seasons just past (Christmas) and they are stuck with clothes that will have to disappear from the store in March to make more room for the spring and summer stuff.

Another note is travel to Europe in February. I’ve done it once and it’s not only pretty cheap but it’s easier to visit those countries as it’s not tourist season. People are less stressed and you have more time/space to visit.

Overall, I think this small list is not perfect but will help you figure when is the best time to buy a specific type of good. When you plan your purchase in advance, you will not only make a better choice, you will also save a lot of money by looking for deals!

I don’t know if you have noticed any other market trends like that?

Author: Mike.

• How much do your kids know about money? I know that many of us are still recovering from the long weekend, so my...
• Save Money At Amusement Parks 1 Timothy 4:4-5 Since everything God created is good, we should not reject any of...
• Which is better: Cash backs reward or points? This article is part of the Ask the M-Network series.   Gina submitted a question and...
• 95+ Money Saving Tips - From the readers! Last week I invited readers and bloggers alike to share (or blog) your favorite money...
• How To Get Your Finances Under Control - Step 4 Create a Budget AND Follow It! This article is step 4 of the series called How to Get Your Finances Under...

Last summer, after our house finally sold, I posted a list of our financial priorities  now that we no longer had to deal with the financial obligation of owning a home. I kind of forgot about that post and when I ran across it recently, I was pleasantly surprised to see that we had made progress in most of the priorities that I listed back in July. Eight months have passed since the closing of our home and while we are not rolling in the dough, we have turned a corner of sorts.

Priority #1: 0% APR Balance Transfer

Balance transfer money is in reality, a credit card cash advance, but there are various ways to access the money as a balance transfer. The key point is that cash advances have very unfavorable terms (fees, interest) while balance transfers often come with favorable terms. Our balance transfers usually came from new credit card applications – 0% introductory rates and low fees. As long as you stay current with payments and completely pay off the balance before interest starts to accrue, the net effect is a really low cost loan. In 2006 and 2007, the Stew family had almost $100,000 in balance transfer money. You should have seen those spreadsheets . . . Anyway, balance transfers came in handy when we were trying to stay current on our mortgage while renting in another state. When we finally sold the house, we still had about $15,000 in balance transfer money remaining. Our first priority was to pay off this money as soon as possible. As of March, we only have $2,500 worth of balance transfer money remaining and that is interest free until the end of the year. I hope to have all of it gone by then.

Priority #2: Emergency Fund

We are working on this one. My goal is to have three months income saved before starting to contribute to retirement. We have about one month’s budget saved right now – not great, but better than where we were.

Priority #3: Retirement

My goal was for Mrs. Stew and I to max out our employee matching opportunities at work. Mrs. Stew ended up not taking the job and we are tighter financially than we expected to be this school year. I am still not contributing to retirement on a regular basis.

Priority #4: Debt Reduction

I actually kind of pushed this one up a notch and looking back, maybe debt reduction should have been Priority #3 instead of #4. We are paying extra toward the principle on our car loan every month. Some would say that retirement is the higher priority, but I am really motivated to get our car paid off before it is no longer useful. Debt still occupies a great deal of our budget every month. The sooner that we no longer have to make those payments, the sooner we can start saving in earnest for retirement, or – since I plan to work the rest of my life – for a rainy day.

Article by Stew

Photo by Maenie

• What's In Your RSS Reader? Over in the MBN forums, GettingGreen posted a thread asking all of the personal finance...
• Congratulations! You just sold your house, now what? We're going to Disneyland! Okay, not quite, but the prospect of facing the next month...
• Figure the interest Johnny Carson once said, "Scientists have discovered a powerful new weapon that leaves buildings standing,...
• Investing Baby Steps #1: Know Who You Are When we were just babies, we started to crawl in order to explore the “new...
• Money Saving Monday Tip#5 - Use Digital Phone Service I am surprised by the number of people that still use standard phone service. Digital...

I have received several comments with regards to my previous posts about giving an allowance to my children. I presume this is a very touchy topic since it links to 2 major things in our lives: money and our children. While we want the best for our children, we also want to use our money wisely and teach them to do the same. What is the best way of teaching money management to your kids? I have no clue! However, I still have more thoughts on allowance for children:

#1 Never use the allowance to punish your kids

I don’t think that using the “you won’t get your allowance if you don’t behave” would be a proper way to do it. If you want to give money to your kids, establish simple rules leaning towards recognition instead of using money to punish them. It has been proven that encouraging good behaviours is a better way of teaching than by threatening. However, I don’t think you should be giving money away for everything either!

#2 Do not cover for them

If you set a specific amount as an allowance, this should always be it. If the purpose was to give your children the sense of responsibility towards money, you must not cover for them if they are missing a few bucks to buy the video game of their dreams. Who would give me additional money to buy a BMW? Nobody… this is why I don’t drive one!

