Archive for October, 2009:

Finishing a Basement on a Budget – part 1

Written on October 29th, 2009 by Jamesno shouts

This is off the beating path of personal finance, but since it’s an area that many folks consider so I figured we would share it!

We have recently begun the process of finishing our basement.  Hope has been after me for 5 years to finish out the extra space.  I of course have procrastinated, not wanting to fork over the cash needed to build it out.  All I have done was to actually complain silently about why I didn’t at least have the builder rough it in prior to closing on the house.

Well it seems that it is time.  Realistically, I can come up with a million reasons why I should not be spending extra cash to do this but I would probably come up with the same excuses 5 years from now.    So over the next few months I will be notating some of the ways I am going to do this on a budget.  For fair disclosure we do have some experience with sweat equity having renovated 2 homes in midtown Atlanta prior to moving out to the suburbs.  It’s been awhile but I think I can still do some of the labor involved.  The first part is acting as my own general contractor.  Nothing against GC’s, but as a lifelong DIYer I like to get involved in these things.  It’s not for everyone and if you don’t have the time or inclination to manage a project like this then it is worthwhile to higher someone to do it turnkey.

The hardest part to getting started was cleaning out all of the items that have been stored down there for 5 years.  In all honesty that was the biggest hurdle.  What to do with all of this stuff we couldn’t part with for so many years.  Well over the weekend we parted with a good bit of it to a local non-profit.  If we haven’t looked at it in 5 years, it wasn’t needed.

I had the HVAC guys come in Monday to add a system.  It turns out our main level HVAC system was oversized and could accomodate the square footage of the basement.  So instead of a $4500 for a separate system we elected to go with new ductwork and a motorized zone damper system for $2500.  For basements many times it’s not the temperature but airflow that is an issue.  I definitely needed the air to circulate to eliminate any musty smell that is common in basements.  I will have to give kudos to Neese-Jones HVAC for suggesting the damper system.  Anytime I can start a project and save $2k, then I am happy.

Next up is some carpentry work to frame out around the ductwork and to frame out a closet in what will be the guestroom.  I have enlisted the help of  a local carpenter and will let you know how it goes in the next update.

Filed under Budgeting, General Tags:

An upside to the recession, for golfers

Written on October 21st, 2009 by Jamesno shouts

Like most of the country, here in metro Atlanta we have seen golf course communities pop up everywhere.  With many of those communities the developers spent lots of cash on the golf course to attract the homebuilders/residents.  Well like everything else in realestate they are now feeling the pinch as we now have a great deal of finished golf courses in developments with just a few homes.  So to keep the lights on at the courses they are offering deals for golfers, both with non-member greens fees and with full golf memberships.

Even prestigeous country clubs are not immune to the slowdown.  I have seen membership rates for some of Atlanta’s finest cut by 1/2 or more.  So if you are a golfer in search of new courses to play or join, start your search!  There are deals to be had, if it is your thing.

In case you were wondering, I am to a bit to frugal to pony up the cash to join one of these clubs.  Although, if the rates keep dropping and the wife suddenly becomes interested in a country club, then maybe……….

Filed under Budgeting, Miser Tip Tags:,

The “B” word

Written on October 21st, 2009 by Hopeno shouts

My husband is the primary bread-winner in the family. I have a small photography business that makes a little extra money here and there, but overall, it is more of a creative outlet for me than a regular income. My primary job is taking care of the kids, house, husband, pets….family. And we all know that that doesn’t pay well. So, when my husband brought up the “b” word (budget) several months ago, I got a little nervous. It seems that my spending habits overall are not that bad. I don’t drive a luxury car, in fact, I don’t even have a car payment. We don’t take extravagant vacations or go out to dinner every night. I’m pretty good at cutting costs when I can  like using coupons at the grocery store. However, I do have a weakness, that I know many women have…CLOTHES…and SHOES!  So, after looking at what I was spending each month on clothing (which was kind of scary and embarrassing), my husband tried to put me on a budget. To me, a budget is a lot like being on a diet. The more I feel restricted, the more I want the thing that I can’t have. So after a couple of “good” months,  I fell off the budget wagon. Sorry, James! In an attempt to get back in good graces, I recently took several things back to the store that I decided I could live without.  And starting today, I am back on budget. I am making a honest attempt to not buy any clothes or shoes for anyone in the family for at least a month! Wow…that’s huge, but I think I can do it. I will let you all know how it’s going! Wish me luck…I’m going to need it.

Filed under Personal Finance Tags:

The Power of Compounding Interest

Written on October 16th, 2009 by Jamesno shouts

Reading through some financial publications I once again came upon a discussion of compounding interest.  Most folks have seen and heard this stuff many times, but it can’t be reiterated enough.  Especially if you are trying to explain to kids / teens / young adults to think about long term financial security.  I know – it sounds boring.  I can immediately see younger folks tuning out when I talk about this.  But the chart doesn’t lie and the numbers are amazing.  I just wish I had done this in my 20′s.  Like many folks I was more concerned with other things to think real hard about it. 