#3 Make allowance realize your kids’ dreams

All right, your son won’t be able to gather enough money from his allowance to go to Disney World. However, I think it is a great thing to show him how quickly he could gather a few bucks and have a great time buying toys at the dollar store. I am not in favour of seeing my kid spending all his money on frivolous toys, but he also needs to reward himself once in a while. If not, saving money will feel like the biggest chore of all

#4 Promote values such as generosity, responsibility and independence with his allowance

If you want to show your kids that giving is a good thing in life, start with his allowance. I have noticed that many of you are telling their children to either put money aside or give it to charity. And you know what? I think it is a marvellous idea! I really see money as an amplifier. Just as you can do really bad things with money, you can also use it to achieve great things. Giving to charity is one of them.

Chores or not to chores?

After all the comments regarding the incremental value of being part of the family and to not get paid for doing chores (as it is part of what family members do), I am still divided. While I want to make sure my children understand that they won’t be paid for every single little thing, I also want to show them that money doesn’t grow on trees.

I remember when I was 8, I actually tried to charge my parents because I shovelled a bit of snow around our door. My father looked at me:

“You seriously want to get paid for this?” he asked me with a stern look.

“Of course! It was not part of my chores and I did it anyways. This means I should get more money” I replied filled with confidence and pride (I considered myself quite industrious at that time to charge for extra chores!).

“All right, here’s a quarter” he flipped it towards my direction and I was left with a stupid quarter for a good hour of work (or so it seemed to me back then!).

This quick money lesson was enough to show me that I might get paid to do some chores, but it was to encourage me and provide me with an allowance. It was not meant for me to become a cleaning machine to earn more money.

I guess this is the kind of lesson I want to teach my kids!

Author: Mike.

Image source: the ritters

• Teach your teen the basics of money management Photo Credit: stock.xchng This article is part of the Money Matters for All Ages group...
• Money Saving Monday Tip#20 - Keep the change Photo by: r-z This article is part of an ongoing series where I write about...
• Gazelle Intensity, Not For Me Thanks Timothy 4:4-5- Since everything God created is good, we should not reject any of it...
• The Friday Gathering for 12/21/2007 Photo by: My Wife I am really enjoying my vacation from my "real job". I'm...
• 3 steps to a personalized income plan for your children Photo by: wsh1266 This is a guest post by WJ, a husband, father, fellow Christian...

Last week, Mrs. Stew started a sentence with the words, “next time we buy a house . . . ” and then finished the sentence with her idea for our home at some point in the future. I responded that I did not think we were going to buy a house anytime soon, if ever. Of course, Mrs. Stew has heard the statement from me on many occasions over the past two years. I think she had been mostly dreaming out loud while making her buy-a-house plans.

Our troubles with selling our home are well documented on this site. Fortunately, home ownership did not destroy us financially, however, I do not plan to take that chance ever again even if my financial situation improves a great deal. Here are my thoughts:

• There is no indication that we will be moving in the near future, but nowadays, you never know. My profession is one that typically involves relocation about every three to five years, even though I have had the blessing of only having to move once in fifteen years. Until I am in a job with really steady prospects for the future, I am going to keep on renting.
• I generally like mowing the lawn and sometimes even shoveling snow, but if I do not have to do it, why change a good thing?
• If it was a question of mortgage payments, owning a home would make a lot of sense for us. But as those of you who own a home know, home ownership comes with all kinds of hidden costs.
• The down payment is the big issue when it comes to home ownership for us right now and even if I had the kind of cash that a down payment requires, I would be much more likely to save it. We have a ton of other financial issues that need attention.
• I am not even sure that I would enter into a mortgage for fifty or even sixty percent of the home’s value right now. If I could build my own home and truly own it without a mortgage, I might  move toward true home ownership.

For most of my lifetime, home ownership has been sold to Americans as the ideal purchase, a financial priority, the thing that every responsible person does at the earliest possible time. I certainly believed that idea. My wife and I purchased a home withing a year of getting married and thought that we were in great shape since we had bought a home about 10 years earlier than either of our parents had been able to afford one. What we failed to understand was that while we could afford a ten percent down payment and the monthly mortgage, we could not afford to own a home.

I have come to understand the real cost of home ownership quite clearly and I plan to be a contented renter for a long, long time.

Article by Stew

Photo by ugraland

• How I saved 1000's on remodeling and home maintenance and you can to! Photo by: Sean F From Glblguy: This is a guest post by my dad who...
• Are you as leveraged as Goldman Sachs? For decades, many of us have been putting more and more of our money into...
• Ask the M-Network - Questions from college and on housing This article is part of the Ask the M-Network series.  Over the past few weeks...
• Common new home buyer mistakes I was talking with a co-worker recently who was preparing to purchase his first home. ...
• The Friday gathering - The joys of home ownership I love owning a home and in general enjoy the challenges of repairing my own...