Below is a chart that I just did that compares 2 folks:  one saves $2000 a year beginning at 22 for 10 years.  The other waits 10 years and saves the same amount but all the way until retirement.  They both earn 8% annually.  Looks like the early saver wins again.

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Clean out your closet, donate to charity, and make a few extra bucks

Written on October 13th, 2009 by Hope2 shouts

This week, I cleaned out two of my closets (the coat closet and a spare closet where I keep out of season items).  I actually like cleaning out my closets. It’s a bit freeing to get rid of things that are taking up precious space. So, I did my own version of “Clean Sweep” and made my piles of “donate”, “sell” and “trash”.  I didn’t have any trash this go around, but I did find several things to donate and 13 items to sell.  Two or three times a year, I will sell used clothing. I partake in a local church’s consignment sale where I sell the kids clothing that doesn’t fit anymore. Whatever doesn’t sell goes to charity. What does sell, I get 70% of the selling price and the church gets 30%- win -win. This go around however, I had some women’s coats and dresses that I put up for auction on E-bay. With 13 items, my minimum total selling profits come to $368. Now, I doubt everything will sell, but even if I only sell half, I have accomplished three things; the closets got cleaned, I donated to charity, and I made a little extra cash. Not bad for a couple hours work!

Filed under Budgeting, Personal Finance Tags:

When a Miser is happy to open the wallet!

Written on October 12th, 2009 by Jamesno shouts

Okay, so I am self proclaimed Miser.  Not really but Hope (the wife) tends to think so.  I would call myself more of a frugal person than a Miser, but it just didn’t make for as good of a Website name.

The point is  that being frugal is much different than being cheap.  Personally, I am happy to contribute to a good cause as I think that brings out the best in people.  And yes I did open the wallet over the weekend, but you know what?  It felt good!  With all that is happening in the economy today there are a million reasons for folks to watch their spending and and be frugal when it counts.  But when a neighbor is in need then it is time to step up to the plate. 

We had a great benefit event in our community over the weekend.  Several neighbors planned a Run and Silent Auction to raise funds for a neighbor whose child is undergoing some major medical procedures.  It was an incredibly inspiring event as the turnout was probably 3 or 4 times the number expected.  It felt good as everyone forgot about themselves for a day and came out to support one of our own.   

So whether you volunteer your time or contribute financially, sometimes it’s okay NOT to be a Miser! 

Links:

http://www.active.com/donate/lilyanderson

http://supportkingdomkids.com/

Filed under General, Miser Tip Tags:,

Coupons, Coupons, and More Coupons!

Written on October 9th, 2009 by Hopeno shouts

I always scratch my head when people say they don’t cut coupons! Aren’t you reading the Sunday paper anyway? If you aren’t, you should be. It takes all of five minutes to go through the coupon section and cut them out! Then pick your grocery store and go through the circular. I usually go to Publix. They will double all your coupons up to .50, meaning a .50 coupon will actually save you $1.00. Also, Publix offers one mystery item a week for 1 penny (with coupon). Sometimes, it’s bottled water, paper towels, even a frozen pizza! When you go through the circular, circle the items that are on sale that you would normally buy anyway, then go through your coupons and try to find ones that match up…and BAM! you have just doubled your savings! There are also online websites that offer free coupons, like www.shortcutsavings.com. This week, they have a .50 coupon for Pilsbury refrigerated cookie dough (among other things). Publix often has a buy one get one free ad on these, so when you put thos together, you are getting a $2.50 package of cookie dough for about a dollar!

If you really want to add up your savings, you can go through all the circulars and coupons and then go to several different stores to get the best deals. I am not willing to spend the extra time & gas to do this, but I’ve seen people pay $40 for a HUGE amount of groceries doing this! So, please use your coupons when you can. It’s like throwing away cash, when you don’t cut them out of the paper…and I know you wouldn’t do that?

What’s up with Gold?

Written on October 8th, 2009 by Jamesone shout

The investing world is all abuzz about what is happening with Gold.  This week Gold is up about 5% taking out the all important $1000 level.  I really thought $1000 would be a cap at least for awhile.  Why is that you may ask?  Well anytime something is talked about so much you have to wonder if we are nearing a top.  Remember everyone talking tech stocks in 1999?  Remember TV shows about how to flip houses just two years ago?  Well, all I see and hear now is ads about buying gold.  Buy gold for investment, sell gold at your neighbors Gold party.  Fundamentally, I can see folks flocking to it as a safe haven but it still makes me a bit nervous.

So what caused the ramp this week?  Several countries got together and discussed abandoning the dollar as the standard for oil transactions (many years out), this caused a drop in the dollar and a ramp up in commodities including Gold.  Right now it seems Gold is moving on fears of the US debt and weak dollar more than the typical inflation fear. 

How far could Gold go?  It could go sky high as we have seen with oil last year, when momentum starts carrying a sector it tends to run even if the fundamentals don’t support it.  However, realistically the dollar will bounce as it is nearing technical support and Gold will pull back.  At least that is what I am waiting for.  Then if it holds up maybe it will be time to jump in.

Of course I could be completely wrong and the dollar could continue its slide and Gold could keep pushing on up to $1500 an ounce.  It’s a chance you take.

Filed under Investing Tags:,

Another Credit Card?

Written on October 7th, 2009 by Hope2 shouts

I got a new credit card today. These are not words that I would normally utter out loud. In fact, I would usually try to hide this fact from my husband. Then for the next few weeks, I’d be trying to intercept the mail so that I could get the card and the bill, before my husband saw it. However, in certain cases, I do believe that credit cards are beneficial, and today I thought this was a smart decision. I present my case. I went into the Gap looking for a pair of “long and lean” jeans. I had seen an ad for them and thought they looked good. Granted, I have over 20 pair of jeans…and I do not NEED any more jeans, but they are a weakness of mine…and nine times out of ten, I am wearing jeans. So, I found two pair that I wanted to buy. The first was a pair of skinny jeans…trendy, but adorable. The second were called “stiletto” jeans that are supposed to be longer so you can wear them with heels. They had perfectly placed pockets that kind of lifted my butt up a little, and made it look perky…and I mean who could resist that? So, I went to check out with my two pair of jeans at $69.50 each (which is really a bargain considering Hudson jeans are $200 a pair.) So, my total, with tax, was $148.73. The sales associate informed me that if I opened up a Gap card, I would save 15%…a savings of $22. Well, usually, I ignore this plea to get me to open up another credit card, but as she went on, it made good financial sense. Gap owns Gap, Gap Kids, Banana Republic, Old Navy and Piperlime. Granted, I don’t shop at Gap that much, but I definitely shop for my kids at Gap Kids and Old Navy several times a year. I also shop occasionally at Banana Republic and Piperlime has great shoes! So, in addition to my 15 % discount today, I was handed coupons for all of the above stores…AND if I shop there the first Tuesday of the month, I get an additional 10% off all purchases. AND, I earn 5% back in reward points, which means more coupons coming my way. AND if I spend $800 or more in one calendar year (easy) I get additonal shopping sale days and free shipping on all online purchases. Combine this with sales that these places run, and I am making out like a bandit. So, I go the card and bought my son two pair of corduroy pants that were on sale, plus an additional 15% off. Now, I just have to pay off the bill of roughly $175.00 when it comes in and all is good. I think there are several factors on why to decide if you should open up a line of credit. First if all, how many cards do you have? Any more than three, and I think you can start spreading yourself too thin by putting a little debt here, a little there…it starts to add up. (known from experience)  Second, you need to use it often enough to get your rewards, but not so much that you can’t pay off the bill each month. And lastly, if it helps to improve the placement and size of your butt….you gotta go for it!

Filed under Budgeting, Credit & Spending Tags:

Applying for Life Insurance

Written on October 7th, 2009 by James2 shouts

No offense to insurance agents or dentists, but life insurance for most folks is about as exciting as a trip to the dentist.  It’s just not one of those subjects that many folks like to talk about or think about.  However, being an investment guy I figured after the last 12 months my life span had shortened considerably, so it was time.  In August, I decided to review my life insurance coverage and applied for a new policy.   My current term policy still had 15 years remaining, but I found that for just a little more each month I could double the benefit and start all over with a brand new 20 year term policy.

If you are wondering, no I did not run a financial plan on myself to determine the amount.  I have done enough of these things that I have a fairly good idea without the help of a computer program.  A general rule of thumb that floats around out there is 10 times your gross salary.  I would say that’s a pretty good start, but think about the liabilities and cashflow needs your family would need just to confirm. 

I won’t get into the debate over term vs. permanent policies here.  If you have a question feel free to post and I will answer.  My feeling is that in the high liability years you need lot’s of coverage and term policies serve that well.  It’s relatively inexpensive and you get a lot of coverage for the premium.  Statistically the insurance company knows that most folks will never keep the policies through full term and they just get to keep the premium money.  It’s a cash cow business model.  I am 40 and more than likely I will live past 60 (barring another market meltdown).  If so the insurance company pockets a lot of cash from me.  However, just like the reason I  keep Homeowners coverage in case my home catches fire, the life insurance is there in the event my time is up early. 

So for all you out there with lot’s of liabilities (ie: family) get life ins. coverage!